The Pentagon on Tuesday said that it has scrapped a US$10 billion cloud computing contract, sidestepping a bitter dispute between Amazon.com Inc and Microsoft Corp over allegations of political bias that swayed the bidding.
A US Department of Defense statement said that the Joint Enterprise Defense Infrastructure (JEDI) contract was canceled because it no longer meets current needs and that it would start a process for a new “multi-cloud / multi-vendor” computing contract.
Microsoft in late 2019 won the contract, sparking a challenge by Amazon on the grounds that vengeful politics by then-US president Donald Trump might have improperly influenced the outcome.
Photo: AP
Officials said that instead of going forward with the deal in the face of litigation, the government would start over with the aim of getting the most up-to-date technology.
“JEDI, conceived with noble intent, was developed at a time when the department’s needs were different,” department spokesman John Sherman said at a news conference. “Now, we want to leverage multiple cloud environments.”
Sherman equated arming US “war fighters” with cutting-edge, 21st-century cloud computing capabilities to providing top armor or weaponry, saying the technology landscape has shifted since the JEDI contract was stalled by litigation.
A statement said that the Pentagon would seek proposals from Amazon and Microsoft on a new contract, adding that the two companies appear to be the only cloud service providers capable of meeting the department’s requirements.
The 10-year JEDI program was designed to see all military branches sharing information in a cloud-based system boosted by artificial intelligence.
Amazon alleged it was shut out of the deal because of what it called Trump’s vendetta against the company and its former chief executive Jeff Bezos.
Sherman said that it was urgent to move ahead and that “the overriding factor is not what may have happened in previous administrations; what was said or not said, the litigation.”
Amazon had been considered the lead contender to provide technology for JEDI, with Amazon Web Services dominating the cloud computing arena and the company already providing classified servers for other government agencies, including the CIA.
Amazon argued in court documents that the Pentagon’s choice of Microsoft was mystifying if not for Trump’s repeated “expressed determination to, in the words of the president himself, ‘screw Amazon.’”
US officials are to reach out to Amazon and Microsoft to solicit bids for parts of the new cloud contract, which Sherman said would have an overall value in the billions of dollars, without specifying an amount.
“We understand and agree with the ... decision,” Amazon said. “Unfortunately, the [JEDI] contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement.”
Microsoft president of US regulated industries Toni Townes-Whitley said in an online post that the company “respects and accepts” the decision.
“The [department] faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward,” Townes-Whitley wrote. “What matters now is the way forward.”
Defense officials also plan to reach out to Google, Oracle Corp, IBM Corp and other computing firms to assess whether they would be willing to enter the bidding for some of the jobs.
The department aims to begin awarding contracts early next year, with a hope of having systems starting to deploy by 2025.
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