The decision by newly installed Secretary of Defense Mark Esper to review the Pentagon’s controversial Joint Enterprise Defense Infrastructure (JEDI) cloud contract has received a mixed reaction from Capitol Hill. There has been an accusation another review is politically motivated, but there are those that say that he needs to review the contract anyway given his new position.
“He would be remiss if he just takes office and there’s a $10 billion procurement that’s gotten a lot of heat on the Hill and now in the White House, and he didn’t step in and at least do his due diligence and take a look at it,” said Alex Rossino, senior principal research analyst at Deltek, an enterprise cloud software provider. “It wouldn’t be a smart move on his part.”
The contract, which is potentially worth $10 billion over 10 years, will serve as the Pentagon’s general services cloud. Amazon Web Services (AWS) and Microsoft are the final two contenders left in the running. But Oracle, which was eliminated earlier this year, has continuously challenged the JEDI contract throughout the process.
Back in June, DoD Chief Information Officer Dana Deasy said that the Pentagon was looking to make the award by the end of August. But as that date has approached, lawmakers and President Donald Trump have expressed concern over the Pentagon’s handling of the contract.
“To not review it would have been misfeasance; not just stupid, but misfeasance,” said Daniel Goure, senior vice president of the Lexington Institute, a public policy think tank.
In a statement Aug. 1, DoD spokesperson Elissa Smith noted that secretary was doing what he said he’d do all along.
“Keeping his promise to Members of Congress and the American public, Secretary Esper is looking at the Joint Enterprise Defense Infrastructure (JEDI) program. No decision will be made on the program until he has completed his examination,” Smith stated.
But Sen. Mark Warner, D-Va., wrote in a tweet Aug. 1 that the decision didn’t "pass the smell test.” Trump has a longstanding feud with Amazon founder Jeff Bezos, who also owns the Washington Post.
“It’s important that we maintain a fair & competitive process for DoD contracts, but for the president to use the power of his office to punish critics in the media would be a complete abuse of power,” Warner tweeted. “This does not pass the smell test & we need some answers.”
The JEDI cloud procurement process was initially hampered by allegations from Oracle of conflicts of interest between several Amazon Web Services officials who worked at the Pentagon.
The result won’t change “unless there’s something none of us have heard about yet, a real glitch in the system, a pothole,” Goure said. “This has been looked at a number of times.”
There has also been confusion around how the JEDI cloud fit into the DoD’s cloud strategy, which states it wants a “multi-cloud, multi-vendor strategy that incorporates a general-purpose cloud and fit for purpose clouds.” The Pentagon has said that the JEDI cloud will host 80 percent of its systems.
“I don’t think that Esper’s review effort ... has to do with actually making a change to the strategy,” Rossino said. “I think it has to do with him ... catching up and maybe him just making sure he does his due diligence to make sure that he can say when they award the contract that he took a look at it and didn’t find anything out of order.”
There have been numerous calls from Capitol Hill to delay the award of the contract. Sen. Marco Rubio, R-Fla., sent a letter to National Security Advisor John Bolton asking him to delay the award earlier this month. According to a Rubio spokesperson, his staff worked with Esper’s office to ensure a review of the contract.
“I am pleased Secretary Esper is taking immediate action to review the JEDI Cloud contract after I voiced concerns that the Department of Defense might award the contract before the Inspector General has finished its investigation into this matter,” Rubio said.
Others on Capitol Hill also cheered the secretary’s decision. Rep. Steve Womack, R-Ark., said he was glad that the secretary was going to review the “many shortcomings of the JEDI procurement process.”
“It’s the right move, and one I have been calling for since JEDI’s advancement,” Womack said in a statement.
Back in June, Womack reportedly wrote a letter to President Donald Trump urging him to get involved in the contract proceedings. Sen. Ron Johnson, R-Wisc., also reportedly sent a letter to the president.
“Needed modernization should never come at the expense of effectiveness. Our war fighters require the most secure and innovative tools, and American taxpayers deserve a transparent and accountable procurement process,” Womack said.
President Trump reportedly has concerns about the JEDI contract and, according to CNN, wants to “scuttle” the contract and reopen it. Last month, a group of four Republican lawmakers on the House Armed Services Committee, including the ranking member Rep. Mac Thornberry, R-Texas, wrote to the president asking him to not get involved in the process. Thornberry’s office declined to comment on Esper’s review.
“The president has complained about a number of programs. You’ve got situations from a dollar perspective or he thought that steam catapults were better than electromagnetic launch and guess what? Nothing’s changed,” Goure said. “I mean, you just have a little bit of response on cost and pricing and people have sort of pulled up their boots.”
The JEDI cloud procurement has survived numerous challenges, with the Government Accountability Office ruling against Oracle’s pre-award protest and a federal judge ruling against Oracle in the U.S. Court of Federal Claims in July.
The claims court ruled that there is no merit to Oracle’s assertion that it was wronged in the award process because it never met the minimum cybersecurity requirements in the contract. The court said that the decision to make a single award had no impact on the security requirements that Oracle didn’t meet.
“The only logical conclusion is that, if multiple awards were made, the security concerns would ratchet up, not down,” wrote U.S. Court of Federal Claims Judge Eric Bruggink wrote.
Therefore, “under any scenario, Oracle would be out of the competition,” said Bruggink.
Lots of government contracts receive contract protests, but the JEDI procurement is different because of the amount of attention it has received, said Alan Chvotkin, executive vice president and counsel of the Professional Services Council.
“This one takes it one level higher because the folks haven’t let go,” said Chvotkin. “Some advocates are continuing to raise the conflict of interest questions as [they’re] not being satisfied by the department’s analysis or the judge’s conclusion.”
So what does this mean going forward?
“Now the question is going to be, if [Esper] finds nothing wrong, and there’s no reason to find anything wrong — I mean we’ve been through this four or five times — is he going to tell the president ‘we got this Mr. President and it’s all okay?’” Goure said.