The U.S. Department of Defense on Tuesday canceled its $ 10 billion JEDI cloud computing project, canceling a Trump-era award to Microsoft Corp. and announcing a new deal expected to include its big technology rival Amazon.com.
The contract awarded by the Pentagon in late 2019 was on hold after Amazon filed a lawsuit challenging the decision under then-President Donald Trump.
Trump publicly ridiculed then-Amazon CEO Jeff Bezos and repeatedly criticized the company. Shares of Microsoft and Amazon closed at a record high, as the online retailer rose 4.7%, and shares in the software company and kuna more.
Amazon said that the decision of the Pentagon in 2019 was full of “strong mistakes”, which he suggested were the result of “inappropriate pressure from Trump”. The company quoted a book from 2019 in which it is stated that Trump instructed the Ministry of Defense to “remove Amazon” https://reut.rs/2V4LqgQ from the JEDI contract.
Recently in September, the Department of Defense re-evaluated the contract proposals and said Microsoft’s submission was the best.
According to the new Biden administration, the Pentagon said Amazon and Microsoft are the only companies that can meet the department’s requirements, but later noted that they would contact other cloud vendors in the next three months if they also met government standards.
Other leading cloud companies include Oracle Corp., Google Alphabet Inc. and IBM Corp.
The Pentagon hopes to receive the first awards by April 2022 for its new Joint Cloud Warfare Capability (JWCC).
John Sherman, acting director of information at the Department of Defense, said he expects both Microsoft and Amazon to get cloud contracts. He said the need was urgent.
“I need to get this now – as soon as possible – starting, I hope, as early as April,” Sherman said.
Microsoft said in a statement that the company is confident it will “continue to be successful as the Department of Defense selects partners for the new deal.” Microsoft could file a termination fee to reimburse the costs of the canceled project, Sherman said.
Amazon’s cloud unit Amazon Web Services (AWS) said it agreed with the Pentagon’s decision to cancel the contract. Amazon said the initial award “is not based on the merits of the proposal, but is the result of an external influence that has no place in government procurement.” AWS added that it looks forward to “continuing to support efforts to modernize DoD and build solutions that help accomplish their critical missions.”
In April, a judge refused to dismiss Amazon’s claims, saying the Trump administration interfered in the Pentagon’s award to Microsoft after putting it on hold indefinitely in February 2020.
The now-canceled Joint Infrastructure Cloud Infrastructure (JEDI) agreement was planned for as much as $ 10 billion and was part of a broader digital modernization of the Pentagon aimed at making it more technologically agile.
“We don’t have an estimate yet, but I wouldn’t stick to the $ 10 billion figure,” Sherman said.
“This plan includes multi-cloud procurement through full and open bidding, perhaps as early as 2025. However, we are confident that a direct allocation path is absolutely needed and appropriate in the near future that will allow us to urgently need cloud capabilities enterprise,” he said. Sherman.
Republican Sen. Chuck Grassley praised the Pentagon’s decision. “The JEDI contract is fraught with potential conflicts of interest, size, unnecessary delays and its unique winning structure,” Grassley said, saying the new review process … will give the program an opportunity for greater public confidence.
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