Pentagon Cancels JEDI Cloud Contract Citing Litigation Complications and Delays

The federal government has quietly ended several legal disputes by cancelling the $10 billion U.S. Department of Defense (DOD) cloud computing contract that Microsoft won in 2019 from the and that Amazon and Oracle hotly contested. 

As explained by The New York Times in an article published on Tuesday, Amazon Web Services (AWS) challenged Microsoft’s victory, questioning the neutrality of the decision in federal court. The dispute stemmed from AWS’s contention that the award was swayed by political influence, and in particular, former President Trump’s publicly-known dislike for Amazon CEO Jeff Bezos, as The New York Times previously reported. Amazon filed a redacted amended complaint in that case last December.

As early as this January, the Pentagon hinted that it might cancel the deal, citing the litigation and related delays, The New York Times noted. The article said that the DOD instituted a review shortly after President Biden took office that “quickly concluded that the costly arguments over JEDI had been so lengthy that the system would be outdated as soon as it was deployed.”  

For its part, the DOD said that the JEDI Cloud contract no longer meets its needs due to “evolving requirements, increased cloud conversancy, and industry advances,” according to a press release issued on Tuesday. 

Now, the Department has announced new cloud efforts with its Joint Warfighter Cloud Capability (JWCC), a multi-cloud/multi-vendor contract. According to the Department’s press release, it will solicit bids from limited sources, namely Microsoft and AWS, “as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the Department’s requirements.”

The JEDI Cloud contract’s single-vendor structure was partly the subject of Oracle’s lawsuit against the DOD, wherein last week Oracle filed a final reply brief in support of its petition for a writ of certiorari. Oracle’s case, which was unsuccessfully appealed several times by the plaintiff, not only contested the single vendor structure, but also alleged that DOD employees’ bias tainted the bidding process.