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Pentagon cancels $10B cloud contract given to Microsoft over Amazon

The department announced Tuesday that it is canceling the Joint Enterprise Defense Infrastructure (JEDI) contract that was previously awarded to Microsoft. It will instead seek new solicitations for an updated Joint Warfighting Cloud Capability (JWCC) contract from Amazon and Microsoft.
The JEDI contract would have resulted in Microsoft building a cloud storage system for sensitive military data and technology, such as artificial intelligence, for the Department of Defense and could have resulted in revenue of up to $10 billion over 10 years.
Microsoft winning the JEDI contract in 2019 over Amazon caused some controversy, surprising many industry experts who saw Amazon as the stronger candidate to win the contract. Amazon Web Services is widely viewed as the market leader in the cloud computing industry.
Pentagon watchdog finds Defense Department behaved appropriately but doesn't rule on White House influence over controversial cloud contractPentagon watchdog finds Defense Department behaved appropriately but doesn't rule on White House influence over controversial cloud contract
Amazon filed a suit with the US Court of Federal Claims contesting the decision, arguing that it was politically motivated by President Donald Trump’s dislike of then Amazon CEO Jeff Bezos and the Washington Post, which Bezos owns.
In March 2020, the department said it wished to re-evaluate its decision to award the contract to Microsoft. Now, the Defense Department plans to cancel it altogether and solicit bids for a new, updated contract from both Microsoft and Amazon.
The Defense Department said it decided to cancel the contract “due to evolving requirements, increased cloud conservancy and industry advances,” in a press release. Because of this, the JEDI contract “no longer meets its needs,” the release states.
The department will solicit proposals from Microsoft and Amazon Web Services and will also accept proposals from other Cloud Service Providers that “can also meet the DoD’s requirements,” the release said.
In a blog post Tuesday, Microsoft said it understands the DoD’s rationale for canceling the contract and defended its technology as being best suited for the job.
“The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward. 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,” the post said.
“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,” the statement adds.
Amazon did not immediately respond to a request for comment.
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