U.S. Defense Department officials are considering ending the JEDI cloud computing contract, the Wall Street Journal reported today.
The JEDI, or Joint Enterprise Defense Infrastructure, contract is set to see the Pentagon spend as much as $10 billion over 10 years on cloud infrastructure and services. The Pentagon awarded the deal to Microsoft Corp. in 2019.
The decision to choose Microsoft for the project came as a surprise because Amazon Web Services Inc., the largest player in the public cloud market by revenue, was widely expected to win JEDI. Microsoft’s contract win, which AWS says was influenced by political interference from former President Donald Trump, has been the subject of litigation ever since.
Today’s report that the Defense Department has floated the idea of scrapping the contract comes a few months after the Pentagon officially hinted at that possibility. In a report to Congress dated Jan. 28, officials wrote that the ongoing litigation over JEDI could become an issue if it were to turn into a prolonged legal battle. “The prospect of such a lengthy litigation process might bring the future of the JEDI Cloud procurement into question,” the officials wrote.
The Pentagon’s report was sent to legislators shortly before the Defense Department and Microsoft lost a motion to dismiss AWS’ legal challenge to the JEDI contract award decision. The news that the case was being allowed to continue emerged on April 28. Two days later, on April 30, Deputy Defense Secretary Kathleen Hicks stated during a security conference that “we’re going to have to assess where we are with regard to the ongoing litigation around JEDI and determine what the best path forward is for the department.”
The ongoing litigation is not the sole reason why the idea of scrapping JEDI has been floated. According to today’s report, multiple lawmakers and government contracting experts argue that the deal should be canceled because it awards the entire $10 billion project to a single provider. The Pentagon’s single-provider approach contrasts with the growing trend in the enterprise of splitting cloud spending across multiple platforms, which allows companies to mix and match the best capabilities from each.
AWS declined to comment for the Journal story. Microsoft told the publication that “we agree with the U.S. [government] that prolonged litigation is harmful and has delayed getting this technology to our military service members who need it.” The company added that “we stand ready to support the Defense Department to deliver on JEDI and other mission critical DoD projects.”
Defense Department officials are “reviewing other options to move forward” with JEDI, according to today’s report, which hints that scrapping the contract is only one of several possibilities being considered. The report didn’t specify what other options may be on the table.
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