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 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.
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