The US Department of Defense has canceled a $10 billion contract with software company Microsoft to provide cloud services. The previous Trump administration awarded the lucrative contract to Microsoft, who is not a fan of then-Amazon chief Jeff Bezos. Amazon appealed the decision. The Pentagon now appears to be pushing for a new contract that will also include Amazon.
According to Amazon, political games formed the basis of the Trump administration’s decision to partner with Microsoft. Trump had previously publicly ridiculed Amazon’s bid for the contract and delayed awarding the contract. Trump has also regularly criticized Amazon.
Microsoft won a $10 billion (8.5 billion euros) contract over ten years in 2019. What followed was a legal battle initiated by Amazon, which found the bid was unfair. Oracle, which won the previous cloud contract, also filed in court. Due to legal action, the project – called JEDI Cloud – never took off.
And now the Pentagon is finally withdrawing the contract. “With the changing technological environment, it is becoming clear that the long-delayed JEDI Cloud contract no longer meets the requirements of the Department of Defense,” the official statement said on Tuesday.
In its new plans — dubbed Joint Warfighter Cloud Capability — the Pentagon plans to partner with multiple vendors for five years. It plans to “seek proposals from a limited number of sources, namely Microsoft and Amazon Web Services”. Both US companies are the only ones able to fulfill contract requirements, according to the department, although other suppliers will also be considered if they can demonstrate they meet the terms. This leaves the door open for Oracle and Alphabet (Google).
Microsoft and Amazon won’t get the new plan — for which the Pentagon hasn’t disclosed — that way. They will have to make proposals on how they want to organize cloud services. The ministry requests, among other things, greater security, the possibility of data processing at different levels of security, and the availability of cloud services in “tactical environments”.
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