After months of delays, the Pentagon is preparing to award a winner this summer in the department’s massive Joint Enterprise Defense Infrastructure (JEDI) contract.
This has not been a smooth road. The award is the culmination of months of contract protests, internal investigations and conflict-of-interest allegations that have bedeviled the source selection of the lucrative cloud contract that the Department of Defense had hoped to streamline and award in April.
Now, with only Microsoft and Amazon Web Services still in the running, and a federal court soon ruling whether the Pentagon’s single-vendor approach was illegal, the market is left to wonder how the lucrative JEDI contract ever reached this controversial point.
What is JEDI?
JEDI is a intended to be a general-purpose cloud for the Department of Defense. The Pentagon announced plans for JEDI in a memo in November 2017, laying out an acquisition strategy that included choosing a single cloud provider for an indefinite delivery, indefinite quantity contract, which allows the government to receive an unspecified amount of services for an unspecified amount of time.
The single provider will provide the department with unclassified, secret and top-secret services.
The contract could potentially be worth $10 billion over 10 years, which has prompted concerns within government and industry about the DoD being locked into the services of the winning vendor. But the contract does have exit ramps for the DoD after year two, five and eight.
Though JEDI will be the Pentagon’s primary cloud, it will not be the only option. The DoD has more than 500 other clouds, according to the Congressional Research Service. The DoD plans to move 80 percent of its systems to the cloud, with JEDI accounting for 20 percent of its cloud computing needs, Pentagon spokesperson Elissa Smith told the Federal Times.
How did we get here?
Shortly after the DoD finalized the JEDI request for proposals in July last year, Oracle filed a pre-award protest with the Government Accountability Office alleging that the Pentagon’s decision to choose a single-cloud provider was illegal, and asking the GAO to recommend to the DoD that the RFP be open to multiple vendors.
The GAO denied the request in November last year and said that the DoD abided by regulations and statutes governing competition. Oracle then took its case to the Court of Federal Claims, beginning a protracted court battle involving Amazon Web Services as a defendant-intervenor and an extended back-and-forth of sealed and redacted court documents.
In its initial redacted court filing, Oracle made numerous accusations against the Department of Defense, arguing that the RFP requirements were written so only two of the big six infrastructure-as-a-service providers could compete. Only Amazon meets the JEDI security requirements, while Microsoft has said that it will be able to, if the company wins the contract.
But the most contentious accusations went even further, with Oracle claiming in court documents that the department failed to adequately address conflicts of interest with DoD employees who previously worked with Amazon and, according to claims made in court, were directly involved in JEDI contract planning. The conflict of interest allegations prompted AWS to join the lawsuit in December, defending “AWS’s proprietary and financial interests in its proposal and AWS’s reputational interest” and downplaying the involvement of its former employees.
In April, the DoD concluded that it found no conflict in the acquisition process, but did uncover potential ethical violations. It directed those potential violations to the inspector general for further investigation. The same day, the DoD announced that AWS and Microsoft were the two finalists for the award, eliminating IBM and Oracle.
Court case aside, the DoD has struggled to assuage industry concerns and correct wrong information that has swirled about the contract, such as the false claim that JEDI will be the only DoD cloud.
“Despite worries that a number of individuals and companies have expressed about the procurement, the Department of Defense has made very little, if no, effort to clarify what its intent is with JEDI,” said Alex Rossino, senior principal research analyst at Deltek.
Rossino added, “their public relations haven’t been very good and that’s the reason why it has continued to cause problems.”
What is DoD saying about the JEDI proceedings?
DoD officials have expressed concern about implications of further delays to the JEDI award. In April, when the award was first expected to be made, the claims court judge told the DoD it couldn’t award the contract until July 19. On June 25, DoD CIO Dana Deasy said the DoD is now looking at the end of August to make an award, barring any unforeseen circumstances.
At a Defense Writers Group breakfast last month, Deasy called the court case and source selection “two disconnected events.” Asked what the contingency plan would be if the contract was delayed further, Deasy said that agencies may build out their own clouds.
The court filings have also included written testimony from the DoD. Air Force Lt. Gen. Bradford Shwedo, CIO and director of C4, wrote in a June 19 filing that “delaying implementation of the JEDI Cloud will negatively impact our efforts to plan, fight, and win in communications compromised environments, and will negatively impact our efforts to improve force readiness and hamper our critical efforts in AI.”
While the litigation continues to work itself out, Deasy said June 25 that the department is continuing to prepare different parts of the department for a general-purpose cloud.
“Now that we’re getting closer, it’s the logical time to sit down with the various services, start to describe what we believe a general-purpose cloud environment will look like, and more importantly, [to help] them to start thinking about what activity set they have coming up this fall and into next year that might be a good candidate,” Deasy said.
At the same time, Deasy stressed that if JEDI is further delayed, “who suffers in all this is the war fighter,” with an active set of programs that several combatant commands planning to transition to JEDI once it becomes available.
What will be on JEDI?
But even as DoD prepares to award the massive contract, there is one outstanding question the department seems unable to answer: what specifically will move to the general-purpose cloud?
Pressed for examples, Deasy said in his June 25 comments, “I’m probably not in a position to do that right now," pointing only to TRANSCOM as a specific command that has expressed plans to move to the JEDI cloud. He added that source selection must be made before Pentagon officials can decide what to move to the cloud because it kicks off the process of understanding what a general-purpose cloud will look like.
“You could see these kind of global commands and global operations making use of JEDI fairly early on, the logistics people making use of it fairly early on,” said Daniel Goure, senior vice president at the public policy think tank Lexington Institute.
Goure said he thinks the department will move enterprise systems over battlefield systems first as the DoD tries to figure out “how low do you go.” He also expects a wide range of DoD systems to go on the cloud, such as systems related to ISR, target recognition and intelligence databases.
“After that, it’s not clear,” Goure said.
Watch out for Congress
The contract has also recently drawn the ire of Congress. In May, the House Appropriations Committee left out funding for JEDI in DoD budget documents, a sign that lawmakers on Capitol Hill are also scrutinizing how the Pentagon has pursued this project.
“The Committee continues to be concerned with this approach given the rapid pace of innovation in the industry and that this approach may lock the Department of Defense into a single provider for potentially as long as 10 years,” the committee wrote in a May report.
It continued: "Therefore, the Committee directs that no funds may be obligated or expended to migrate data and applications to the JEDI cloud until the Chief Information Officer of the Department of Defense provides a report to the congressional defense committees on how the Department plans to eventually transition to a multi-cloud environment, as described in its January 2019 Cloud Initiative Report to Congress.”
It was also reported that Sen. Ron Johnson of Wisconsin and Rep. Steve Womack of Arkansas pressured President Donald Trump in June to intervene in the contract because of concerns over how the contract has moved forward. According to Bloomberg, Womack’s letter said “the JEDI program has the potential to waste hundreds of millions of dollars on technology that may not be the latest and most secure.”
“You’d think ... that leadership would want to clarify things so you don’t have Congress breathing down your neck and so you don’t have upset industry partners and things like that,” Rossino said. “And yet they’ve really made no real effort to do so.”
If the judge does rule that the government can proceed with the JEDI acquisition with Microsoft and Amazon, it is possible more protests could come after the source selection. So even if the judge rules in favor of Pentagon, the path forward for JEDI is, in the words of Yoda: “difficult to see. Always in motion is the future.”