Pentagon To Split $9bn Cloud Contract With Microsoft, Amazon, Google, Oracle

The US Department of Defense has confirmed that there will be no outright winner of its valuable cloud projects that previously triggered complaints, lawsuits and allegations of political interference from Donald Trump.

The Pentagon confirmed on Wednesday that it has awarded $9 billion worth of cloud computing contracts to Microsoft, Amazon Web Services, Alphabet’s Google, and somewhat surprisingly Oracle.

The Joint Warfighting Cloud Capability (JWCC) contract that runs until 2028 is the multi-cloud successor to the Joint Enterprise Defense Infrastructure (JEDI). That JEDI contract was engulfed in a political and legal storm after the Pentagon awarded the contract solely to Microsoft back in October 2019.

Joint Warfighting Cloud Capability (JWCC)

The decision to award the Joint Warfighting Cloud Capability, or JWCC series of contracts is in line with the DoD’s current effort to rely on multiple providers of remotely operated infrastructure technology, as opposed to relying on a single company.

A Department of Defense spokesperson told CNBC by email that “JWCC is a multiple award procurement composed of four contracts with a shared ceiling of $9 billion.”

All four of the technology companies have won indefinite delivery, indefinite quantity, or IDIQ, contracts, meaning that they can involve an indefinite amount of services for a specific period of time.

“The purpose of this contract is to provide the Department of Defense with enterprise-wide globally available cloud services across all security domains and classification levels, from the strategic level to the tactical edge,” the Pentagon said.

The surprise addition is Oracle, which is a much smaller cloud service provider compared to AWS, Microsoft Azure, or Google Cloud.

Oracle had previously been eliminated from bidding for the JEDI contract.

JEDI controversy

Wednesday decision should end years of disruption and legal challenges after the Pentagon had in October 2019 awarded the JEDI contract exclusively to Microsoft, despite Amazon’s AWS cloud division being widely regarded as favourite to win the contract.

Amazon was very unhappy at what it believed was political bias from former US President Donald Trump, and in November 2019 it filed an official complaint with the US Court of Federal Claims contesting the decision.

Andy Jassy even went so far as to publicly state that he believed the decision was not adjudicated fairly and called for the whole JEDI decision process to be reviewed.

But with no signs of movement from the Pentagon, Amazon in January 2020 filed a temporary restraining order with a US court to demand that Microsoft halt work on the DoD JEDI cloud contract.

Then in February 2020 a US judge granted Amazon’s request to temporarily halt Microsoft from moving forward on the JEDI cloud computing deal.

Essentially Amazon argued right from the start that politics got in the way of a fair contracting process, and in December 2019 Amazon officially named Trump in its court complaint, and accused him of exerting “improper pressure” and bias.

Amazon felt the Pentagon decision was politically motivated by Trump’s intense dislike of Amazon’s then CEO Jeff Bezos and the Washington Post, which Bezos owns.

Pentagon cancellation

After a US judge in 2020 granted Amazon’s injunction on the JEDI project, the Pentagon said it would reconsider parts of its decision to award Microsoft the project.

And two months later in April 2020, the US DoD Office of Inspector General said it was unable to rule out if President Trump’s White House influenced the decision.

But much to the frustration of AWS, in September 2020 the Pentagon concluded that Microsoft had been the best value for money for the contract.

AWS however in April 2021 won a small legal victory when the US Court of Federal Claims denied the motions filed by Microsoft and DoJ, requesting the Court dismiss AWS’s allegations that the Trump Administration interfered in the JEDI award.

These legal battles were however taking its toll on the Pentagon’s commitment to the JEDI project, and in May 2021 it emerged the US Department of Defense was considering the termination of the JEDI project altogether.

In July 2021 the Pentagon decided it had had enough and cancelled the JEDI cloud contract altogether.