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Pentagon cancels disputed JEDI Cloud contract with Microsoft


The Pentagon’s chief information officer, John Sherman, told reporters Tuesday that during the protracted legal battle with Amazon, “the landscape has evolved” with new possibilities for large-scale cloud computing services. Thus it was decided, he said, to start over and seek multiple vendors.

Sherman said JEDI will be replaced by a new program called Joint Warfighter Cloud Capability, and that both Amazon and Microsoft will “likely” be awarded parts of the business, though neither is guaranteed. Sherman said three other big cloud service providers — Google, IBM and Oracle — may also qualify.

Microsoft responded to the Pentagon’s announcement, saying, “We understand the rationale for the DoD, and we support them and every military member who needs the mission-critical 21st century technology that JEDI would have provided. DoD faced a difficult choice: continue with a year-long litigation battle or find another way forward.”

Amazon said it understands and agrees with 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 offers “but was the result of external influence that has no place in government procurement.”

Oracle, which had previously sought a JEDI contact but did not make it to the final round, declined to comment on Tuesday. In separate statements, IBM said it was evaluating the new Pentagon approach and Google said it looked forward to discussing it with Pentagon officials.

The JEDI project began with a $1 million contract award for Microsoft, meant as an early stage in a 10-year deal that could reach $10 billion in value. The project that will replace it is a five-year programme; Sherman said no exact contract price has been set but it would be “in the billions”. Sherman said the government would negotiate the amount to be paid to Microsoft to conclude the 2019 deal.

Amazon Web Services, a market leader in providing cloud computing services, was long considered a prime candidate to run the Pentagon’s joint venture defense infrastructure project, known as JEDI. The project was intended to store and process large amounts of classified data, allowing the US military to use artificial intelligence to improve communication with soldiers on the battlefield and to intensify their battle planning and fighting capabilities. Permission was given.

The JEDI contract ran into legal challenges as it was awarded to Microsoft in October 2019. The losing bidder, Amazon Web Services, went to court arguing that the Pentagon’s process was flawed and unfair, including that it was unduly influenced by politics. .

This year the Pentagon was hinting that it might cancel the contract, saying in May that it had considered its options after a federal judge in April rejected the Pentagon’s move to dismiss key parts of Amazon’s lawsuit. felt compelled to reconsider.

The JEDI saga has been unusual for the political dimension associated with Trump. In April 2020, the Defense Department’s Inspector General’s Office concluded that the contracting process was in line with legal and government procurement standards. The inspector general found no evidence of White House interference in the contract award process, but that review also noted that investigators could not fully review the case because the White House would not allow unfettered access to witnesses.

Five months later, the Pentagon confirmed Microsoft as the winner of the contract, but work was halted by a legal challenge from Amazon.

In its April 2020 report, the Office of the Inspector General did not draw any conclusions about whether Redmond, Washington-based Microsoft Corp. was properly declared the winner. Rather, it looked at whether the decision-making process was fair and legal. It also investigated allegations of unethical behavior by Pentagon officials involved in the case and generally determined that no moral lapse affected the outcome.

That review did not find evidence of White House pressure in favor of Microsoft’s bid for the Pentagon, but noted that it could not definitively determine the full extent of White House talks with Pentagon decision-makers.

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

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