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Amazon And Microsoft To Face Off For Pentagon Cloud Contract

The rift over Project Nimbus underscores the high-stakes battle between juggernaut tech companies for lucrative contracts to provide governments with cloud and artificial intelligence in the midst of tough questions about how that technology gets used.

Amazon and Microsoft to face off for Pentagon cloud contract

Microsoft in late 2019 won the contract, sparking a challenge by Amazon on grounds that vengeful politics by former president Donald Trump may have improperly influenced the outcome. Officials said that instead of going forward with the deal in the face of litigation, the government would start over with the aim of getting the most up-to-date technology.

The Pentagon scrapped a $10 billion cloud-computing contract awarded in 2019 to Microsoft Corp. after several years of wrangling between the government and some of the biggest U.S. tech companies over the deal, indicating it plans to divide the work between Microsoft and rival Inc. instead.

Once the contracts are formally in place, the Pentagon expects to start using JWCC to deliver unclassified cloud services 30 days after the awards, secret-level services after 60 days, and top-secret services after 180 days.

The three-year delay and eventual cancellation of the JEDI program has meant that each of the military departments have now created their own contractual mechanisms to buy and manage cloud services. The Air Force built a program called Cloud One, along with a cloud-conscious DevSecOps software development environment called Platform One.

The Army, meanwhile, stood up its own Enterprise Cloud Management Agency to manage its contracts with cloud service providers, and the Navy has done much the same by consolidating its cloud activities within a new Cloud Service Management Organization.

Meanwhile, Microsoft and Amazon will be able to bid for the US military's Joint Warfighter Cloud Capability (JWCC) project, which is described as "a multi-cloud/multi-vendor Indefinite Delivery-Indefinite Quantity (IDIQ) contract." The pair were said to be the only two suitable tech providers currently qualified for such sensitive cloud services.

On the face of it, this could be a candid admission by the Pentagon that JEDI wasn't such a great idea after all, particularly the part allowing one cloud vendor to take the whole cake. While that would simplify the deployment, the tech titans were never going to let that stand.

Now, after years of bidding, lobbying, and litigating by IT super-corps, the Pentagon's given up on its one-provider cloud deal, and gone back to sharing out contracts with multiple players. JWCC is rather like a peace offering to Microsoft, which would have scooped JEDI, and Amazon, which might have been able to argue it had JEDI stolen from it.

The Department of Defense announces the awarding of the Joint Warfighting Cloud Capability (JWCC) contracts to Amazon Web Services Inc. (AWS), Google Support Services LLC, Microsoft Corporation, and Oracle. JWCC is a multiple-award contract vehicle that will provide the DoD the opportunity to acquire commercial cloud capabilities and services directly from the commercial Cloud Service Providers (CSPs) at the speed of mission, at all classification levels, from headquarters to the tactical edge. This Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract vehicle offers commercial pricing, or better, and streamlined provisioning of cloud services. With JWCC, warfighters will now have the opportunity to acquire the following capabilities under one contract:

The Pentagon said Tuesday it scrapped a massive $10 billion cloud computing contract, sidestepping a bitter dispute between Amazon and Microsoft over allegations of political bias that swayed the bidding.

A Defense Department statement said the Joint Enterprise Defense Infrastructure (JEDI) contract was canceled because it no longer meets current needs and that it would start a process for a new "multi-cloud/multi-vendor" computing contract.

Sherman equated arming US "war fighters" with cutting-edge, 21st-century cloud computing capabilities to providing top armour or weaponry, saying the technology landscape has shifted since the JEDI contract was stalled by litigation.

A statement said the Pentagon would seek proposals from Amazon and Microsoft on a new contract, noting that the two vendors appear at the moment to be the only cloud service providers capable of meeting the department's requirements.

US defence officials will reach out to Amazon and Microsoft to solicit bids for parts of the new cloud contract, which Sherman said will have an overall value in the billions, without specifying an amount.

Pentagon planners had to know Amazon was never going quietly when they awarded the JEDI cloud contract to Microsoft. After 20 months of legal feuding, political arm-twisting and PR narrative-setting, AWS prevailed as the U.S. DoD mothballed JEDI in favor of a trendy new multi-cloud strategy. It's a testament to the Pentagon's lumbering bureaucracy more than the blistering pace of cloud technology that "the JEDI Cloud contract no longer meets its needs," however, it rationalizes the decision by citing an alphabet soup of defense initiatives, writing:

The DoD has outlined its requirements in a "pre-solicitation notice" with the gory details coming later in a full RFP. It includes features expected of any large cloud service provider like highly available and resilient infrastructure and services, global reach, centralized management system, rapidly deployed and scalable resources and ease of use. It adds several elements that could differentiate contract winners from losers, namely:

A charitable interpretation of the Pentagon's JEDI decision takes it at face value as a legitimate attempt to improve the DoD's cloud capabilities, flexibility and cost-efficiency. However, we're talking about the Pentagon here; an organization known for cost overruns, budget gimmicks and backroom dealing. A more cynical, but realistic explanation is to facilitate the twin procurement strategies known in defense analyst circles as "front loading" and "political engineering."

Amazon won its battle with Microsoft over the Pentagon's cloud contract, but taxpayers and military readiness might be the ultimate losers as defense industry lobbyists sink their claws into DoD officers and procurement managers to take chunks of the multi-cloud business. If JWCC follows the typical DoD playbook of breaking up a valuable contract into multiple subcontractors spread across politically influential states and Congressional districts, it will harm military readiness and taint the multi-cloud concept with the stain of a massive bureaucratic fiasco.


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