The Pentagon to Award a $10 Billion JEDI Cloud Contract to a Single Provider

The U.S. Defense Department has decided to award a single contractor with its upcoming Joint Enterprise Defense Infrastructure (JEDI) venture, which will involve integrating substantial amounts of the Defense Departments data to a third party operated cloud system making up about 16% of the DoD’s cloud migration work. The contract will be worth a maximum of USD 10 Billion over the course of a decade. Amazon Web Services, Microsoft, IBM and Oracle are some of the few companies competing for this lucrative contract, with Amazon being considered the frontrunner. Amazon was previously awarded a USD 600 Million cloud contract with the CIA in 2013, making it the only company currently approved to manage secret and sensitive data. However, in lobbying efforts, Microsoft has stressed the abilities of its advanced AI department which would benefit next-generation military capabilities. Likewise, IBM has emphasized its previous experience in working with government computer systems.

Microsoft, IBM and Oracle had previously publicly opposed and criticized the DoD’s plan to use a single provider to manage their cloud services. IBM’s General Manager, Sam Gordy said, “Locking the Pentagon into a proprietary, sole-sourced cloud environment would eliminate the cost benefits of vendor competition and wall off the U.S. military from new cloud-based innovations in areas such as data security and advanced analytics where other providers are investing heavily.” In response to the criticisms against the hiring of a single contractor, the DoD said that multiple awards would result in a slow process that “could prevent DoD from rapidly delivering new capabilities and improved effectiveness to the warfighter that enterprise-level cloud computing can enable.” The DoD also stated that it would continue to hire other contractors for cloud services not under the JEDI contract.

After the Pentagon confirmed their plan to hire a single contractor, companies began to change their tune and started lobbying for that single award. "We look forward to submitting a thoughtful, comprehensive proposal for a JEDI cloud that will serve the long-term needs of America's men and women in uniform," Gordy said in a statement. Still, there is criticism about the contract given that Amazon is heavily considered a favorite. John Weiler, the Executive Director of the IT Acquisition Advisory Council, said that he predicts the JEDI contract award “will be protested aggressively based on a number of clear mistakes from the officials running it,” adding that “They have already demonstrated that they are not interested in full and open competition. I guarantee you this will be challenged in a court of law.”

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