Pentagon cancels disputed JEDI cloud contract with Microsoft
WASHINGTON – The Pentagon said Tuesday it canceled a disputed cloud-computing contract with Microsoft that could have been worth $10 billion. It will instead pursue a deal with Microsoft and Amazon and possibly other cloud service providers.
"With the shifting technology environment, it has become clear that the JEDI Cloud contract, which has long been delayed, no longer meets the requirements to fill the DoD's capability gaps," the Pentagon said in a statement.
The statement did not directly mention that the Pentagon faced extended legal challenges by Amazon to the original $1 million contract awarded to Microsoft. Amazon argued the Microsoft award was tainted by politics, particularly President Donald Trump's antagonism toward Jeff Bezos, who was CEO of Amazon. Bezos owns The Washington Post, a news outlet often criticized by Trump.
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The Pentagon's chief information officer, John Sherman, said Tuesday that during the lengthy legal fight with Amazon, "the landscape has evolved," presenting new possibilities for large-scale cloud computing services. It was decided, he said, to start over and seek multiple vendors.
Sherman said JEDI will be replaced by a program called Joint Warfighter Cloud Capability, and Amazon and Microsoft are "likely" to be awarded parts of the business, although neither is guaranteed. Sherman said the three other large cloud service providers – Google, IBM and Oracle – might qualify.
Microsoft said in response to the Pentagon announcement, "We understand the DoD's rationale, and we support them and every military member who needs the mission-critical 21st century technology JEDI would have provided. The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward."
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Joint Enterprise Defense Infrastructure project stuck in legal fights
Amazon Web Services, a market leader in providing cloud computing services, had long been a leading candidate to run the Pentagon's Joint Enterprise Defense Infrastructure project, known as JEDI. The project was meant to store and process vast amounts of classified data, allowing the U.S. military to improve communication with soldiers on the battlefield and use artificial intelligence to speed its war planning and fighting capabilities.
The JEDI contract became mired 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's process was flawed, unfair and improperly influenced by politics.
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The Pentagon said in May that it felt compelled to reconsider its options after a federal judge in April rejected a Pentagon move to have parts of Amazon's lawsuit dismissed.
The JEDI saga has been unusual for the political dimension linked to Trump. In April 2020, the Defense Department inspector general's office concluded that the contracting process was in line with legal and government purchasing standards. The inspector general found no evidence of White House interference in the contract award process, but that review said investigators could not fully review the matter because the White House would not allow unfettered access to witnesses.
Five months later, the Pentagon reaffirmed Microsoft as winner of the contract, but work remained stalled by Amazon's legal challenge.
In its report, the inspector general's office did not draw a conclusion about whether Microsoft, based in Redmond, Washington, was appropriately declared the winner. Rather, it looked at whether the decision-making process was proper and legal. It examined allegations of unethical behavior by Pentagon officials involved in the matter and generally determined that any ethical lapses did not influence the outcome.
The review said it could not determine the full extent of White House interactions with the Pentagon's decision makers.