Pentagon scales back massive cloud contract by more than 90 percent

The department plans to narrow the scope of the five-year contract, originally worth $950 million, to just $65 million — a drawback of more than 90 percent.
Department of Defense, DOD, Pentagon
(DoD photo by Army Sgt. Amber I. Smith)

The Pentagon last month awarded a nearly $1 billion contract to REAN Cloud LLC for streamlined cloud migration services, but now it’s decided to step that decision back quite a bit.

Defense Department spokesperson Army Col. Robert Manning told reporters Monday that the department plans to narrow the scope of the five-year contract, originally worth $950 million, to just $65 million — a drawback of more than 90 percent.

The contract is based on a prototype REAN launched last year with the U.S. Transportation Command, helping migrate dozens of its legacy applications to the cloud. The Defense Innovation Unit-Experimental led the procurement effort using what’s known as a “production other transaction” contract to prototype and develop a solution that best fits DOD’s unique cloud needs.

“After reviewing the production agreement recently awarded to Rean Cloud LLC, the Department has determined that the agreement should be more narrowly tailored to the original scope of the prototype agreement, which was limited to United States Transportation Command applications,” Manning said. Under the original, larger scope of the contract, the intent was to offer REAN’s services departmentwide. The smaller contract would contain REAN’s work to Transportation Command.


The move comes particularly after Oracle filed a protest in late February, questioning REAN’s connection to Amazon Web Services and the seeming hush-hush nature of the procurement. The Government Accountability Office hasn’t yet decided on the protest and has until May 31 to do so. REAN Cloud is a so-called Amazon Web Services Premier Partner, specializing in migrating legacy systems to the AWS, though the company said it’s able to work with other providers as well.

The Pentagon is at the center of several ongoing and different major cloud procurement efforts. Monday, DOD granted CSRA provisional authority to host impact level 5 data — the most sensitive unclassified data the department has — through milCloud 2.0.  And Wednesday, the department will host a highly anticipated industry day to discuss the future of its commercial cloud strategy and the Joint Enterprise Defense Infrastructure.

Billy Mitchell

Written by Billy Mitchell

Billy Mitchell is Senior Vice President and Executive Editor of Scoop News Group's editorial brands. He oversees operations, strategy and growth of SNG's award-winning tech publications, FedScoop, StateScoop, CyberScoop, EdScoop and DefenseScoop. After earning his journalism degree at Virginia Tech and winning the school's Excellence in Print Journalism award, Billy received his master's degree from New York University in magazine writing while interning at publications like Rolling Stone.

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