Pentagon scraps $10bn JEDI winner-takes-all cloud contract

Y'know what, a single-vendor IT mega-deal probably isn't the best idea after all, says US military


Updated The Pentagon has killed off the $10bn JEDI IT contract that Amazon, Microsoft, Oracle, and others spent years fighting over.

The US government's Dept of Defense announced today the decade-long, single-vendor, winner-takes-all cloud deal would be scrapped.

"With the shifting technology environment, it has become clear that the JEDI Cloud contract, which has long been delayed, no longer meets the requirements to fill the DoD’s capability gaps," the department said in a statement to the media.

The Joint Enterprise Defense Infrastructure, or JEDI, was awarded to Microsoft in 2019, and since then Amazon and Oracle have battled tooth and nail to overturn that decision.

Meanwhile, Microsoft and Amazon will be able to bid for the US military's Joint Warfighter Cloud Capability (JWCC) project, which is described as "a multi-cloud/multi-vendor Indefinite Delivery-Indefinite Quantity (IDIQ) contract." The pair were said to be the only two suitable tech providers currently qualified for such sensitive cloud services.

“The department intends to seek proposals from a limited number of sources, namely the Microsoft Corporation (Microsoft) and Amazon Web Services (AWS), as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the Department’s requirements,” the statement continued.

Microsoft’s President of US Regulated Industries Toni Townes-Whitley said the cancellation of JEDI doesn’t reflect poorly on Redmond's cloud biz, and wasn't shy about putting the boot into the competition.

"We understand the DoD’s rationale, and we support them and every military member who needs the mission-critical 21st century technology JEDI would have provided. The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward," said Townes-Whitley.

"The 20 months since DoD selected Microsoft as its JEDI partner highlights issues that warrant the attention of policymakers: when one company can delay, for years, critical technology upgrades for those who defend our nation, the protest process needs reform. Amazon filed its protest in November 2019 and its case was expected to take at least another year to litigate and yield a decision, with potential appeals afterward."

Microsoft focused "on our customer, and not politics or litigation," she added. "We look forward to competing for and being awarded many other cloud projects by the DoD in the future."

Amazon was not immediately available for comment. We’ll update the story if we hear back.

On the face of it, this could be a candid admission by the Pentagon that JEDI wasn't such a great idea after all, particularly the part allowing one cloud vendor to take the whole cake. While that would simplify the deployment, the tech titans were never going to let that stand.

The animosity Donald Trump, the man who was US President when the deal was handed to Microsoft, openly showed toward Amazon supremo and Washington Post owner Jeff Bezos gave Amazon all the ammunition it needed in its attempts to shoot down the JEDI decision, arguing it was unfairly passed over.

Now, after years of bidding, lobbying, and litigating by IT super-corps, the Pentagon's given up on its one-provider cloud deal, and gone back to sharing out contracts with multiple players. JWCC is rather like a peace offering to Microsoft, which would have scooped JEDI, and Amazon, which might have been able to argue it had JEDI stolen from it. ®

Updated to add

"We understand and agree with the DoD’s decision. Unfortunately, the 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," an AWS spokesperson told The Register.

"Our commitment to supporting our nation’s military and ensuring that our warfighters and defense partners have access to the best technology at the best price is stronger than ever. We look forward to continuing to support the DoD’s modernization efforts and building solutions that help accomplish their critical missions."

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