Defense Department Canceled its Contract With Microsoft

The U.S. Defense Department decided to cancel the $10 billion JEDI or Joint Enterprise Defense Infrastructure cloud computing project. The U.S. military awarded that contract to Microsoft in 2019. The contract awarded to Microsoft in 2019 is one of the most controversial contracts in recent years.

The Defense Department stated that the program’s designs no longer meets its needs. That project was developed at a time when the department’s needs were different. The department will replace this project with another cloud infrastructure contract. The Defense Department also announced a multi-vendor contract called the Joint Warfighter Cloud Capability contract. The department considers tech giants Microsoft and Amazon the only companies capable of providing the necessary infrastructure. The department, nonetheless, will perform market research to see if other competitors could fit the bill.

The Defense Department said its cloud vendor for the new contract would have to meet several requirements, like working on all three classification levels. The Pentagon expects the new contract value to be in the multibillions, though it is still determining the maximum value. The

department expects the contract to last five years. The contract will include a three-year performance base and two one-year option periods. The Pentagon expects the new project to be a bridge to their longer-term approach. The Defense Department expects to make the direct rewards through the contract around April 2022 and open a broader competition as soon as 2025.

Microsoft and Amazon

The purpose of the JEDI project was to modernize the Pentagon’s IT operations. The department awarded the contract to tech giant Microsoft. It was competing against another tech giant Amazon.

A month later, Amazon’s cloud computing unit Amazon Web Services filed a lawsuit in the U.S. Court of Federal Claims. Amazon Web Services argued that President Donald Trump’s bias against Jeff Bezos influenced the fate of the contract.

Last year, the Pentagon’s inspector general released a report about the JEDI cloud computing project. According to the report prepared by Pentagon’s inspector general, the award didn’t appear to be influenced by the White House. But the inspector general mentioned in the 313-page report one important problem. White House officials were reluctant to cooperate with the inspector general. Hence, it could not complete its assessment of allegations regarding ethical misconduct.