US Department of Defense cancels controversial $10bn JEDI contract

The US Department of Defense (DoD) has cancelled a $10bn cloud services contract that was at the centre of a legal battle between Microsoft and Amazon Web Services (AWS).

The 10-year planned public cloud-focused project contract, known as the Joint Enterprise Defence Infrastructure (JEDI), will be replaced by a multi-supplier contract expected to include AWS.

JEDI was geared towards supporting the DoD in its push to create a general-purpose public cloud environment and consolidate its datacentres, Following its cancellation, the DoD said: “Due to evolving requirements, increased cloud conservancy, and industry advances, the JEDI Cloud contract no longer meets its needs.”

John Sherman, acting CIO at the DoD, expects both Microsoft and Amazon to get cloud contracts. He said the need was urgent, adding: “I’ve got to get this now – as soon as possible – starting hopefully as soon as April.”

In terms of the cost of the new contract, Sherman said: “We don’t have an estimate yet, but I wouldn’t latch on to the $10bn figure. This plan involves a multicloud 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,” he added.

The DoD appointed Microsoft in October 2019, but AWS has repeatedly gone on record to claim the decision to award the contract to Microsoft had been subject to “political interference” from former US president Donald Trump. It also argued that its public cloud services portfolio is technologically superior.

The DoD re-evaluated the contract with Microsoft in September 2020, after which it confirmed that Microsoft’s proposal continued “to represent the best value to the government” and, therefore, its contract award should still stand.

AWS then set out its intention to continue campaigning for a “fair, objective and impartial” review of the contract.

At the time, AWS said it “strongly disagrees” with the DoD’s “flawed evaluation”, and claimed the DoD’s attempt at “corrective action” achieved nothing but to “waste five months” that could have been better spent getting to the bottom of the “serious concerns” raised to date about how the contract was awarded.

In April this year, the US Court of Federal Claims issued a sealed decision that denied motions filed by the US Department of Justice and Microsoft that requested AWS’s allegations about the Trump administration’s interference in JEDI contract award be dismissed.

After this decision AWS said: “The record of improper influence by former president Trump is disturbing, and we are pleased the court will review the remarkable impact it had on the JEDI contract award.”

Microsoft’s corporate vice-president of communications, Frank X. Shaw, issued a response on behalf of the tech giant that sought to play down the significance of the court’s decision.

“This procedural ruling changes little. Not once, but twice, professional procurement staff at the DoD chose Microsoft after a thorough review. Many other large and sophisticated customers make the same choice every week,” said Shaw.