Amazon and Microsoft could now share $10bn JEDI cloud contract

US Army Military War Shared work?

The US Department of Defense could make a complete U-turn and allow more than one company to share the spoils, after legal action.

The US Defense Department has offered to reconsider its $10bn cloud contract award to Microsoft to pause Amazon Web Services legal action against it. AWS insists the DoD was wrong to give the work to Microsoft and that the decision was affected by US president Trump’s public antagonism towards Amazon CEO Jeff Bezos.

The judge in the case had already confirmed that AWS’ legal case had some merit in regards to technical aspects of the award, and prevented any work being done on the contract by Microsoft while the legal case was live.

AWS has insisted that its cloud capabilities are superior to Microsoft’s for JEDI, although Microsoft has been investing heavily in the governmental cloud arena over the last year or so.

DoD attorneys have now asked the judge to pause Amazon’s legal case and remand the case back to DoD procurement officials for the next four months, to allow them to take another look at how the award was made in response to contract points AWS and the judge have highlighted in the case so far.

The focus is mainly on the “Price scenario 6” section of the contract, with the DoD planning to ask both Amazon and Microsoft to resubmit “limited” revisions to their original bids for the work. While the DoD had originally maintained it was essential that a single supplier should be awarded the work on security grounds, there is now speculation that both companies could win chunks of the $10bn contract.

The judge however still has to officially decide whether to allow the DoD’s request, although Microsoft has not opposed it and AWS says it is “pleased that the DoD has acknowledged ‘substantial and legitimate’ issues that affected the JEDI award decision” and that “corrective action is necessary”.

Under Price scenario 6, the DoD asked vendors how they would handle data storage as part of JEDI. The judge found that the DoD had allowed Microsoft to offer a solution that shouldn’t have been allowed under the JEDI solicitation’s terms.

Microsoft’s storage proposal was redacted from court filings. But the judge found it did not comply with the DoD’s published contract needs around an online cloud data warehouse that was “highly accessible” and “without human intervention”.

The judge’s stance suggested Microsoft was able to bid at a lower price because it had proposed a “non-compliant” solution.

That said, the DOD, in its legal filing, also confirmed it will look again at other areas of the contract award in how both companies said they would address certain JEDI requirements.

The DoD said: “During the proposed remand, the agency potentially could make decisions that would moot this action, in whole or in part, and may obviate the need for further litigation in this court.”