DOD cancels $10 billion JEDI contract at center of Microsoft and Amazon feud

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Engadget 06 July, 2021 - 12:48pm 32 views

When the lawsuit was eventually unsealed later that same year, it came out that Amazon believed it lost the contract due to interference from former President Donald Trump. According to the company, Trump “used his power to ‘screw Amazon’ out of the JEDI Contract as part of his highly public personal vendetta against Mr. Bezos, Amazon and The Washington Post.”

Following an internal audit, the Pentagon's inspector general released a report that said it found no evidence that the Trump Administration had interfered with the procurement process. At the same time, it noted that several White House officials did not cooperate with the probe. As such, it could not definitively determine whether the administration had affected the process.     

Microsoft went on to say the episode highlights the need for lawmakers to look at the challenge process. "The 20 months since DOD selected Microsoft as its JEDI partner highlights issues that warrant the attention of policymakers: when one company can delay, for years, critical technology upgrades for those who defend our nation, the protest process needs reform," it said.  

We’ve reached out to Amazon for its response to the development, and we’ll update this article when we hear back from the company.

Alongside the cancelation, the Pentagon announced a new multi-vendor contract called the Joint Warfighter Cloud Capability (JWCC). The agency plans to collect proposals from both Amazon and Microsoft. It contends they're the two vendors best suited to meet its needs, though it also plans to see if other companies can help it modernize its IT infrastructure. The Defense Department told CNBC and other outlets during a call that it expects to award the first direct JWCC contracts in 2022, with the procurement process to open more broadly as soon as 2025. It also said the litigation with Amazon wasn't the primary reason for the cancelation of JEDI. “The mission needs have been our primary driver on this,” John Sherman, the DOD acting chief information officer, said. 

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Pentagon cancels JEDI contract as Amazon, Microsoft duke it out

Fox Business 06 July, 2021 - 02:35pm

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The DOD said JEDI, initially crafted in 2017, "no longer meets its needs" due to "evolving requirements, increased cloud conversancy, and industry advances" in a statement to FOX Business.

"JEDI was developed at a time when the Department’s needs were different and both the [cloud service provider] technology and our cloud conversancy was less mature," acting DOD Chief Information Officer John Sherman said in a Tuesday statement. 

He added that with the Pentagon's newer initiatives including the Joint All Domain Command and Control (JADC2) and the Artificial Intelligence and Data Acceleration (ADA) initiative, "the evolution of the cloud ecosystem within DOD, and changes in user requirements to leverage multiple cloud environments to execute mission," the department's "landscape has advanced and a new way-ahead is warranted to achieve dominance in both traditional and non-traditional war-fighting domains."

Amazon Web Services went to court arguing that the Pentagon's process was flawed and unfair, including that it was improperly influenced by then-President Donald Trump's dislike of Amazon and its then-CEO Jeff Bezos. Bezos also owns The Washington Post, a news outlet often criticized by Trump.

This year, the Pentagon had been hinting that it might scrap the contract, saying in May that it felt compelled to reconsider its options after a federal judge in April rejected a Pentagon move to have key parts of Amazon's lawsuit dismissed.

"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," Microsoft President of U.S. Regulated Industries Toni Townes-Whitley said in a Tuesday blog post responding to the news. "The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward."

Townes-Whitley then aimed criticism at Amazon, saying that "when one company can delay, for years, critical technology upgrades for those who defend our nation, the protest process needs reform.

"It’s clear the DoD trusts Microsoft and our technology, and we’re confident that we’ll continue to be successful as the DoD selects partners for new work," she said. "Their decision today doesn’t change the fact that not once, but twice, after careful review by professional procurement staff, the DoD decided that Microsoft and our technology best met their needs."

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Pentagon Axes JEDI Contract Amid Delays From Amazon-Microsoft Legal Tussle

PCMag 06 July, 2021 - 02:35pm

The Defense Department is going to instead solicit both companies for proposals on a new cloud computing contract for the US military.

The US Defense Department is canceling a $10 billion cloud computing contract that Amazon and Microsoft have been fighting over in court. 

“The Department has determined that, due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs,” the Pentagon told PCMag in a statement.

Instead, the Defense Department is going to solicit both companies for proposals on a new "multi-cloud/multi-vendor" contract called the Joint Warfighter Cloud Capability. The Pentagon expects only Amazon and Microsoft will possess the capabilities to meet the US military’s cloud computing needs, although the procurement process could open to other vendors, pending guidance from market research. 

The announcement ends the testy legal saga around the original JEDI contract, which stood for  Joint Enterprise Defense Infrastructure. In 2019, the Pentagon awarded the contract to Microsoft, giving the company a huge win in the cloud computing market. However, Amazon challenged the decision in court on claims then-President Donald Trump allegedly manipulated the tendering process to slight Amazon founder Jeff Bezos. 

The legal battle has caused work on the JEDI contract to stall. As a result, it seems the Pentagon decided to axe the project for a compromise solution. The Defense Department also points out the technical specifications for the original JEDI contract are now outdated.

"JEDI was developed at a time when the Department’s needs were different and both the CSPs (communication service providers) technology and our cloud conversancy was less mature," Acting DoD Chief Information Officer John Sherman wrote in the statement.

In response to the news, Microsoft said "we understand the DoD’s rationale,” and added it supported the decision. 

“The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward,” the company wrote in a statement. “The security of the United States is more important than any single contract, and we know that Microsoft will do well when the nation does well.”

Still, Microsoft’s statement also criticizes Amazon for preventing the Pentagon from upgrading the US military’s IT infrastructure. “When one company can delay, for years, critical technology upgrades for those who defend our nation, the protest process needs reform,” Redmond wrote. 

Amazon did not immediately respond to a request for comment.

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Pentagon scraps $10B JEDI cloud contract award to Microsoft

Yahoo Finance 06 July, 2021 - 02:06pm

Investors will return on Tuesday to a holiday-shortened week, with the stock market closed Monday in observance of the Fourth of July in the U.S.

The U.S. Department of Defense has canceled a planned 10-year, $10 billion cloud computing contract known as JEDI that had been awarded to Microsoft in 2019, while launching plans for a new multi-vendor cloud computing project that will likely be split between Microsoft and Amazon.

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“Due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs," the Pentagon said in a statement, casting the future of JEDI, or Joint Enterprise Defense Infrastructure, into limbo.

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Pentagon Scraps $10-Billion Contract With Microsoft, Bitterly Contested By Amazon

NPR 06 July, 2021 - 01:27pm

The Defense Department is scrapping its $10-billion cloud-computing contract with Microsoft, which has been mired in a legal battle with Amazon.

The Pentagon's announcement on Tuesday ends what has been a complicated and highly politicized saga of one of the most lucrative military tech contracts in U.S. history.

Amazon has been litigating the contract — known as JEDI — since 2019, when the company was stunned by its loss of the lucrative 10-year award to Microsoft. Amazon's legal strategy has included a call for testimony from former president Donald Trump, arguing his disdain for founder Jeff Bezos swayed the bidding process.

The Defense Department on Tuesday said the JEDI contract — short for the Joint Enterprise Defense Infrastructure — no longer met its needs, "due to evolving requirements, increased cloud conversancy, and industry advances."

"The security of the United States is more important than any single contract, and we know that Microsoft will do well when the nation does well," Microsoft executive Toni Townes-Whitley wrote in a blog post on Tuesday, adding: "When one company can delay, for years, critical technology upgrades for those who defend our nation, the protest process needs reform."

An Amazon representative did not immediately respond to NPR's inquiry on Tuesday.

Editor's Note: Amazon and Microsoft are among NPR's recent financial supporters.

Pentagon cancels disputed JEDI cloud contract with Microsoft

Yahoo Finance 06 July, 2021 - 11:39am

“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 that the Microsoft award was tainted by politics, particularly then-President Donald Trump's antagonism toward Amazon's chief executive officer, Jeff Bezos. Bezos owns The Washington Post, a news outlet often criticized by Trump.

The Pentagon's chief information officer, John Sherman, told reporters Tuesday that during the lengthy legal fight 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 “likely” will 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, too.

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.”

The JEDI project began with the $1 million contract award for Microsoft, meant as an initial step in a 10-year deal that could have reached $10 billion in value. The project that will replace it is a five-year program; Sherman said no exact contract value has been set but that it will be “in the billions.” Sherman said the government will negotiate the amount Microsoft will be paid for having its 2019 deal terminated.

Amazon Web Services, a market leader in providing cloud computing services, had long been considered 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 communications with soldiers on the battlefield and use artificial intelligence to speed up 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 and unfair, including that it was improperly influenced by politics.

This year the Pentagon had been hinting that it might scrap the contract, saying in May that it felt compelled to reconsider its options after a federal judge in April rejected a Pentagon move to have key 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 also 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 April 2020 report, the inspector general’s office did not draw a conclusion about whether the Redmond, Washington-based Microsoft Corp. was appropriately declared the winner. Rather, it looked at whether the decision-making process was proper and legal. It also examined allegations of unethical behavior by Pentagon officials involved in the matter and generally determined that any ethical lapses did not influence the outcome.

That review did not find evidence of White House pressure for the Pentagon to favor the Microsoft bid, but it also said it could not definitely determine the full extent of White House interactions with the Pentagon’s decision makers.

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The Department of Defense is canceling its $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud contract.

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Pentagon axes multibillion-dollar JEDI cloud-computing contract

The Hill 06 July, 2021 - 11:35am

Both companies, however, will likely win deals from a new, multibillion-dollar, multivendor effort to create the Defense Department’s cloud capability.

“Today, the Department of Defense (DoD) canceled the Joint Enterprise Defense Infrastructure (JEDI) Cloud solicitation and initiated contract termination procedures,” the department said in a statement.

The Pentagon cited “evolving requirements, increased cloud conversancy, and industry advances,” as the reason for the termination, saying JEDI “no longer meets its needs.”

“JEDI, conceived with noble intent and a baseline now several years old, was developed at a time when the Department’s needs were different and our cloud conversancy less mature,” Pentagon acting Chief Information Officer John Sherman told reporters on a media call.

“In light of new initiatives along with changes in DOD and user requirements to leverage multiple cloud environments for mission needs, our landscape has evolved and a new way ahead is warranted.”

Amazon for more than a year has contested the $10 billion contract awarded to Microsoft in October 2019.

The Pentagon has continually stressed its need for an enterprise cloud — meant to modernize its IT operations and house nearly all DOD systems except the most secretive — to connect war fighters with consolidated data that is currently stored in servers throughout military installations across the globe.

The Trump administration denied those charges, and the Pentagon maintained that Microsoft was simply best-equipped to create DOD's cloud infrastructure.

Microsoft and the Pentagon attempted to get work underway on the contract, but the U.S. Court of Federal Claims put a pause on the activity last year.

Then in April the court decided not to dismiss a protest lawsuit filed by Amazon, and the DOD then announced it would review the project.

The Pentagon will now look to a new cloud effort, the Joint Warfighter Cloud Capability (JWCC), a multi-cloud/multivendor contract launched Tuesday. 

“The JWCC’s multi-cloud environment will serve our future in a way that JEDI’s single award, single cloud structures simply cannot do,” Sherman said.

But defense officials will only solicit proposals from Microsoft and Amazon Web Services, “as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the Department’s requirements,” according to the Tuesday statement.

The Pentagon included the caveat that “over the next roughly three months” it will conduct additional market research and speak with all five U.S. companies that could provide cloud service on such a massive scale, known as “hyperscale providers,” to determine whether any of them could also meet the requirements, Sherman said.

If so, then “we will extend solicitations to them as well,” he said, adding that later on Tuesday he will personally reach out to leaders at the five companies: Microsoft, Amazon Google, Oracle and IBM.

In a statement posted to Microsoft's official blog, the company said it has accepted the Pentagon’s decision to cancel.

“The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward. ... Because the security of the United States through the provision of critical technology upgrades is more important that any single contract, we respect and accept DoD’s decision to move forward on a different path to secure mission-critical technology,” wrote Toni Townes-Whitley, president of U.S. regulated industries at the company.

Microsoft also singled out Amazon in calling for changes on to how the Pentagon handles companies protesting contract awards, noting that “when one company can delay, for years, critical technology upgrades for those who defend our nation, the protest process needs reform.”

Townes-Whitley said that the Pentagon’s decision “doesn’t change the fact that not once, but twice, after careful review by professional procurement staff, the DoD decided that Microsoft and our technology best met their needs. It doesn’t change the DoD Inspector General’s finding that there was no evidence of interference in the procurement process. And it doesn’t change the fact that the DoD and other federal agencies – indeed, large enterprises worldwide — select Microsoft to support their cloud computing and digital transformation needs on a regular basis.”

Amazon did not immediately respond to The Hill's requests for comment. 

Asked how much the litigation played a part in the shift to JWCC, Sherman said it was the technology and landscape changes in the time since the JEDI contract was first awarded that made the Pentagon reconsider its needs.

“The mission needs have been our primary driver on this,” he said. "In so far as the litigation is concerned, we’ve been at this for a few years now."

The cost of the new contract "will be fleshed out in the coming months,” and the Pentagon expects the total value to be "in the billions of dollars" and last up to five years and act as a "bridge to our longer-term approach," Sherman said.

He noted that the Pentagon plans to send out solicitations to companies in mid-October, award direct contracts as soon as April 2022 and is aiming for a "full and open competition" for early 2025.

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Lawmakers say DoD undercounts civilian casualties

DefenseNews.com 06 July, 2021 - 03:00am

In a letter to Defense Secretary Lloyd Austin, Sen. Elizabeth Warren, D-Mass., and Rep. Ro Khanna, D-Calif., are asking for a formal probe into potential undercounting of civilian casualties by the Defense Department, saying the issue cuts to the core of military integrity and transparency.

Last month, a Pentagon report acknowledged 23 civilian deaths and 10 injuries from the result of its operations in Afghanistan, Iraq and Somalia, during 2020. That’s a significant drop from the 132 civilian casualties the Pentagon acknowledged the previous year.

But the lawmakers believe the true number could be almost five times higher, citing Airwars, an independent group that tracks airstrikes and civilian casualties. They want Austin to review the discrepancies and to require future military probes into civilian casualties give greater weight to external information sources.

Still, Afghanistan remains among the deadliest places in the world to be a civilian.

Their June 30 letter also faults the Department of Defense for not using any of its $3 million allocation for condolence or “ex gratia” payments, which they say would have been more than enough for payments to every victim’s family.

“This is unacceptable and not how we uphold our nation’s values and advance our interests overseas. We urge you to take a more serious look at both of these issues,” the letter reads.

“We need to openly consider all the costs, benefits, and consequences of military action, and that includes doing everything we can to prevent and respond to civilian harm. Strengthening investigations, accurately and transparently reporting on civilian harm, expressing condolences for harm when it happens, and learning from these incidents to prevent harm in the future are all essential steps that reinforce the importance of protecting civilians as a national security priority and as a moral and ethical imperative.”

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Pentagon spokesman Mike Howard said that no ex gratia payments were made in 2020 after leaders issued an interim regulation a year ago to comply with the annual defense policy law. The rule meant only civilians who are deemed to be “friendly to the United States” would be eligible for the payments, and civilians who assume “risks inherent in supporting military operations” are excluded.

“Numerous factors can affect a commander’s decision to offer an ex gratia payments,” Howard said.

Howard confirmed DoD is working to issue major new policy change later this year.

The Pentagon’s latest annual report on civilian casualties, published June 2, recorded 20 deaths and 5 injuries from seven actions in Afghanistan, while a United Nations arm there says international forces killed 89 and injured 31 civilians.

AFRICOM said it will issue a new quarterly report on the status of ongoing civilian casualty allegations starting at the end of April.

For Iraq, the report acknowledged one civilian death during U.S. airstrikes targeting Iranian-backed fighters at Karbala airport on March 13, 2020. It apparently omits two civilian policemen whose deaths were publicly reported.

The Pentagon commonly acknowledges civilian casualty cases retroactively that it hadn’t acknowledged initially. The latest report added 63 deaths and 22 injuries for 2017 through 2019, mostly in Syria and Yemen.

In civilian casualty investigations, Howard said DoD seeks to use all available information, such as “operational planning data and intelligence sources” but uses different methodologies from nongovernmental organizations, international observers and the press, whose information “can be valuable [but can also be] incomplete or not necessarily valid.”

“We acknowledge there are differences between DoD assessments of civilian casualties and reports from other organizations, including NGOs,” Howard said. “DoD personnel engage with representatives from NGOs and IOs regularly to discuss reports and assessments of civilian casualties, including at both action officer and leadership levels.”

Joe Gould is the Congress reporter for Defense News.

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