AWS, Microsoft are Final JEDI Competitors
Amazon Web Services and Microsoft will compete for a massive Defense Department cloud contract after a Pentagon probe dismissed protesters’ conflict-of-interest allegations.
The decision first reported by Bloomberg effectively eliminates protesters IBM and Oracle from competing for the $10 billion winner-take-all JEDI cloud contract. DoD confirmed on Wednesday (April 10) that AWS and Microsoft were the only bidders meeting “minimum requirements” for JEDI, which stands for Joint Enterprise Defense Infrastructure.
Bloomberg also reported that alleged unethical conduct by a former Defense Department employee with ties to AWS would be referred to the Pentagon’s inspector general.
Nevertheless, the decision is a blow to IBM (NYSE: IBM) and Oracle (NYSE: ORCL), which had been lobbying and—in Oracle’s case—litigating to break up the huge DoD contract. With protesters assuming AWS (NASDAQ: AMZN) has the inside track to win the JEDI contract, Oracle raised the stakes in December with a federal lawsuit asserting DoD’s plan for a single-source award violates U.S. acquisition regulations.
IBM has also protested the single-source contact award, arguing that “JEDI’s primary flaw lies in mandating a single cloud environment for up to 10 years.”
Oracle’s lawsuit also disclosed alleged conflicts of interest by a JEDI program manager identified as “Deep Ubhi.” The filing asserted the program manager identified only by the user name of his Slack account previously worked for AWS and had vigorously promoted DoD’s single-source approach to the JEDI contract.
This week’s DoD ruling solidifies Amazon’s pole position to win the JEDI contract, largely on the strength of cloud infrastructure it provides to U.S. intelligence agencies. In 2013, the CIA handed AWS a $600 million contract to provide for private cloud capabilities known as C2S, or Commercial Cloud Services. U.S. intelligence agencies will reportedly seek multiple vendors for an expanded service dubbed IC Commercial Cloud Enterprise.
AWS and Microsoft (NASDAQ: MSFT) have also both obtained high-level security certifications for providing government cloud services.
Meanwhile, Oracle’s lawsuit and the ensuing DoD ethics probe have further delayed the JEDI contract award. The U.S. Court of Federal Claims in Washington issued a stay order in the Oracle case while DoD conducted its ethics investigation. The website FCW reported defense officials will now seek to lift the stay order, clearing the way to select a single cloud contractor.
The legal maneuvering is expected to delay a JEDI contract award to no sooner than July, FCW disclosed.