DOD awards $10B JEDI deal to Microsoft

Long-awaited enterprise cloud contract comes days after Defense Secretary Esper recused himself from the process.

DOD cloud
 

The force is strong with Microsoft.

The Redmond, Wash.-based computing giant won the heavily contested Joint Enterprise Defense Infrastructure contract to supply cloud computing services to the Department of Defense, with a focus on mission-based warfighting operations.

The $10 billion ceiling contract spans a maximum 10 years if all options are exercised.

"The National Defense Strategy dictates that we must improve the speed and effectiveness with which we develop and deploy modernized technical capabilities to our women and men in uniform," DOD CIO Dana Deasy said. "The DOD Digital Modernization Strategy was created to support this imperative. This award is an important step in execution of the Digital Modernization Strategy."

The move positions Microsoft as the cloud provider of choice for the Pentagon for years to come, covering infrastructure and platform services. Additionally, the Department of Defense recently awarded its business software contract DEOS (Defense Enterprise Office Solutions) to a Microsoft integrator. While that contract is currently under protest, whoever wins will be delivering Microsoft 365 email and applications to the DOD.

The award was announced late in the day on Oct. 25.

Like its cinematic namesake, the JEDI contracting saga was full of twists and turns, eventually garnering some comment from President Donald Trump and necessitating a review at the defense secretary level. In recent days, Secretary Mark Esper recused himself from the review because his son Luke worked for IBM, a JEDI bidder, although he had no connection with that procurement and joined the company before Esper was elevated to his current position.

Amazon Web Services was widely considered the frontrunner in the acquisition, and even joined the Department of Defense to defend a lawsuit from a vendor that didn't make the cut that alleged AWS had a hand in designing the JEDI procurement.

"We're surprised about this conclusion," an AWS spokesperson said in a statement. "AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion. We remain deeply committed to continuing to innovate for the new digital battlefield where security, efficiency, resiliency, and scalability of resources can be the difference between success and failure."

One cloud to rule them all

The idea of a single, general-purpose cloud was first floated by DOD's acquisition chief Ellen Lord in Dec. 2017 at the Reagan Defense Forum.

"We are, no kidding, right now writing the contract to get everything moved to one cloud to begin with and then go from there," Lord said.

A Cloud Executive Steering Group, created first outside the CIO organization and later changed to include the Pentagon's top tech officer, began to develop the idea of a single big cloud project. While defense officials were quick to point out that the DOD had many ongoing cloud projects of different natures, the new project was clearly intended as something special – a way to share data, analytics and communications in combat and challenging forward environments to facilitate the two way sharing of information and to deliver DOD intelligence anywhere, anytime.

That proposal, as developed by Defense Digital Services chief Chris Lynch – a notorious Star Wars fan – morphed eventually into JEDI.

JEDI was controversial from the word go, with many technology experts in and around government raising concerns that a single cloud was risky for a variety of reasons.

However, the procurement proceeded with Amazon Web Services, Microsoft, IBM and Oracle submitting bids. Oracle and IBM were excluded for not meeting base requirements, leading to a lawsuit from Oracle alleging that Lynch and some defense officials with AWS ties cooked up the requirements to favor Amazon's bid. That lawsuit led to the revelations that in fact some individuals did have potential organizational conflicts of interest however a judge, a DOD review and an inspector general review agreed that the solicitation was not tainted by internal ties to outside vendors.

"Prior to the award, the department conferred with the DOD Inspector General, which informed the decision to proceed," the DOD said in a press statement.

'Tremendous complaints'

Even President Donald Trump got into the act. No fan of Amazon founder and Washington Post owner Jeff Bezos, Trump sounded off about about the controversial cloud buy in July in an Oval Office photo opportunity alongside the prime minister of the Netherlands.

"So, I’m getting tremendous complaints about the contract with the Pentagon and with Amazon. They’re saying it wasn’t competitively bid," Trump said, when asked by a reporter about the contract. "And I will be asking them to look at it very closely to see what’s going on because I have had very few things where there’s been such complaining. Not only complaining from the media -- or at least asking questions about it from the media -- but complaining from different companies like Microsoft and Oracle and IBM. Great companies are complaining about it. So we’re going to take a look at it. We’ll take a very strong look at it."

That look took the form of a review by newly installed Defense Secretary Mark Esper -- which was ongoing from late July to just this week when Esper announced his recusal.

Once Trump weighed in, some on Capitol Hill, including Sen. Jack Reed (D-R.I.) the ranking member on the Armed Services Committee, and Sen. Mark Warner (D-Va.), the vice chairman of the Select Committee on Intelligence, went public with their concerns that political forces were having an impact on the acquisition.

We appreciate your desire to review this initiative as you take on your new role as Secretary, but we urge you to resist political pressures that might negatively affect the implementation of sound acquisition practices and of the cloud strategy," the lawmakers wrote.

Through all the storm around one of the biggest single information technology procurements in goverment history, military officers have held tight to the position that JEDI -- or something very much like it -- is needed to drive data analtyics and artificial intelligence capabilities to the edge, where they can be used in combat and strategic settings.

In a court filing in the Oracle lawsuit, Lt. Gen. Bradford Shwedo, the CIO for the Joint Chiefs of Staff, attested to the "urgency and importance" of the JEDI cloud acquisition.

"JEDI Cloud is critical to safeguarding our technological advantage against those that seek to harm our nation," Shwedo said.

Rep. Jim Langevin (D-R.I.), the chairman of the House Armed Services Subcommittee on Intelligence, Emerging Threats and Capabilities praised DOD's move.

“Advanced general-purpose cloud is the industry norm, and it's past time the Department of Defense had access to these capabilities. I congratulate DOD CIO Dana Deasy for seeing the JEDI award through. I look forward to continuing to use my position in Congress to increase access to next generation technologies that support our warfighters.”

FCW Staff Writer Lauren C. Williams contributed to this report. 

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