The JEDI reboot allows U.S. to correct its mistake

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MarketWatch 07 July, 2021 - 02:55pm 8 views

What is Jedi cloud project?

The DoD's General Purpose Enterprise Cloud, also known as the Joint Enterprise Defense Infrastructure (JEDI) Cloud, is the initiative that will deploy foundational cloud technology, while leveraging commercial parity, to the entire Department, with a focus on where our military operates--from the homefront to the ... cloud.milJEDI Cloud Features

The Department of Defense announced Tuesday it's calling off the $10 billion cloud contract that was the subject of a legal battle involving Amazon and Microsoft. The JEDI, or Joint Enterprise Defense Infrastructure, deal has become one of the most tangled contracts for the Department of Defense. In a press release Tuesday, the Pentagon said that "due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs."

For those who may need a refresher, let's back up and revisit our earlier coverage to review how we arrived at this point.

Early on in Donald Trump's term, Axios spoke to five sources close to the White House who said the Republican was eager to "go after" Amazon and its CEO, Jeff Bezos. Referring to Trump, one source said at the time, "He's obsessed with Amazon. Obsessed." The article added, "The president would love to clip CEO Jeff Bezos' wings."

It was against this backdrop that the Pentagon was reportedly prepared to announce a decision on the JEDI contract, at which point Trump announced that he was looking "very seriously" at intervening in the contracting process because unnamed people had told him "it wasn't competitively bid."

Even at the time, the comments were odd: There was a competitive bidding process, and no company had secured the contract.

Nevertheless, on the heels of the then-president's comments, then-Defense Secretary Mark Esper said he intended to review the contract. According to a Washington Post report, the Pentagon chief's reexamination was the result of White House instructions and "11th-hour Oval Office intervention." There were "concerns" in the West Wing, the article added, that the lucrative contract "would go to Amazon."

Soon after, the contract went to Microsoft. Amazon sued, claiming that the Trump White House interfered with the contracting process for petty, political reasons. The online retailer bolstered the argument by citing Trump's own rhetoric: the initial court filing noted a Fox News segment, which Trump promoted via Twitter, that criticized the JEDI contract as the "Bezos bailout."

The Pentagon's inspector general took a closer look at what transpired but conceded that the Trump White House chose not to cooperate with the review. Imagine that.

That controversy now appears to have run its course, but the corporate competition will continue. From the NBC News report:

The Pentagon said in the press release that it still needs enterprise-scale cloud capability and announced a new multi-vendor contract known as the Joint Warfighter Cloud Capability. The agency said it plans to solicit proposals from both Amazon and Microsoft for the contract, adding that they are the only cloud service providers that can meet its needs. But, it added, it will continue to do market research to see if others could also meet its specifications.

The industry and its leaders can take some solace in the fact that the current U.S. president won't have a political ax to grind against any of the companies or its executives.

Read full article at MarketWatch

Pentagon scraps Trump's $10 billion cloud deal for Microsoft, reviving Amazon bid

Reuters 08 July, 2021 - 09:35pm

By Diane Bartz, David Shepardson, Doina Chiacu

Amazon said in 2019 the Pentagon decision was full of "egregious errors," which it suggested were a result of "improper pressure from Trump." The company cited a 2019 book that reported Trump had directed the Defense Department to "screw Amazon" reut.rs/2V4LqgQ out of the JEDI contract.

As recently as September the Defense Department re-evaluated the contract proposals and said Microsoft’s submission was the best.

Under the new Biden administration, the Pentagon said Tuesday Amazon and Microsoft are the only companies that can meet the department’s requirements but later noted that they are reaching out to other cloud providers in the next three months if they also meet the government’s standards.

Other top cloud companies include Oracle Corp, Alphabet Inc’s Google and IBM Corp.

The Pentagon hopes to have the first awards by April 2022 for its new Joint Warfighter Cloud Capability (JWCC).

John Sherman, acting chief information officer for the Defense Department, said he expects both Microsoft and Amazon will get cloud contracts. He said the need was urgent.

“I’ve got to get this now -- as soon as possible -- starting hopefully as soon as April,” Sherman said.

Microsoft shares were down 0.5%, while Amazon traded up more than 4% and hit a record high after the news.

Microsoft said in a statement the company was confident it will “continue to be successful as the DoD selects partners for new work”. Microsoft could submit a termination bid to recover costs of the scrapped project, Sherman said.

The now-cancelled Joint Enterprise Defense Infrastructure Cloud (JEDI) contract was budgeted for as much as $10 billion and was part of a broader digital modernization of the Pentagon aimed at making it more technologically agile.

“We don’t have an estimate yet, but I wouldn’t latch onto the $10 billion figure,” Sherman said.

“This plan involves a multi-cloud procurement by a full and open competition perhaps as soon as early 2025. For the near term, however, we are confident that a direct award path is absolutely required and appropriate to enable us to bring urgently needed enterprise cloud capabilities to the force,” Sherman said.

Our Standards: The Thomson Reuters Trust Principles.

DOD cancels "JEDI" cloud contract

WATE 6 On Your Side 08 July, 2021 - 09:35pm

Chart Of The Day: Amazon Stock Rally Makes Bezos Richer; New Records Ahead?

Investing.com 08 July, 2021 - 09:35pm

On Tuesday, the US Defense Department scuppered its JEDI cloud computing project, a $10 billion, Trump-administration agreement with Microsoft (NASDAQ:MSFT). Instead, the DoD announced, "a new contract expected to include its rival Amazon.com and possibly other cloud players."

Shares of Amazon (NASDAQ:AMZN) surged on the news. The e-tail giant's stock closed $164 higher, gaining 4.7%. Microsoft dropped as much as 1.2% on the news, but finished flat.

The original contract has been on hold since Amazon filed a lawsuit essentially claiming the award was a political move by then-President Donald Trump who exerted improper pressure on the military to steer the contract away from Amazon. The former president famously mocked the Seattle-based company and publicly skewered its CEO, Jeff Bezos repeatedly.

Along with providing added momentum to shares of Amazon, according to Bloomberg, yesterday's rally "raised Bezos’s fortune by $8.4 billion," making him the richest man in the world, now worth a record $211 billion. Nice 'revenge' for a man who had to endure years of Trump's derision.

As well, shares of AMZN hit a new record, for the first time since September, breaking out of a range it had been trapped in since then. Is the stock now setting up to hit even higher heights, potentially taking Bezos's level of wealth into the stratosphere?

Yesterday, the stock price blew past the top of the range in which it was trapped, partially fueled by a market spring-mechanism—the falling flag. Notice the sharp advance that preceded the flag, driven by inflation fears and a resurgence of the Delta variant around the world that put the pandemic market-darlings back in play.

That 11% jump prompted profit-taking, creating the dip. Howevere, heavy interest in the stock kept it tight, till the upside breakout signaled a resumption of the underlying uptrend, with a minimum of the same $350 move that created the flagpole, repeating from the point of breakout.

On top of that target, a range that is broken is expected to repeat the same height above the range as it had below its top. Finally, the longer the range the more impetus it would have, given the substantial investor interest in the stock that was moving the price amid the pattern.

Conservative traders should wait for a return move to retest the top of the range, if not the flag, before considering a long position.

Moderate traders would wait for the same dip, for the reduced exposure if not for confirmation of the renewed uptrend.

Aggressive traders could enter at will, provided they act according to a plan that justifies the risk. Here’s an example.

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Factbox-Six things to know about the Pentagon's defunct JEDI contract

Yahoo Finance 08 July, 2021 - 09:35pm

Here are six things to know about the now-defunct cloud computing contract.

The Joint Enterprise Defense Infrastructure (JEDI) was an IT modernization project to build a large, common commercial cloud for the Department of Defense. Data from many Pentagon programs remains isolated in separate systems that cannot easily share information such as targeting, or logistical data. Moving the Pentagon to the cloud is intended to make war-fighting easier and more seamless.

While the Trump administration wanted a single cloud-computing provider for the Department of Defense as laid out under JEDI, the Biden administration canceled it in favor of parceling out the project to multiple firms. Such a move would put the military more in line with private-sector companies, many of whom split up their cloud computing work among multiple vendors to avoid being locked in to any specific one.

WHAT WILL REPLACE THE JEDI CONTRACT?

The Pentagon hopes to have the first awards by April 2022 for its new Joint Warfighter Cloud Capability (JWCC), a multi-award, multi-vendor cloud contract for up to five years. Microsoft and Amazon will likely win direct awards.

WHAT OTHER COMPANIES COULD BENEFIT FROM THE NEW JWCC CONTRACT?

Other top cloud companies include Oracle Corp, Alphabet Inc's Google and IBM Corp. Google and IBM said they were both interested in working with the federal government but stopped short of saying whether they would bid. The Pentagon welcomed companies other than Microsoft and Amazon, adding they would need to meet unnamed requirements likely focused in part on data security.

WHAT ARE THE ISSUES SURROUNDING JEDI, AND MICROSOFT AND AMAZON?

Amazon Web Services, the biggest cloud computing provider, was widely expected to win the contract when it was first announced. But when the Pentagon awarded the sole-source deal to Microsoft in 2019, Amazon filed a lawsuit challenging the decision under then-President Donald Trump, alleging the former president exerted improper pressure on military officials to steer the contract away from Amazon.

WHAT WAS TRUMP'S ROLE IN THE JEDI CONTRACT AWARD?

Amazon said in 2019 the Pentagon decision was full of "egregious errors," which it suggested were a result of "improper pressure from Trump." Trump publicly derided then-Amazon CEO Jeff Bezos and repeatedly criticized the company. Amazon in its lawsuit cited a 2019 book that reported Trump had directed the Defense Department to "screw Amazon" out of the JEDI contract.

(Reporting by Chris Sanders in Washington; Editing by Matthew Lewis)

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Pentagon Scraps JEDI in Win for Amazon at Microsoft's Expense

Bangkok Post 08 July, 2021 - 09:35pm

Officials say they will renegotiate the massive contract with a multi-vendor approach

published : 8 Jul 2021 at 11:05

newspaper section: Business

writer: John D. McKinnon

Pentagon officials on Tuesday terminated the massive JEDI cloud-computing contract and said they would start fresh with a new project, capping a yearslong initiative that had become mired in litigation from Amazon.com Inc. and a barrage of objections from Congress.

In terminating the contract with Microsoft Corp., Department of Defense officials focused largely on technical reasons, saying advances in cloud computing and the Pentagon's own evolving needs had made the Joint Enterprise Defense Infrastructure scheme obsolete.

"The evolving landscape is what has driven our thinking," said John Sherman, the Pentagon's acting chief information officer. "JEDI was the right approach at the time," he added, but with changing circumstances "we're in a different place."

The decision will open up the new cloud project -- rebranded as Joint Warfighter Cloud Capability -- to all qualified bidders, Pentagon officials said.

In addition to Microsoft and Amazon, officials said qualified bidders could include Alphabet Inc.'s Google, Oracle Corp. and IBM Corp.

Bidders are expected to be identified by about October, the officials said, with the new contract expected to be awarded in spring 2022.

The new contract will run for no more than five years, the Pentagon said. Its value wasn't immediately determined, although officials said it would be worth billions of dollars.

Microsoft said it accepted the decision.

"The DoD faced a difficult choice: Continue with what could be a yearslong litigation battle or find another path forward," the company said in a posting on its blog.

"Because the security of the United States through the provision of critical technology upgrades is more important than any single contract, we respect and accept DoD's decision to move forward on a different path."

An Amazon spokesperson said the company supported the decision, saying "the contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement."

Amazon has contended in court that then-President Donald Trump exerted improper pressure on the Pentagon to keep the contract from going to Amazon because it was led by founder Jeff Bezos.

Mr. Trump has blamed Mr. Bezos for what he viewed as unfavorable coverage of his administration in The Washington Post, which Mr. Bezos bought in 2013 for $250 million.

The Post says its editorial decisions are independent.

At the time, the Trump White House referred questions to the Pentagon, which denied that Mr. Trump or administration officials had any impact on the selection process.

Pentagon officials said that Microsoft would have an opportunity to submit a termination proposal to recover some of its costs, but they could not estimate how much those would be, and Microsoft couldn't immediately provide an estimate.

A Pentagon fact sheet noted that Microsoft had been working on JEDI under a task order designed to meet the minimum guaranteed amount for the contract, which was $1 million.

The JEDI project was awarded to Microsoft, over the objections of Amazon, which had been favored to win the bidding.

The original contract, which has been valued at up to $10 billion over 10 years, was designed to allow the Pentagon to consolidate its current patchwork of data systems, give defense personnel better access to real-time information and put the Defense Department on a stronger footing to develop artificial-intelligence capabilities that are seen as vital in the future.

The rebooting of the JEDI project became increasingly likely after a federal judge in April refused the Pentagon's motion to dismiss much of Amazon's case, a decision that promised to extend the litigation for months or even years. A few days later, Deputy Defense Secretary Kathleen Hicks said the department would review the project.

Some lawmakers and government-contracting experts have long contended that JEDI's original single-vendor approach should be scuttled because it was inappropriate and outmoded for mammoth enterprises like the Department of Defense.

These people have said the Pentagon should move to an increasingly popular approach to enterprise cloud-computing that includes multiple companies as participants. "Spreading out the work also reduces the risk of legal challenges from excluded companies.''

Pentagon officials sought to play down the direct impact of the lengthy court battle on their decision to go with a multi-vendor approach. They said the litigation allowed time for the multi-vendor approach to show it would better meet the Pentagon's growing needs.

Before the latest court fight, Oracle -- one of the original bidders -- had sued to halt the contract awarding process. Its 2019 lawsuit claimed that an Amazon employee who worked for the Pentagon in 2016 and 2017 helped steer the procurement process to favor Amazon, which then hired him back.

A judge subsequently rejected those allegations, allowing the bidding process to move forward.

Amazon has maintained that it got no favorable treatment from the Pentagon at any point, but the issue resurfaced in May, with Sen. Mike Lee (R., Utah) and Rep. Ken Buck (R., Colo.) sending a letter requesting a Justice Department investigation into alleged conflicts by that employee and others.

Earlier this year, Sen. Chuck Grassley (R., Iowa) wrote a letter to Pentagon officials raising concerns about the agency's oversight of the project and seeking more details about alleged conflicts of interest and possible improprieties, which some critics and rival companies say might have skewed the initial procurement steps in Amazon's favor.

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A Pentagon inspector general report last year determined that the Pentagon adviser didn't violate any ethical obligations or give preferential treatment to Amazon.

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DoD sticks the (inevitable) fork in JEDI | Federal News Network

Federal News Network 07 July, 2021 - 09:31am

Hubbard Radio Washington DC, LLC. All rights reserved. This website is not intended for users located within the European Economic Area.

Only because I looked it up this morning, I now know the term “jedi” is an invention of the banal Star Wars movies. I’d thought the movie makers had borrowed the term from some ancient civilization, along the lines of “ninja.”

All the more reason the Defense Department was correct in canceling its tortured cloud computing contract.

I mean, what else were they going to do?

DoD planners faced two realities. First, the litigation from Amazon, which, if not exactly the 1996 Inslaw case (look it up, kids), was growing to absurd length and complexity, even by federal procurement dispute standards. That DoD would prevail was uncertain. Second, the Pentagon concluded that after four years of pursuing a single-award contract, a multi-cloud approach might in the end be the most advantageous for the department’s cloud computing needs.

        Insight by Recorded Future: Download the results of Federal News Network's exclusive survey of four agencies about their cyber threat detection habits.

Thank goodness they didn’t call the successor project JEDI II. Instead, we now have Joint Warfighter Cloud Capability (JWCC). Shelve those lightsabers.

In the long run it will be helpful to DoD to have a multi-award, indefinite-delivery, indefinite-quantity approach. Continuous competition will mean continuous improvement in both services and prices. Unlike having multiple vendors for something like an engine, multiple cloud vendors don’t entail sky-high lifecycle maintenance and repair costs, multiplied by the number of vendors.

DoD’s challenge now will be to determine who gets onto that IDIQ? Because it has specialized purpose in supporting command and control, JWCC won’t be a generalized vehicle for anyone that wants to tilt up a data center and call itself a commercial cloud. Federal News Network’s Jared Serbu reported officials hinted that the two contenders for JEDI — Microsoft and Amazon — would be part of JWCC. They reason, the same market research that justified their technical capabilities still applies. Still, they can’t taint the new procurement with the original sin of promising anyone will or won’t get a spot. JWCC planners will seek information from the other cloud majors: Google, IBM and Oracle.

An irony here is that by starting over, DoD won’t obtain the needed capabilities any sooner than it would have had it continued the JEDI slog. Therefore it was apparently the need for a new approach, rather than reluctance to keep litigating, that drove the decision.

I’ve got a feeling the decision to jettison JEDI came from the top. JEDI, whether justifiably or not, had the whiff of politics after Amazon accused Trump appointees deep in the Pentagon with having a bias against the company. Plus the simple fact of having dragged on for so long gave the project a shopworn appearance. Given all of this, maybe Defense Secretary Lloyd Austin said, “Folks, why don’t we just start over?”

Tom Temin is host of the Federal Drive and has been providing insight on federal technology and management issues for more than 30 years.

Follow @tteminWFED

Copyright 2021 Hubbard Radio Washington DC, LLC. All rights reserved. This website is not intended for users located within the European Economic Area.

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