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DOD continues fight for JEDI contract but will pursue other cloud deals

The Pentagon is planning to continue the court battle over the U.S. Defense Department's long-delayed $10 billion Joint Enterprise Defense Infrastructure, or JEDI, cloud-computing contract, a move that surprised defense experts after defense chiefs earlier signaled a potential change of direction.

While many expected the DOD to pivot towards a multi-vendor approach, court documents filed May 28 indicated that department chiefs plan to continue to defend the JEDI contract award. The contract has been mired in litigation since 2019 when Amazon Web Services Inc. filed a lawsuit that alleged the bid process that awarded the contract to Microsoft Corp. was tainted by undue political influence. The DOD repeatedly contested those allegations.

"Nothing about this procedural filing changes our previous statements regarding our commitment to establish an enterprise cloud for the Department — we hope through JEDI — but the DOD's requirements transcend any one procurement," said Pentagon spokesman Russell Goemaere in a statement to S&P Global Market Intelligence. Goemaere noted that in addition to JEDI, there are 13 special purpose cloud acquisition efforts underway.

Despite the court battle, the department will certainly move forward with other cloud initiatives to update its aging infrastructure, while Amazon and Microsoft will continue work on other government projects, said Michael Hettinger, founding principal of the Hettinger Strategy Group, a government relations and federal market advisory firm. The Pentagon's missions require multiple clouds from multiple vendors, and the JEDI cloud contract is just one of those efforts, Hettinger said.

"At the end of the day, they are going to move on," Hettinger said. "There's cloud deployments that need to take place and things that need to be upgraded and modernized."

Microsoft declined to comment for this story, and AWS did not return inquiries. Both are fighting for the lucrative JEDI contract as they grow their market share. AWS is considered the market leader in cloud computing, although Microsoft's cloud unit reports more in quarterly revenues due to its inclusion of server products in its Intelligence Cloud division.

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The JEDI contract, which would put a single cloud service provider in charge of remotely hosting and distributing information to warfighters, was first conceived in 2017 and designed to help accelerate the DOD's adoption of cloud infrastructure and services.

The Pentagon's decision to continue litigation related to JEDI came as a shock to some in the defense industry who said it unnecessarily prolongs an already long-delayed digital transformation for the Pentagon that is badly needed in a time of increasing cyberthreats. However, the court battle does not preclude the DOD from moving forward with other contracts, they noted.

John Weiler, executive director of the IT Acquisition Advisory Council, a public-private partnership that advises government agencies on making sound acquisition decisions and industry players on commercial best practices, estimated that the DOD could turn around a new multi-cloud contract within four months based on the success of the Central Intelligence Agency's C2E Commercial Cloud Enterprise contract to AWS, Microsoft, Google LLC, Oracle Corp., and International Business Machines Corp.

Marv Langston, a former DOD Deputy Chief Information Officer and now a consultant for the U.S. Navy, noted that the cloud market has evolved since JEDI was first conceived and suggested that the Pentagon would be better served by multiple contractors. "You would get some competitive pressure between them," Langston said.