Following Court Decision, Amazon and Microsoft Set to Compete Over Military’s Cloud Computing Contract

The $10 billion JEDI project has been rife with controversy, but the Pentagon still hopes to seal the deal with either company next month.

• By Haley Samsel
• Jul 15, 2019

A federal court ruling on Friday cleared the path for Amazon and Microsoft to battle for a massive contract to build the Department of Defense’s first-ever “war cloud” computing system.

Oracle, which had originally bid on the $10 billion contract, was eliminated from contention by the Pentagon after officials said only Amazon and Microsoft had the capacity to carry out the Joint Enterprise Defense Infrastructure plan, known as JEDI. The company went on to accuse the military of giving unfair preference to Amazon through arbitrary requirements for the contract and conflicts of interest involving former department employees, the Federal News Network reported.

On Friday, a judge ruled in favor of the military, arguing that its criteria for the contract was “enforceable” and dismissing Oracle’s allegations that department employees’ ties to Amazon influenced the process, according to a filing published by Federal News Network.

JEDI is meant to replace the military’s current clunky information systems with a cloud that will “empower the warfighter with data and is critical to maintaining our military’s technological advantage,” the Department of Defense wrote in a recent strategy document.

The Pentagon is expected to award the contract as soon as next month despite facing backlash from senators and cybersecurity experts about the contract process. Those same critics, which included former bidder IBM, have also complained about the military’s decision to hire a single cloud provider when large organizations usually hire multiple companies to do the job.

“This type of fiscal and time commitment should demand a procurement steeped in competition and conducted without bias toward any one vendor,” Sen. Marco Rubio (R-Florida) wrote in a July 11 letter to National Security Advisor John Bolton urging him to delay awarding the contract. “However, DoD has used arbitrary criteria and standards for bidders.”

Rubio added: “And in the end, DoD plans to award this massive contract to a single vendor, even though multiple vendors would ensure continuing price competition and access to the latest innovations.”

Rubio was not alone in his request to delay the contract. Sen. Ron Johnson (R-Wisconsin) also asked for the Pentagon to hold off due to multiple inquiries into potential ethics violations during the contract process, the Federal News Network reported.

“If the investigation [by the inspector general] confirms the allegations of impropriety after the contract has already been awarded, it could significantly erode public trust in the fairness of the government procurement process and, if appropriate, may be very difficult to unwind a project that is already underway,” Johnson wrote.

It was not immediately clear whether Oracle would appeal the decision and take the case to the U.S. Court of Appeals. If the company accepts the ruling, it’s likely the competition between Amazon and Microsoft will come to a close in August. While Amazon Web Services seemed like the clear frontrunner just a year ago, the contract “now seems just as likely to go to Microsoft,” which has been steadily improving its Azure cloud platform, the Associated Press reported.