Pentagon cancels $10 billion cloud contract awarded to Microsoft at Amazon

The department announced on Tuesday that it was canceling the joint venture defense infrastructure (JEDI) contract that was previously awarded to Microsoft. Instead it will seek fresh requests for an updated Joint Warfighting Cloud Capability (JWCC) contract from Amazon and Microsoft.

The JEDI contract could result in Microsoft building cloud storage systems for sensitive military data and technology, such as artificial intelligence, for the Department of Defense and could result in up to $10 billion in revenue over 10 years.

Microsoft caused some controversy when it won the JEDI contract at Amazon in 2019, which surprised many industry experts, who saw Amazon as the strongest candidate to win the contract. Amazon Web Services is widely viewed as the market leader in the cloud computing industry.

Amazon filed a lawsuit with the US Court of Federal Claims opposing the decision, arguing that it was politically motivated by former President Donald Trump’s dislike of then-Amazon CEO Jeff Bezos, and the Washington Post, which is also known for Bezos’s dislike. are the owners.

In March 2020, The department said it wants to re-evaluate its decision To award the contract to Microsoft. Now, the Defense Department plans to scrap it altogether and has sought bids from both Microsoft and Amazon for a new, updated contract.

The Defense Department said it made the decision to cancel the contract “due to evolving requirements, increased cloud protection and industry advancements” in a press release. Because of this, the JEDI contract “no longer meets its requirements,” the release said.

The department will seek proposals from Microsoft and Amazon Web Services and will also accept proposals from other cloud service providers that “may also meet DoD’s requirements,” the release said.

In a blog post on Tuesday, Microsoft said it understood DoD’s reasoning for voiding the contract and defended its technology as being best suited for the job.

“DoD was faced with a difficult choice: continue with a year-long litigation battle or find another way forward. The security of the United States is more important than any contract, and we know Microsoft will do well when the nation does well.” Post said.

“Since the security of the United States through the provision of critical technology upgrades is more important that any single contract, we respect and accept the DoD’s decision to proceed on a different path to secure mission-critical technology.” do,” the statement said.

Amazon did not immediately respond to a request for comment.

Amazon was widely considered the frontrunner to win the Pentagon contract before Trump vowed to take “a strong look” at the deal.

As part of its lawsuit filed with the US Court of Federal Claims Opposing the decision, Amazon accused Trump of launching “repeated public and behind-the-scenes attacks” against the company in a formal protest.

In that court battle, Amazon Trump sought permission to testify And former Defense Secretary Mark Esper went on to bolster his claim that the Cloud contract has been lost due to political interference.

In a statement in February, Amazon said, “President Trump has exercised his desire to use his position as president and commander in chief to interfere with government actions — including federal procurement — to advance his personal agenda.” performed over and over again.” “The question is whether the President of the United States should be allowed to use the DoD’s budget to meet his personal and political objectives.”

CNN’s Claire Duffy contributed to this report.

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