DOD cancels $10B JEDI contract

The Pentagon announced Tuesday it has canceled the $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud procurement, nearly two years after awarding the contract to Microsoft.

In a release, the Department of Defense said it has “initiated contract termination procedures” for the JEDI contract and is planning to replace it with a new contract that better fits the department’s cloud needs today. “The Department has determined that, due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs,” it said.

The move comes after the department has been hinting for months that it might have to move in a different direction than planned with JEDI if the contract continued to be held up in court. Amazon has protested the award of JEDI to Microsoft since late 2019.

Acting DOD CIO John Sherman told reporters Tuesday that while JEDI was conceived in 2017 with “noble intent,” it was “developed at a time when the department’s needs were different and our cloud conversancy less mature.”

Microsoft said in a blog post after DOD’s announcement that it will “respect and accept” the decision. As the department finalizes termination of the contract, it may owe Microsoft some money under the initial task order it awarded.

With the cancellation of the JEDI procurement, Amazon’s protest of the contract in the Court of Federal Claims will soon follow suit. In a statement, the company maintained its belief that political interference led to Microsoft’s win, an allegation that was never ruled upon but at least held enough water for the court to decide to continue hearing the case earlier this year.

“We understand and agree with the DoD’s decision,” said a company spokesperson. “Unfortunately, the contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement. Our commitment to supporting our nation’s military and ensuring that our warfighters and defense partners have access to the best technology at the best price is stronger than ever. We look forward to continuing to support the DoD’s modernization efforts and building solutions that help accomplish their critical missions.”

Goodbye JEDI, hello JWCC

Now the DOD is headed in a new direction with its enterprise cloud effort, launching the Joint Warfighter Cloud Capability (JWCC) — a multi-billion-dollar, multi-cloud, multi-vendor contract. The department intends to solicit proposals from at least Microsoft and Amazon Web Services through the contract “as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the Department’s requirements,” the release states.

The department will also engage industry more broadly over the next several months in its procurement process to “determine whether any other U.S.-based hyperscale CSPs can also meet the DoD’s requirements,” the release says. “If so, the Department will also negotiate with those companies.”

The initial plan is to make awards to vendors around April 2022.

Sherman said he had plans to immediately contact other top cloud providers IBM, Google and Oracle to see where they could potentially fit into the department’s plans.

The DOD has a variety of existing vehicles to work with each of these cloud providers in place, like milCloud 2.0 and others, but Sherman said there’s “nothing to the extent and reach that the enterprise capability we’re seeking to acquire from this will provide through JWCC — truly from the headquarters to the tactical edge in all three security levels at scale.”

As the DOD launches into the new JWCC procurement effort, it’s shying away from getting too caught up on a specific price tag, at least from the start. Sherman said it will be in the billions but a specific figure will be decided upon later, referencing how much of the discourse around JEDI was fixated on its $10 billion ceiling. The new contract is also noticeably shorter than JEDI at five years total — a three-year base with two one-year options.

While the continued protests of JEDI undoubtedly impacted DOD’s decision to cancel it, Sherman said even if it had gone into operation as intended after award, “we would have been having this multi-cloud discussion right about now anyway” due to the evolving needs of the department.

He added that he wouldn’t call JEDI “in any way a mistake.”

“We’re now in 2021, not in 2018, and the factors surrounding all this have evolved and so must we in our approach,” Sherman said, pointing to needed support to enable Joint All-Domain Command and Control and the department’s new Artificial Intelligence and Data Accelerator initiative. He later added: “The landscape has continued to shift during the timeframe, both on the private sector side with the cloud service providers, as well as how our users have become more conversant on some of the cloud capabilities.”

Sherman said that every day that DOD goes without this enterprise cloud capability is a wasted opportunity, or “day too long.”

“If we’re talking about body armor, other protective gear, hypersonic weapons or whatever we need to win our future fight, so goes it for JWCC,” he said, equating them in importance to the larger warfighting mission of the department.