AWS, Microsoft Will Compete For $10B JEDI Contract, Pentagon Says

The Pentagon has short-listed the two leading cloud providers as the finalists to implement its winner-take-all $10 billion cloud computing transformation after finding potential ethical conflicts did not adversely impact the integrity of the bidding process.

Potential conflicts did not impact the integrity of the military's process in selecting an enterprise cloud computing provider, the Pentagon said Wednesday, and the Joint Enterprise Defense Infrastructure (JEDI) contract will be awarded to either Amazon Web Services or Microsoft.

AWS and Microsoft, the first and second largest enterprise cloud providers, respectively, were the only two bidders in the $10 billion sweepstakes that met the military's "competitive range determination" to proceed in the process, said Elissa Smith, a spokeswoman for the U.S. Department of Defense.

That final decision, which could be made later this month, eliminates from the running Oracle and IBM, both of which have officially protested the procurement process through the Government Accountability Office. Oracle followed that challenge with a lawsuit against the federal government.

[Related: 10 Things You Should Know About The DoD Cloud Strategy]

An AWS spokesperson declined to comment and a spokesperson for Microsoft said that “as this is an active RFP, we have nothing to share at this time.” Oracle, through a spokesperson, declined to comment. CRN has reached out to IBM for comment.

A Defense Department Inspector General's investigation is still probing "potential ethical violations" surrounding two former Amazon employees who were involved in the military's vendor selection process, Smith said.

But "the investigation determined that there are no conflicts of interest that affected the integrity of the acquisition process," she said.

In March, the FBI's Public Corruption Squad became involved in that probe.

Oracle and other name-brand technology vendors have repeatedly claimed the winner-take-all nature of the award and criteria by which a vendor will be selected violate industry best practices and were geared to deliver the entirety of the contract to Amazon Web Services.

A federal judge issued a stay in Oracle's lawsuit contesting the JEDI bidding process, citing potentially new information emerging around possible conflicts of interest. Oracle had previously argued JEDI was rife with conflicts of interest between the Pentagon and AWS.

In legal filings, Oracle questioned the "propriety" of the procurement process after obtaining communications in which an official called colleagues voicing support for AWS rivals "dum dums."

The Redwood City, Calif., tech giant alleged that two people who helped lead the JEDI initiative– Deap Ubhi, who served as JEDI project manager at the DoD, and Anthony DeMartino, chief of staff for the Deputy Secretary of Defense – were conflicted because of their relationship with Amazon Web Services.

Ubhi, the lawsuit states, worked at AWS until joining the Defense Digital Service in the summer of 2016. He returned to AWS as general manager in November 2017.

DeMartino, chief of staff for the Deputy Secretary of Defense, was a consultant for AWS before being tapped by the DoD.

The United States military is embarking on an ambitious and expensive cloud transformation project to modernize IT resources across all the Pentagon's departments and branches of the armed services.

The JEDI initiative is one component of that plan, but it has created a firestorm of controversy in Silicon Valley, including criticism from an industry trade group, the protests to the GAO, and Oracle's lawsuit.

A Cloud Strategy document presented to Congress makes a distinction between the DoD's need for a "General Purpose" cloud, and ones that will be "Fit For Purpose"

The General Purpose cloud that will go to AWS or Microsoft will be the cloud of first-choice, with a "primary implementation bias" for all defense agencies.

"Only when mission needs cannot be supported by General Purpose will Fit For Purpose alternatives be explored," the document reads.

"Mission owners" that want to stray from the cloud provider selected through the JEDI initiative will have to submit an "Exception Brief" to the DoD's CIO explaining why they believe the capability they require cannot be met by the General Purpose cloud.

David Harris contributed to this report.