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A closer look at DOD’s cloudy JEDI contract

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On July 26, the Department of Defense released the final request for proposals for the Joint Enterprise Defense Infrastructure cloud computing contract.  Darth Vader has not yet weighed in on the JEDI proposal, but Yoda would call the protracted process leading up to the RFP itself a lesson in how to do not procurement in the federal government.

The JEDI program is a multiyear effort to modernize DOD’s IT systems into a cloud services solution.  With an estimated value of $10 billion over 10 years, the winning contractor will be expected to deliver an enterprise-level commercial cloud solution, including infrastructure as a service and platform as a service, to all defense agencies and military branches.

Since early January 2018, the JEDI acquisition has followed a bumpy road.  On Feb. 7, 2018, the Army awarded a sole-source, $950 million contract to REAN Cloud, a small Amazon Web Services provider, using its other transaction agreement (OTA) authority, to assist with the department’s cloud migration.  However, this award was problematic, most notably because the request for information indicated that the contract would be given to a single migration solution from a specific vendor and that that platform appeared to be predetermined for the remaining JEDI cloud contract yet to be awarded. 

After the JEDI RFI was first released in November 2017, IT Alliance for Public Sector Senior Vice President Trey Hodgkins told DOD that its cloud should consist of “multiple interoperable offerings” to provide competition and the “best value for both the warfighter and taxpayer.”  He added that most Fortune 500 companies utilize multiple cloud solutions and that the use of a single cloud provider would leave DOD “captive” to that provider.  Using multiple providers would increase cybersecurity and functionality, decrease cost by increasing competition and allow DOD to quickly adapt new technologies for the warfighter.

Congress has provided 11 federal agencies with the authorization to utilize OTA for contracts.  These research and development agreements are an exception to the regular procurement process only when the agency’s needs cannot otherwise be met.  However, many fear the OTA process is increasingly being used to bypass the traditional procurement process.

The $950 million REAN contract, which was awarded by the Defense Innovation Unit Experimental (DIUx), was so out of the ordinary that senior DOD officials were unaware of its existence.  On March 5, the Pentagon reduced the scope of work and the contract award to $65 million.  Following a DOD presentation on the JEDI contract to the IT industry on March 7, IT Acquisition Advisory Council Executive Director John Weiler said, “The articulation of the requirement and how this thing would be delivered is specific to Amazon.  It is not a truly competitive procurement.”

On Feb. 20, Oracle filed a bid protest with the Government Accountability Office, claiming that the Army improperly used its OTA in making the award.  On May 31,  GAO sustained Oracle’s protest.

The JEDI contracting process has been murky since its inception, moving from DIUx, to DOD’s Cloud Executive Steering Group, to the Digital Defense Service to DOD CIO Dana Deasy

The RFP sets out how the JEDI contract will work.  The winning bidder will be provided an initial two-year base contract, two consecutive three-year options, and a final two-year option to complete the work.  This is supposed to provide the opportunity to ensure that the system is fully tested and meets DOD’s security and operational demands.  Because the contract will be “awarded pursuant to full and open competition,” one can expect cloud services companies like Amazon Web Services, Google, IBM, Microsoft and Oracle to bid on the contract.

The IT industry is not alone in its concerns over a single cloud provider.  When the RFP was announced, Air Force Deputy Chief of Staff for Intelligence, Surveillance, and Reconnaissance Lt. General VeraLinn “Dash” Jamieson said  she does not want the Air Force to use one cloud provider, since “multi-cloud” will give the enemy “a targeting problem.”

If the final contract is to avoid the wasteful and costly fate of past efforts to modernize IT throughout the federal government, the Pentagon must administer the contract in a fair, open and truly competitive manner.  So far, taxpayers should not be particularly confident that will be the outcome of this critical procurement.

About the Author

Tom Schatz is president of Citizens Against Government Waste.

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