The Defense Department has doubled down on a decision to turn to just one cloud-computing provider for one of its biggest IT contracts in years, offering a rebuke to some in industry who fear this approach will give one company too much influence over the government’s information systems.
Late last month, the Defense Department released a long-awaited request for proposals for what it is calling the Joint Enterprise Defense Infrastructure (JEDI), in which it specified that the contract would have a ceiling of $10 billion over the course of a decade, an opportunity that officials have indicated would account for about 16 percent of the department’s overall cloud migration work. The Defense Department also indicated it would use just one company for the contract — a decision that has sparked sharp divisions among the handful of firms vying for the contract.
The massive scale of the contract has attracted interest from old-guard beltway contractors as well as West Coast technology giants. Microsoft, Amazon, Google, Oracle, IBM and General Dynamics have expressed interest.
Even before the Pentagon spelled out exactly what it was seeking, the competition was fierce and unusually public. For months, government officials heading to work through the Pentagon Metro station have been greeted with a deluge of advertisements from Amazon and Microsoft touting their cloud-computing capabilities.
Amazon Web Services, the cloud-computing unit of Amazon.com, is seen as a front-runner because of its work with the CIA under an earlier, $600 million contract, something that has given it years of expertise in handling classified data. (Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.)
Microsoft has emphasized ways in which its advanced artificial intelligence capabilities can enable next-generation military capabilities, and IBM is hoping to leverage its decades of experience working with government computer systems. General Dynamics is likely to benefit from its March acquisition of CSRA, a large government IT contractor that oversees the Defense Department’s MilCloud 2.0 program, an earlier cloud-computing effort.
The Pentagon has emphasized it will ultimately rely on multiple clouds for its IT capabilities even as it picks a single company for the $10 billion JEDI contract.
“With the diversity of DoD’s mission, DoD will always have a multiple cloud environment, but we need to do better in applying an enterprise approach to that environment,” Defense Department Chief Information Officer Dana Deasy wrote in a July 26 letter. “To successfully accomplish this, we are looking for an industry partner who will learn with us and help us find the best ways to bring foundational commercial capabilities to our warfighters.”
The decision to go to a single provider for the JEDI contract was lauded by Amazon and scorned by its competitors.
Microsoft, Oracle and IBM in particular have openly criticized the government’s decision to use a provider. They say handing so much of the Pentagon’s computing capabilities to a single company ultimately will cause the government to miss out on innovations at other companies.
“Locking the Pentagon into a proprietary, sole-sourced cloud environment would eliminate the cost benefits of vendor competition and wall off the U.S. military from new cloud-based innovations in areas such as data security and advanced analytics where other providers are investing heavily,” Sam Gordy, general manager of IBM U.S. Federal, told The Post late last year.
The company changed its tone, however, once the Pentagon made clear it had made a final decision to go to one provider.
“Throughout the JEDI procurement process, we’ve attempted to share best practices based on IBM’s extensive cloud engagements with clients worldwide,” an IBM spokeswoman said in an email Friday. “The time for debate, though, has passed. We will submit a competitive bid. IBM appreciates and respects the Pentagon’s need to move forward in the way it feels is in the best interests of our armed forces.”
Amazon has argued that hiring a single company for the contractwill allow the government to move quickly.
“If you don’t have good experience and a workforce that understands cloud, it’s going to be really hard to try to absorb multiple clouds and create multiple architectures,” said Teresa Carlson, Amazon’s vice president for worldwide public sector. “Multi-cloud doesn’t mean moving faster and greater innovation, because if you’re trying to figure out what you’re going to put where and create things, and if they don’t have the experience of doing it, it’s really going to slow them down.”
Rivals have fretted for months that Amazon might have an inside track to the multibillion-dollar contract.
The Defense Department added fuel to those fears in early February when it awarded a contract with a $950 million ceiling to REAN Cloud, a Herndon, Va.-based small business that specializes in migrating old computer networks to modern, cloud-based systems.
The award was initially met with consternation, not just for its size but because it was issued under what is known as an “other transactional authority,” which allows agencies to buy goods and services quickly without going through the extensive and bureaucratic federal acquisition process.
REAN Cloud’s close relationship with Amazon also raised eyebrows: At the time of the award, the company advertised itself as an Amazon Web Services partner, and Amazon’s rivals may have noted that nearly all of the firm’s federal work at the time had involved Amazon. REAN Cloud founder Sekhar Puli said at the time that there was “little to no truth” to the perception that the award was “an Amazon contract,” arguing that his company would work with whatever cloud provider the government selected.
Amazon’s rivals were not convinced. Oracle, which competes for government work in the software space, filed a bid protest with the Government Accountability Office in which it called the contract an “egregious abuse” of the procurement process, and accused REAN Cloud of being “a front for AWS.”
The Defense Department responded by abruptly slashing the contract award from almost $1 billion to no more than $65 million and dramatically limiting the scope of work. The GAO later sided with Oracle, ruling in June that the Pentagon “did not properly exercise authority granted to it” when it awarded the contract.
Some are worried that Defense Department missteps could become fodder for bid protests.
“I predict that [the JEDI contract award] will be protested aggressively based on a number of clear mistakes from the officials running it,” said John Weiler, executive director of the IT Acquisition Advisory Council, a business association that includes companies hoping to bid on the contract. “They have already demonstrated that they are not interested in full and open competition. I guarantee you this will be challenged in a court of law.”