The Department of Defense (DOD) announced Tuesday it had canceled its multi-billion contract for the Joint Enterprise Defense Infrastructure (JEDI) Cloud with Microsoft and has begun contract termination procedures.
“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 DOD said in a statement.
The contract was expected to have been worth up to $10 billion, and had set up fierce competition and legal challenges between Amazon, Microsoft, and other potential cloud services providers. The contract was awarded to Microsoft in October 2019. Amazon sued on the basis that the award was influenced by then-President Donald Trump’s dislike of Amazon and CEO Jeff Bezos.
The DOD also announced Tuesday that it would seek proposals for a new contract due to the need for cloud capability.
The DOD said in the statement:
The Department continues to have unmet cloud capability gaps for enterprise-wide, commercial cloud services at all three classification levels that work at the tactical edge, at scale — these needs have only advanced in recent years with efforts such as Joint All Domain Command and Control (JADC2) and the Artificial Intelligence and Data Acceleration (ADA) initiative.
The new project will be called the Joint Warfighter Cloud Capability (JWCC), and will be a “multi-cloud/multi-vendor” Indefinite Delivery-Indefinite Quantity (IDIQ) contract.
The department said it would seek proposals from a “limited number” of sources — namely only Microsoft and Amazon:
The Department intends to seek proposals from a limited number of sources, namely the Microsoft Corporation (Microsoft) and Amazon Web Services (AWS), as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the Department’s requirements.
However, as noted in its Pre-Solicitation Notice, the Department will immediately engage with industry and continue its market research to determine whether any other U.S.-based hyperscale CSPs can also meet the DoD’s requirements. If so, those Department will also negotiate with those companies.