Pentagon sticking with Microsoft for $10 billion JEDI cloud contract after review

Microsoft logo at Ignite
Microsoft logo at Ignite (Image credit: Windows Central)

What you need to know

  • The Pentagon today reaffirmed its decision to award Microsoft a $10 billion cloud contract.
  • The JEDI contract in question has come under intense scrutiny ever since Microsoft beat Amazon out for the bid.
  • The contract is still on hold after a court challenge by Amazon earlier this year.

The Pentagon today announced that it still plans to continue work on the Joint Enterprise Defense Infrastructure (JEDI) contract with Microsoft after completing a re-evaluation of proposals. The deal will see Microsoft working with the Department of Defense (DoD) to modernize its IT infrastructure. The contract was awarded to Microsoft in 2019, a decision that was challenged by Amazon, who was among the bidders.

In a statement issued today, DoD said:

The Department has completed its comprehensive re-evaluation of the JEDI Cloud proposals and determined that Microsoft's proposal continues to represent the best value to the Government. The JEDI Cloud contract is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract that will make a full range of cloud computing services available to the DoD. While contract performance will not begin immediately due to the Preliminary Injunction Order issued by the Court of Federal Claims on February 13, 2020, DoD is eager to begin delivering this capability to our men and women in uniform.

"We appreciate that after careful review, the DoD confirmed that we offered the right technology and the best value," a Microsoft spokesperson told CNBC. "We're ready to get to work and make sure that those who serve our country have access to this much needed technology."

As the DoD notes, the contract is still on hold due to an injunction issued earlier this year. The court proceeding was initiated by Amazon, another bidder in the selection process, which claims that the DoD's decision was influenced by bias against Amazon and its CEO, Jeff Bezos, by President Donald Trump.

In a lengthy blog post (opens in new tab) responding to DoD's decision, Amazon stated:

When the DoD announced its plans for corrective action in March, we objected because it was clear this was nothing more than a "do-over" for Microsoft to fix its non-compliant proposal. Given the DoD did not agree to meaningfully review the many evaluation flaws outlined in our protest, we said the corrective action was likely to result in another contract award based on politics and improper influence and not based on the relative strengths of the two offerings. That is exactly where we find ourselves today, with the DoD's re-evaluation nothing more than an attempt to validate a flawed, biased, and politically corrupted decision. It's also important to point out that the DoD cited price as a major factor in the previous decision. This time, AWS offered a lower cost by several tens of millions of dollars. The DoD's decision to intentionally ignore the clear cost benefits offered by AWS, reinforces the fact that this corrective action was never meant to be fair.

While the JEDI contract is held up in courts, recent reporting suggests Microsoft is currently pursuing similar contracts with foreign governments.

Dan Thorp-Lancaster is the former Editor-in-Chief of Windows Central. He began working with Windows Central, Android Central, and iMore as a news writer in 2014 and is obsessed with tech of all sorts. You can follow Dan on Twitter @DthorpL and Instagram @heyitsdtl

  • Well, as a none US organicatin AWS is out of the question for our part. Google has some traction in our "market", but MS brings considerably more value to the table, and even if the price of licenses are higher in total, the cost in manpower can actually be significantly reduced as system integration over the entire "ecosystem" is much broader/better/more complete with more functionality, both on the user side and on the technical back end. Three/four years ago we said using these services was out of the question.
  • How did they have access to pricing some shady negotiation but as long as it is a valued partnership for citizens.
  • Don't know how it's done in US but the bidders with their offers must be published.
  • Someone should tell Amazon that "value" doesn't mean "lowest price". It means "more bang for your buck."
  • Nice MS! Get that money!
  • This is such a waste of resources on Amazon's part. There was a bid and they lost, just move on to the next project. What's the best outcome they hope to achieve? If somehow the court orders DoD to award the contract to Amazon, the working relationship there would be so toxic that it's probably not worth getting into. Yes Amazon can collect the $10 billion fee, but DoD will jump on them for every single breach of service levels and not be as tolerant as with a preferred partner, making life hell for Amazon and potentially eating up a good chunk of their margin with service credit payments.
  • Jeff is just trying to recuperate some of the money he had to split with his wife after he cheated and got caught! Guess he feels he doesn't want to be a "two time loser" when he should focus on not being a scumbag 😉. He's just a soar loser!
  • Good lord. Amazon is STILL whining about this? Get OVER it already. You lost, and no amount of screaming and stomping your feet is going to change anything.