On Friday morning, Defense Department Chief Information Officer Dana Deasy, a former JP Morgan executive, was joined by Lt. Gen. John “Jack” Shanahan, who leads the Pentagon’s new Joint Artificial Intelligence Center. Deasy insisted the president is playing no role in selecting which company wins the contract. He said the long-awaited contract would not be awarded until Esper has had enough time to make a decision, and that they had scheduled educational sessions in the coming weeks to fully brief him on the matter.
And they made a strong case for why the Defense Department needs to move forward with the “enterprise cloud” as soon as possible, alluding to a not-so-distant future in which robots and algorithms could define how wars are fought and won. In a possible reaction to the president’s interest, China was at the center of their pitch.
“We don’t want to waste any time moving forward, because our adversaries are moving ahead at their own pace, whether it’s with Alibaba, Baidu or Tencent,” Shanahan said, referring to China’s big tech companies. “With the level of investment and the amount of people [China] is throwing at the problem, they are moving forward at a very rapid pace.”
The contract, called the Joint Enterprise Defense Infrastructure or ‘JEDI’ has attracted intense interest from four of America’s tech giants: Amazon, Microsoft, Oracle and IBM. The opportunity could be worth up to $10 billion over a 10-year period, giving the winner tremendous influence moving forward. Defense Department officials have insisted on the need to give the contract to only one provider and have thrown out initial bids from Oracle and IBM.
DOD also hopes the project will bring order to a sprawling worldwide information network in which sensitive intelligence is stored in hundreds of mainframes and smaller clouds, often walled off from deployed troops who could use that information.
“We have a bunch of siloed solutions we have built. We work with a lot of vendors currently, but we have never stepped back and tried to create an enterprise cloud,” Deasy said.
Deasy said there has been “no pause” in the work of evaluating the two remaining proposals, a highly technical process that is expected to conclude in “a number of weeks.” Esper’s JEDI review is part of a parallel process, Deasy said. He said there will be no contract award until Esper’s review is complete, and declined to estimate when it might conclude.
Oracle and IBM have sharply criticized the Pentagon’s winner-take-all strategy for JEDI, arguing that approach will hamper innovation. They have charged that the process is rigged in favor of Amazon Web Services and have unsuccessfully sued to block the award.
Amazon executives have praised the single-award approach, arguing that such an approach will allow the Defense Department to move more quickly with its limited tech workforce. (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
For 18 months, that dispute played out mostly in closed-door hearings at the Government Accountability Office and Court of Federal Claims, which handle disputes over federal money. But in recent weeks the contract has seen a level of political scrutiny that is exceedingly rare for procurement matters.
Trump recently asked Esper, during his first days on the job, to reexamine the process because of concerns the contract would go to Amazon. Esper said in an interview last week he was “taking a hard look” at the contract and confirmed that he had heard from the administration as well as lawmakers from both parties.
In response to a Washington Post article detailing the president’s intervention, Sens. Mark R. Warner (D-Va.) and Jack Reed (D-R.I.) wrote to Esper, expressing concerns Trump may have acted inappropriately.
“The integrity of our federal procurement process rests in large part on its insulation from undue political influence, so that sound technical and business judgments can be used to make data- and evidence-based decisions,” the two senators wrote, adding, “The importance of political noninterference is especially important in the context of Department of Defense.”
The senators’ letter notes that DOD contracts “must focus on cost, quality, performance and other considerations directly related to promoting our national security in an increasingly complex global environment.”
A Defense Department spokeswoman said Esper’s office had received the letter and would respond directly to its authors.
Others have weighed in against the award.
On July 11, Sen. Marco Rubio (R-Fla.), whose political action committee has received donations from Oracle founder Larry Ellison, criticized the Defense Department’s approach in a letter to national security adviser John Bolton. In it, Rubio said the JEDI cloud competition “suffers from a lack of competition,” and is based on “arbitrary” criteria and standards for bidders.
The Defense Department “used the arbitrary criteria to eliminate two of the bidders, IBM and Oracle, leaving only Amazon and Microsoft,” Rubio wrote.
A Rubio spokesman said the letter made it to Trump, who subsequently called Rubio on July 12, and the two discussed the JEDI contract. Rubio later wrote a separate, related letter to Esper. In response, Esper’s office “let us know they were going to initiate a review of the contract,” the Rubio spokesman said.
Also on Monday, Sen. Ron Wyden (D-Ore.) indirectly addressed Amazon’s national security-related business in a letter to Bezos. In it, Wyden expressed concerns that the default configuration settings on certain Amazon Web Services cloud products may have contributed to a costly hack of customer data stored by Capital One.
“If Amazon’s cloud computing services are found to be the common element in a series of high-profile hacks targeting large corporations, it would raise serious questions about whether other corporations and government entities that use Amazon’s cloud computing products are also vulnerable,” Wyden wrote.
An Amazon spokesman did not respond to a request for comment on Wyden’s letter.