Microsoft won the contract for the Department of Defense’s enterprise cloud, potentially worth $10 billion over 10 years, the Pentagon announced Oct. 25.
The tech giant won the award over Amazon Web Services, just three days after Secretary of Defense Mark Esper recused himself from the award after months of review because his son worked for IBM. Amazon was widely considered by industry to be the front runner for the award.
The JEDI contract process continues to be under investigation by the DoD inspector general and stuck in federal court.
In a statement, Microsoft’s president of U.S. Regulated Industries Toni Townes-Whitley said the company looks forward to “expanding our longstanding partnership” with the Pentagon.
“We brought our best efforts to the rigorous JEDI evaluation process and appreciate that DoD has chosen Microsoft," Townes-Whitley said in a statement. “We are proud that we are an integral partner in DoD’s overall mission cloud strategy.”
The Pentagon plans to move 80 percent of its systems over to the Joint Enterprise Defense Infrastructure cloud, better known as JEDI. The cloud will contain both unclassified and classified data. In a statement, DoD CIO Dana Deasy heralded the contract award as a win for the war fighter.
"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 Chief Information Officer 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 contract has been controversial from the start. Oracle, which was eliminated from competition earlier this year, filed a pre-award protest shortly after the request for information was released. That quickly spiraled into a lawsuit that cause significant delays to the contract. The court battle was marked by conflict of interest charges against several former Amazon employees who went to work for the DoD. The Pentagon won the lawsuit in July, but Oracle has brought the suit to the U.S. Court of Appeals.
“We’re surprised about this conclusion,” an Amazon 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.”
The DoD cloud strategy called for a multi-cloud, multi-vendor strategy, but industry has had concerns that the award will lead to vendor lock-in.
“This continues our strategy of a multi-vendor, multi-cloud environment as the department’s needs are diverse and cannot be met by any single supplier," the DoD wrote in a news release. "This contract will address critical and urgent unmet war-fighter requirements for modern cloud infrastructure at all three classification levels delivered out to the tactical edge.”
In its release, the Pentagon wrote that it planned to spend $210 million in the first two years on user adoption of the cloud.
The contract has drawn the scrutiny of lawmakers on Capitol Hill, including Republican senators Marco Rubio of Florida and Ron Johnson of Wisconsin. At least one congressman, Rep. Jim Langevin, D-R.I., praised the award.
“Advanced general-purpose cloud is the industry norm, and it’s past time the Department of Defense had access to these capabilities,” Langevin said in a statement. "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 war fighters.”
Deasy is set to testify in front of the Senate Armed Services Committee for his confirmation hearing Oct. 29.