Pentagon cancels disputed JEDI cloud contract with Microsoft


WASHINGTON (AP) – The Pentagon said on Tuesday it had canceled a disputed cloud computing contract with Microsoft that could have ended up being worth $ 10 billion. Instead, it will pursue a deal with Microsoft and Amazon and possibly other cloud service providers.

“With the changing technological environment, it has become clear that the long-delayed JEDI Cloud contract no longer meets the requirements to address the DoD capability gaps,” the Pentagon said in a statement. communicated.

The statement did not directly mention that the Pentagon had faced prolonged legal challenges from Amazon over the initial $ 1 million contract awarded to Microsoft. Amazon argued that the Microsoft award was tainted by politics, particularly then-President Donald Trump’s antagonism to Amazon founder Jeff Bezos, who resigned as chief executive of the company. Bezos owns The Washington Post, a newspaper often criticized by Trump.

Pentagon Chief Information Officer John Sherman told reporters on Tuesday that during the long legal battle with Amazon, “the landscape has changed” with new possibilities for large-scale cloud services. So it was decided, he said, to start over and look for several suppliers.

Sherman said JEDI would be replaced by a new program called Joint Warfighter Cloud Capability, and that Amazon and Microsoft would “likely” be assigned part of the business, although neither is guaranteed. Sherman said the other three big cloud service providers – Google, IBM and Oracle – could also be eligible.

Microsoft said in response to the Pentagon announcement, “We understand the raison d’être of DoD and we support them and all the military who need the critical 21st century technology that JEDI has provided. The DoD was faced with a difficult choice: whether to pursue what could be a multi-year court battle, or find another way forward. “

Amazon has said it understands and accepts the Pentagon’s decision. In a statement, the company reiterated its view that the 2019 contract award was not based on the merits of competing proposals “and instead was the result of outside influence out of place. in public procurement “.

Oracle, who previously sought out the JEDI contact but did not make it to the final round, declined to comment on Tuesday. In separate statements, IBM has said it is evaluating the Pentagon’s new approach, and Google has said it looks forward to discussing it with Pentagon officials.

The JEDI project began with the awarding of a million dollar contract to Microsoft, a first step in a 10-year deal that could have grown to $ 10 billion. The project that will replace it is a five-year program; Sherman said no exact contract value had been set, but would be “billions.” Sherman said the government will negotiate the amount Microsoft will receive for the termination of its 2019 agreement.

Amazon Web Services, a market leader in cloud computing services, has long been viewed as a prime candidate to execute the Pentagon’s common enterprise defense infrastructure project known as JEDI. The project was supposed to store and process large amounts of classified data, allowing the U.S. military to improve communications with soldiers on the battlefield and use artificial intelligence to accelerate its war planning capabilities and of fight.

The JEDI contract got bogged down in legal challenges almost as soon as it was awarded to Microsoft in October 2019. The losing bidder, Amazon Web Services, went to court arguing that the Pentagon process was flawed and unfair, especially that he was unduly influenced by politics. .

This year, the Pentagon had hinted that it could cancel the contract, saying in May it felt compelled to reconsider its options after a federal judge rejected in April a Pentagon decision to have key elements rejected. of the Amazon lawsuit.

The JEDI saga has been unusual for the political dimension linked to Trump. In April 2020, the Office of the Inspector General of the Ministry of Defense concluded that the procurement process complied with legal and government procurement standards. The Inspector General found no evidence of White House interference in the contract award process, but this review also indicated that investigators could not fully investigate the case because the White House would not allow not unimpeded access to witnesses.

Five months later, the Pentagon reaffirmed Microsoft as the winner of the contract, but work was stalled by Amazon’s legal challenge.

In its April 2020 report, the Inspector General’s office did not draw a conclusion as to whether Microsoft Corp., based in Redmond, Wash., Was appropriately declared the winner. Rather, he examined whether the decision-making process was appropriate and legal. He also reviewed allegations of unethical behavior by Pentagon officials involved in the case and generally determined that the ethical lapses did not influence the outcome.

This review found no evidence of pressure from the White House to have the Pentagon favor Microsoft’s offer, but it also said it could not determine with certainty the full extent of White House interactions. with Pentagon decision makers.

AP writers Matt O’Brien and Joseph Pisani contributed to this report.

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