Pentagon Sticks with Microsoft for JEDI Contract

Posted on September 4, 2020 by Paul Thurrott in Amazon, Cloud, Microsoft with 17 Comments

The U.S. Department of Defense announced today that it will move forward with Microsoft as the winner of its $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract.

“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,” a Pentagon statement reads. “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.”

The DOD awarded Microsoft with the JEDI contract in October 2019, outraging Amazon, which was widely understood to be the front-runner, and its co-founder Jeff Bezos, who feels that he and his company are being targeted for political reasons.

Thanks to a formal complaint from Amazon, the Department of Defense (DOD) reviewed the contract award and found in April that it was correct. But Microsoft revealed in May that Amazon had continued fighting the defeat, leading to a somewhat unhinged outburst from Amazon in the form of a lengthy public statement.

Microsoft was originally set to begin working on the JEDI project in February, but that was halted by a federal judge who ruled that the DoD had likely evaluated one of Microsoft’s storage offerings incorrectly. Amazon had argued that had this part of the contract been correctly evaluated, it would have won the contract. But today’s announcement indicates that while the DoD agrees it made a mistake, it wasn’t enough to impact the outcome.

And no, it’s not over yet: Amazon can continue contesting the contract, and most likely will.

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Comments (20)

20 responses to “Pentagon Sticks with Microsoft for JEDI Contract”

  1. navarac

    Sour grapes on Amazon's part?

    • zhackwyatt

      In reply to navarac:

      It is 10 billion dollars. I wouldn't go down without a fight.

    • jwdixonjr

      In reply to navarac:

      Anyone that has done time in the government or around the DC beltway knows that any contract that is substantial will get contested. Sometimes the losing contractor wins and sometimes they don't but seems to be the cost of doing business for contractors. Meaning, it's often worth a shot for them to see if they can recoup or you'll sometimes see the winner offer the losing firm a sub-contractor role for a portion of the business to not contest the contract. Always fascinating to see how business gets done when it comes to USG.

  2. MutualCore

    Amazon will continue to get court injunctions and simply wait out Trump's defeat. Then with a friendly Biden administration, the DOD will reverse back to Amazon.

  3. ghostrider

    Greater than 50% of the decision in a contract like this is political - a somewhat lesser part is technical - that's how the wheels turn. Let's hope it goes to plan, because transitions like this often don't

  4. JH_Radio

    It probably doesn't help that Amazon is under antitrust scrutiny.

  5. jdawgnoonan

    I am happy to hear this.

  6. yogesh

    Shouldn't the line "The U.S. Department of Justice announced today" be "The U.S. Department of Defense announced today".

  7. will

    With an election coming up, and if Trump is not re-elected, I’m curious what a new administration would do? I think this is what Amazon is hoping and looking forward to?

    • plm

      In reply to will:

      There seems to be a lot of misunderstandings as to how major federal procurements like this happen. When I hear about the conspiracies between the Whitehouse and DOD against the Washington Post, etc., it reveals a total lack of understanding how federal procurement occurs.

      No doubt corruption occurs in some procurements, but it's at much lower levels. Contractors influencing evaluators. Most of what we might describe as corruption occurs in preparing the procurement documents that are ultimately used to select the vendor. In some cases, the Congress gets involved to specify aspects of a procurement that favor specific congressional districts.

      I suspect everyone involved in this procurement knew that it would be scrutinized because of the dollar value involved. That kept everyone at arm's length after the procurement entered the post-RFP development phase.

      Probably wouldn't make an interesting book, but that's generally how it's done. Think about the DOD's purchase of the k-cars during the Carter/Reagan years. The A10 and the role congress played in that specification.

      It's a matter of public record, but I've not done the research. When was the solicitation for proposals issued? When did the procurement begin? I wouldn't be surprised it was before January 2017.

      The current occupant of the White House may be a bully. He may be corrupt. But I doubt this procurement was influenced by him at this late stage. Is there any evidence to the contrary? And a pissing match between the WH and Washington Post isn't evidence of specific acts here. It's an observation and an invitation to look more closely for dispositive evidence.

      • Paul Thurrott

        Two things. Nothing that happens under this administration is normal, so you can throw out whatever rule book these agencies were using in the past. And yes, there is evidence enough to wonder how the frontrunner in this contest was not awarded the contract. "The White House didn’t cooperate fully with its inquiry by issuing a 'presidential communications privilege' in which the general counsel was not allowed to ask White House staff 'questions about potential communications between White House and DoD officials about JEDI.' So it’s unclear how it arrived at this decision." "[A] video of DoD CIO Dana Deasy’s confirmation hearing last month, in which he was asked by a senator if Trump had influenced the contract award. Deasy didn’t directly deny it." "White House gagged officials from saying whether Donald Trump intervened in $10bn 'JEDI' Pentagon computing contract to stop it going to his enemy Jeff Bezos' Amazon, IG reveals"
        • Odinson

          In reply to paul-thurrott: On the other hand, since the 'resistance' leaked proprietary details about Microsoft's bid to Amazon they could just leak the communications between the WH and Pentagon -- if they were helpful to Amazon's case. Since it hasn't already happened, don't hold your breath.
          I think the Trump administration is done playing the perpetual "prove you're not corrupt" game.

    • wright_is

      In reply to will:

      Why? Microsoft has the better record worth government cloud contacts.

    • anoldamigauser

      In reply to will:

      I doubt that a new administration would do anything other than let the work get started. No one wins by holding the work up. In the scheme of things, a $10 billion / 10 year contract is nice, but hardly crucial to either company.

  8. saint4eva

    That is the only right thing to do.

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