U.S. scraps $10B JEDI cloud contract with Microsoft

Army boots
Microsoft said “we respect and accept DoD’s decision." (Getty Images)

The U.S. government terminated its 10-year, $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud contract with Microsoft after years of legal wrangling but announced plans to solicit proposals for a new work order in its stead.

John Sherman, acting Department of Defense (DoD) CIO, said in a statement the JEDI contract “was developed at a time when the Department’s needs were different and both the CSPs [cloud service providers] technology and our cloud conversancy was less mature.”

Taking into account other government technology initiatives, “the evolution of the cloud ecosystem within DoD and changes in user requirements to leverage multiple cloud environments to execute mission, our landscape has advanced and a new way-ahead is warranted to achieve dominance in both traditional and non-traditional warfighting domains,” he said.

DoD will replace JEDI with a new Joint Warfighter Cloud Capability (JWCC) procurement, which it said will be a multi-cloud, multi-vendor Indefinite Delivery-Indefinite Quantity contract. It will seek proposals from Microsoft and Amazon Web Services (AWS), stating these were the only two cloud service providers currently equipped to meet the government’s requirements.

The JEDI contract was originally awarded to Microsoft in October 2019, immediately sparking fierce protests from AWS and a drawn out court battle through which AWS sought to prevent its rival from working on the project. AWS claimed in court filings its bid for the contract was superior to Microsoft’s and blamed bias within President Donald Trump’s administration for its rival’s win.

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Toni Townes-Whitley, president of U.S. Regulated Industries at Microsoft, said in a blog “we respect and accept DoD’s decision,” noting the government “faced a difficult choice: continue with what could be a years-long litigation battle or find another path forward.”

“Even though we couldn’t work directly with the DoD on JEDI while the protest was in the courts, the investments we’ve continued to make in support of the contract requirements ensure that Microsoft will be an even stronger competitor for future contracts,” she wrote.

The executive also took a shot at AWS, calling for changes to the challenge process for government contract awards. “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,” Townes-Whitley concluded.

An AWS representative told Fierce "we understand and agree with the DoD’s decision" and reiterated the company's argument that the contract award to Microsoft "was not based on the merits of the proposals." The representative added "We look forward to continuing to support the DoD’s modernization efforts and building solutions that help accomplish their critical missions.”

 

This story has been updated to include a statement from Amazon Web Services.