Jul
07
2021
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The single vendor requirement ultimately doomed the DoD’s $10B JEDI cloud contract

When the Pentagon killed the JEDI cloud program yesterday, it was the end of a long and bitter road for a project that never seemed to have a chance. The question is why it didn’t work out in the end, and ultimately I think you can blame the DoD’s stubborn adherence to a single vendor requirement, a condition that never made sense to anyone, even the vendor that ostensibly won the deal.

In March 2018, the Pentagon announced a mega $10 billion, decade-long cloud contract to build the next generation of cloud infrastructure for the Department of Defense. It was dubbed JEDI, which aside from the Star Wars reference, was short for Joint Enterprise Defense Infrastructure.

The idea was a 10-year contract with a single vendor that started with an initial two-year option. If all was going well, a five-year option would kick in and finally a three-year option would close things out with earnings of $1 billion a year.

While the total value of the contract had it been completed was quite large, a billion a year for companies the size of Amazon, Oracle or Microsoft is not a ton of money in the scheme of things. It was more about the prestige of winning such a high-profile contract and what it would mean for sales bragging rights. After all, if you passed muster with the DoD, you could probably handle just about anyone’s sensitive data, right?

Regardless, the idea of a single-vendor contract went against conventional wisdom that the cloud gives you the option of working with the best-in-class vendors. Microsoft, the eventual winner of the ill-fated deal acknowledged that the single vendor approach was flawed in an interview in April 2018:

Leigh Madden, who heads up Microsoft’s defense effort, says he believes Microsoft can win such a contract, but it isn’t necessarily the best approach for the DoD. “If the DoD goes with a single award path, we are in it to win, but having said that, it’s counter to what we are seeing across the globe where 80% of customers are adopting a multicloud solution,” Madden told TechCrunch.

Perhaps it was doomed from the start because of that. Yet even before the requirements were fully known there were complaints that it would favor Amazon, the market share leader in the cloud infrastructure market. Oracle was particularly vocal, taking its complaints directly to the former president before the RFP was even published. It would later file a complaint with the Government Accountability Office and file a couple of lawsuits alleging that the entire process was unfair and designed to favor Amazon. It lost every time — and of course, Amazon wasn’t ultimately the winner.

While there was a lot of drama along the way, in April 2019 the Pentagon named two finalists, and it was probably not too surprising that they were the two cloud infrastructure market leaders: Microsoft and Amazon. Game on.

The former president interjected himself directly in the process in August that year, when he ordered the Defense Secretary to review the matter over concerns that the process favored Amazon, a complaint which to that point had been refuted several times over by the DoD, the Government Accountability Office and the courts. To further complicate matters, a book by former defense secretary Jim Mattis claimed the president told him to “screw Amazon out of the $10 billion contract.” His goal appeared to be to get back at Bezos, who also owns the Washington Post newspaper.

In spite of all these claims that the process favored Amazon, when the winner was finally announced in October 2019, late on a Friday afternoon no less, the winner was not in fact Amazon. Instead, Microsoft won the deal, or at least it seemed that way. It wouldn’t be long before Amazon would dispute the decision in court.

By the time AWS re:Invent hit a couple of months after the announcement, former AWS CEO Andy Jassy was already pushing the idea that the president had unduly influenced the process.

“I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal,” Jassy said at that time.

Then came the litigation. In November the company indicated it would be challenging the decision to choose Microsoft charging that it was was driven by politics and not technical merit. In January 2020, Amazon filed a request with the court that the project should stop until the legal challenges were settled. In February, a federal judge agreed with Amazon and stopped the project. It would never restart.

In April the DoD completed its own internal investigation of the contract procurement process and found no wrongdoing. As I wrote at the time:

While controversy has dogged the $10-billion, decade-long JEDI contract since its earliest days, a report by the DoD’s inspector general’s office concluded today that, while there were some funky bits and potential conflicts, overall the contract procurement process was fair and legal and the president did not unduly influence the process in spite of public comments.

Last September the DoD completed a review of the selection process and it once again concluded that Microsoft was the winner, but it didn’t really matter as the litigation was still in motion and the project remained stalled.

The legal wrangling continued into this year, and yesterday the Pentagon finally pulled the plug on the project once and for all, saying it was time to move on as times have changed since 2018 when it announced its vision for JEDI.

The DoD finally came to the conclusion that a single-vendor approach wasn’t the best way to go, and not because it could never get the project off the ground, but because it makes more sense from a technology and business perspective to work with multiple vendors and not get locked into any particular one.

“JEDI was developed at a time when the Department’s needs were different and both the CSPs’ (cloud service providers) technology and our cloud conversancy was less mature. In light of new initiatives like JADC2 (the Pentagon’s initiative to build a network of connected sensors) and AI and Data Acceleration (ADA), the evolution of the cloud ecosystem within DoD, and changes in user requirements to leverage multiple cloud environments to execute mission, our landscape has advanced and a new way ahead is warranted to achieve dominance in both traditional and nontraditional warfighting domains,” said John Sherman, acting DoD chief information officer in a statement.

In other words, the DoD would benefit more from adopting a multicloud, multivendor approach like pretty much the rest of the world. That said, the department also indicated it would limit the vendor selection to Microsoft and Amazon.

“The Department intends to seek proposals from a limited number of sources, namely the Microsoft Corporation (Microsoft) and Amazon Web Services (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 department said in a statement.

That’s not going to sit well with Google, Oracle or IBM, but the department further indicated it would continue to monitor the market to see if other CSPs had the chops to handle their requirements in the future.

In the end, the single vendor requirement contributed greatly to an overly competitive and politically charged atmosphere that resulted in the project never coming to fruition. Now the DoD has to play technology catch-up, having lost three years to the histrionics of the entire JEDI procurement process and that could be the most lamentable part of this long, sordid technology tale.

Jul
06
2021
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Nobody wins as DoD finally pulls the plug on controversial $10B JEDI contract

After several years of fighting and jockeying for position by the biggest cloud infrastructure companies in the world, the Pentagon finally pulled the plug on the controversial winner-take-all, $10 billion JEDI contract today. In the end, nobody won.

“With the shifting technology environment, it has become clear that the JEDI cloud contract, which has long been delayed, no longer meets the requirements to fill the DoD’s capability gaps,” a Pentagon spokesperson stated.

The contract procurement process began in 2018 with a call for RFPs for a $10 billion, decade-long contract to handle the cloud infrastructure strategy for The Pentagon. Pentagon spokesperson Heather Babb told TechCrunch why they were going with the. single-winner approach: “Single award is advantageous because, among other things, it improves security, improves data accessibility and simplifies the Department’s ability to adopt and use cloud services,” she said at the time.

From the start though, companies objected to the single-winner approach, believing that the Pentagon would be better served with a multi-vendor approach. Some companies, particularly Oracle believed the procurement process was designed to favor Amazon.

In the end it came down to a pair of finalists — Amazon and Microsoft — and in the end Microsoft won. But Amazon believed that it had superior technology and only lost the deal because of direct interference by the previous president who had open disdain for then-CEO Jeff Bezos (who is also the owner of the Washington Post newspaper).

Amazon decided to fight the decision in court, and after months of delay, the Pentagon made the decision that it was time to move on. In a blog post, Microsoft took a swipe at Amazon for precipitating the delay.

“The 20 months since DoD selected Microsoft as its JEDI partner highlights issues that warrant the attention of policymakers: When one company can delay, for years, critical technology upgrades for those who defend our nation, the protest process needs reform. Amazon filed its protest in November 2019 and its case was expected to take at least another year to litigate and yield a decision, with potential appeals afterward,” Microsoft wrote in its blog post about the end of the deal.

But in a statement of its own, Amazon reiterated its belief that the process was not fairly executed. “We understand and agree with the DoD’s decision. Unfortunately, the contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement. Our commitment to supporting our nation’s military and ensuring that our warfighters and defense partners have access to the best technology at the best price is stronger than ever. We look forward to continuing to support the DoD’s modernization efforts and building solutions that help accomplish their critical missions,” a company spokesperson said.

It seems like a fitting end to a project that I felt was doomed from the beginning. From the moment the Pentagon announced this contract with the cutesy twist on the Star Wars name, the procurement process has taken more twists and turns than a TV soap.

In the beginning, there was a lot of sound and fury and it led to a lot of nothing. We move onto whatever cloud procurement process happens next.

Dec
16
2020
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Amazon asks judge to set aside Microsoft’s $10B DoD JEDI cloud contract win

It’s been more than two years since the Pentagon announced its $10 billion, decade long JEDI cloud contract, which was supposed to provide a pathway to technological modernization for U.S. armed forces. While Microsoft was awarded the contract in October 2019, Amazon went to court to protest that decision, and it has been in legal limbo ever since.

Yesterday marked another twist in this government procurement saga when Amazon released its latest legal volley, asking a judge to set aside the decision to select Microsoft. Its arguments are similar to ones it has made before, but this time takes aim at the Pentagon’s reevaluation process, which after reviewing the contract and selection process, still found in a decision released this past September that Microsoft had won.

Amazon believes that reevaluation was highly flawed, and subject to undue influence, bias and pressure from the president. Based on this, Amazon has asked the court to set aside the award to Microsoft .

The JEDI reevaluations and re-award decision have fallen victim to an Administration that suppresses the good-faith analysis and reasoning of career officials for political reasons — ultimately to the detriment of national security and the efficient and lawful use of taxpayer dollars. DoD has demonstrated again that it has not executed this procurement objectively and in good faith. This re-award should be set aside.

As you might imagine, Frank X. Shaw, corporate vice president for communications at Microsoft does not agree, believing his company won on merit and by providing the best price.

“As the losing bidder, Amazon was informed of our pricing and they realized they’d originally bid too high. They then amended aspects of their bid to achieve a lower price. However, when looking at all the criteria together, the career procurement officials at the DoD decided that given the superior technical advantages and overall value, we continued to offer the best solution,” Shaw said in a statement shared with TechCrunch.

As for Amazon, a spokesperson told TechCrunch, “We are simply seeking a fair and objective review by the court, regarding the technical errors, bias and political interference that blatantly impacted this contract award.”

And so it goes.

The Pentagon announced it was putting out a bid for a $10 billion, decade long contract in 2018, dubbing it JEDI, short for Joint Enterprise Defense Infrastructure. The procurement process has been mired in controversy from the start, and the size and scope of the deal has attracted widespread attention, much more than your typical government contract. It brought with it claims of bias, particularly by Oracle, that the bidding process was designed to favor Amazon.

We are more than two years beyond the original announcement. We are more than year beyond the original award to Microsoft, and it still remains stuck in a court battle with two major tech companies continuing to snipe at one another. With neither likely to give in, it will be up to the court to decide the final outcome, and perhaps end this saga once and for all.

Note: The DoD did not respond to our request for comment. Should that change, we will update the story.

Sep
08
2020
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The $10B JEDI contract is locked, loaded and still completely stuck

The other day I took a moment to count the number of stories we’ve done on TechCrunch on the DoD’s $10 billion, decade-long, winner-take-all, JEDI cloud contract. This marks the 30th time we’ve written about this deal over the last two years, and it comes after a busy week last week in JEDI cloud contract news.

That we’re still writing about this is fairly odd if you consider the winner was announced last October when the DoD chose Microsoft, but there is no end in sight to the on-going drama that is this procurement process.

Government contracts don’t typically catch our attention at TechCrunch, but this one felt different early on. There was the size and scope of the deal of course. There was the cute play on the “Star Wars” theme. There was Oracle acting like a batter complaining to the umpire before the first pitch was thrown. There was the fact that everyone thought Amazon would win until it didn’t.

There was a lot going on. In fact, there’s still a lot going on with this story.

Oracle doth protest too much

Let’s start with Oracle, which dispatched CEO Safra Catz to the White House in April 2018 even before the RFP had been written. She was setting the stage to complain that the deal was going to be set up to favor Amazon, something that Oracle alleged until the day Microsoft was picked the winner.

Catz had been on the Trump transition team and so had the ear of the president. While the president certainly interjected himself in this process, it’s not known how much influence that particular meeting might have had. Suffice to say that it was only the first volley in Oracle’s long war against the JEDI contract procurement process.

It would include official complaints with the Government Accountability Office and a federal lawsuit worth not coincidentally $10 billion. It would claim the contract favored Amazon. It would argue that the one-vendor approach wasn’t proper. It would suggest that because the DoD had some former Amazon employees helping write the RFP, that it somehow favored Amazon. The GAO and two court cases found otherwise, ruling against Oracle every single time.

It’s worth noting that the Court of Appeals ruling last week indicated that Oracle didn’t even meet some of the basic contractual requirements, all the while complaining about the process itself from the start.

Amazon continues to press protests

Nobody was more surprised that Amazon lost the deal than Amazon itself. It still believes to this day that it is technically superior to Microsoft and that it can offer the DoD the best approach. The DoD doesn’t agree. On Friday, it reaffirmed its choice of Microsoft. But that is not the end of this, not by a long shot.

Amazon has maintained since the decision was made last October that the decision-making process had been tainted by presidential interference in the process. They believe that because of the president’s personal dislike of Amazon CEO Jeff Bezos, who also owns the Washington Post, he inserted himself in the process to prevent Bezos’ company from winning that deal.

In January, Amazon filed a motion to stop work on the project until this could all be sorted out. In February, a judge halted work on the project until Amazon’s complaints could be heard by the court. It is September and that order is still in place.

In a blog post on Friday, Amazon reiterated its case, which is based on presidential interference and what it believes is technical superiority. “In February, the Court of Federal Claims stopped performance on JEDI. The Court determined AWS’s protest had merit, and that Microsoft’s proposal likely failed to meet a key solicitation requirement and was likely deficient and ineligible for award. Our protest detailed how pervasive these errors were (impacting all six technical evaluation factors), and the Judge stopped the DoD from moving forward because the very first issue she reviewed demonstrated serious flaws,” Amazon wrote in the post.

Microsoft for the win?

Microsoft on the other hand went quietly about its business throughout this process. It announced Azure Stack, a kind of portable cloud that would work well as a field operations computer system. It beefed up its government security credentials.

Even though Microsoft didn’t agree with the one-vendor approach, indicating that the government would benefit more from the multivendor approach many of its customers were taking, it made clear if those were the rules, it was in it to win it — and win it did, much to the surprise of everyone, especially Amazon.

Yet here we are, almost a year later and in spite of the fact that the DoD found once again, after further review, that Microsoft is still the winner, the contract remains in limbo. Until that pending court case is resolved, we will continue to watch and wait and wonder if this will ever be truly over, and the JEDI cloud contract will actually be implemented.

Sep
04
2020
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DoD reaffirms Microsoft has won JEDI cloud contract, but Amazon legal complaints still pending

We have seen a lot of action this week as the DoD tries to finally determine the final winner of the $10 billion, decade-long DoD JEDI cloud contract. Today, the DoD released a statement that after reviewing the proposals from finalists Microsoft and Amazon again, it reiterated that Microsoft was the winner of the contract.

“The Department has completed its comprehensive re-evaluation of the JEDI Cloud proposals and determined that Microsoft’s proposal continues to represent the best value to the Government. The JEDI Cloud contract is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract that will make a full range of cloud computing services available to the DoD,” the DoD said in a statement.

This comes on the heels of yesterday’s Court of Appeals decision denying Oracle’s argument that the procurement process was flawed and that there was a conflict of interest because a former Amazon employee helped write the requirements for the RFP.

While the DoD has determined that it believes that Microsoft should still get the contract, after selecting them last October, that doesn’t mean this is the end of the line for this long-running saga. In fact, a federal judge halted work on the project in February pending a hearing on an ongoing protest from Amazon, which believes it should have won based on merit, and the fact it believes the president interfered with the procurement process to prevent Jeff Bezos, who owns The Washington Post, from getting the lucrative contract.

The DoD confirmed that the project could not begin until the legal wrangling was settled. “While contract performance will not begin immediately due to the Preliminary Injunction Order issued by the Court of Federal Claims on February 13, 2020, DoD is eager to begin delivering this capability to our men and women in uniform,” the DoD reported in a statement.

A Microsoft spokesperson said the company was ready to get to work on the project as soon as it got the OK to proceed. “We appreciate that after careful review, the DoD confirmed that we offered the right technology and the best value. We’re ready to get to work and make sure that those who serve our country have access to this much needed technology,” a Microsoft spokesperson told TechCrunch.

Meanwhile, in a blog post published late this afternoon, Amazon made it clear that it was unhappy with today’s outcome and will continue to pursue legal remedy for what they believe to be presidential interference that has threatened the integrity of the procurement process. Here’s how they concluded the blog post:

We strongly disagree with the DoD’s flawed evaluation and believe it’s critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence. The question we continue to ask ourselves is whether the President of the United States should be allowed to use the budget of the Department of Defense to pursue his own personal and political ends? Throughout our protest, we’ve been clear that we won’t allow blatant political interference, or inferior technology, to become an acceptable standard. Although these are not easy decisions to make, and we do not take them lightly, we will not back down in the face of targeted political cronyism or illusory corrective actions, and we will continue pursuing a fair, objective, and impartial review.

While today’s statement from DoD appears to take us one step closer to the end of the road for this long-running drama, it won’t be over until the court rules on Amazon’s arguments. It’s clear from today’s blog post that Amazon has no intention of stepping down.

Note: We have  updated this story with content from an Amazon blog post responding to this news.

Sep
03
2020
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Oracle loses $10B JEDI cloud contract appeal yet again

Oracle was never fond of the JEDI cloud contract process, that massive $10 billion, decade-long Department of Defense cloud contract that went to a single vendor. It was forever arguing to anyone who would listen that that process was faulty and favored Amazon.

Yesterday it lost another round in court when the U.S. Court of Appeals rejected the database giant’s argument that the procurement process was flawed because it went to a single vendor. It also didn’t buy that there was a conflict of interest because a former Amazon employee was involved in writing the DoD’s request for proposal criteria.

On the latter point, the court wrote, “The court addressed the question whether the contracting officer had properly assessed the impact of the conflicts on the procurement and found that she had.”

Further, the court found that Oracle’s case didn’t have merit in some cases because it failed to meet certain basic contractual criteria. In other cases, it didn’t find that the DoD violated any specific procurement rules with this bidding process.

This represents the third time the company has tried to appeal the process in some way, four if you include direct executive intervention with the president. In fact, even before the RFP had been released in April 2018, CEO Safra Catz brought complaints to the president that the bid favored Amazon.

In November 2018, the Government Accountability Office (GAO) denied Oracle’s protest that it favored Amazon or any of the other points in their complaint. The following month, the company filed a $10 billion lawsuit in federal court, which was denied last August. Yesterday’s ruling is on the appeal of that decision.

It’s worth noting that for all its complaints that the deal favored Amazon, Microsoft actually won the bid. Even with that determination, the deal remains tied up in litigation as Amazon has filed multiple complaints, alleging that the president interfered with the deal and that they should have won on merit.

As with all things related to this contract, the drama has never stopped.

May
08
2020
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Microsoft and AWS exchange poisoned pen blog posts in latest Pentagon JEDI contract spat

Microsoft and Amazon are at it again as the fight for the Defense Department JEDI contract continues. In a recent series of increasingly acerbic pronouncements, the two companies continue their ongoing spat over the $10 billion, decade-long JEDI contract spoils.

As you may recall (or not), last fall in a surprise move, the DoD selected Microsoft as the winning vendor in the JEDI winner-take-all cloud infrastructure sweepstakes. The presumed winner was always AWS, but when the answer finally came down, it was not them.

To make a very long story short, AWS took exception to the decision and went to court to fight it. Later it was granted a stay of JEDI activities between Microsoft and the DoD, which as you can imagine did not please Microsoft . Since then, the two companies have been battling in PR pronouncements and blog posts trying to get the upper hand in the war for public opinion.

That fight took a hard turn this week when the two companies really went at it in dueling blog posts after Amazon filed its latest protest.

First there was Microsoft with PR exec Frank Shaw taking exception to AWS’s machinations, claiming the company just wants a do-over:

This latest filing – filed with the DoD this time – is another example of Amazon trying to bog down JEDI in complaints, litigation and other delays designed to force a do-over to rescue its failed bid.

Amazon’s Drew Herdner countered in a blog post published this morning:

Recently, Microsoft has published multiple self-righteous and pontificating blog posts that amount to nothing more than misleading noise intended to distract those following the protest.

The bottom line is that Microsoft believes it won the contract fair and square with a more competitive bid, while Amazon believes it should have won on technical superiority, and that there was political interference from the president because he doesn’t like Amazon CEO Jeff Bezos, who also owns the Washington Post.

If you’ve been following this story from the beginning (as I have), you know it has taken a series of twists and turns. It’s had lawsuits, complaints, drama and intrigue. The president has inserted himself into it, too. There have been accusations of conflicts of interest. There have been investigations, lawsuits and more investigations.

Government procurement tends to be pretty bland, but from the start when the DoD chose to use the cutesy Star Wars-driven acronym for this project, it has been anything but. Now it’s come down to two of the world’s largest tech companies exchanging angry blog posts. Sooner or later this is going to end right?

Apr
15
2020
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DoD Inspector General report finds everything was basically hunky-dory with JEDI cloud contract bid

While controversy has dogged the $10 billion, decade-long JEDI contract since its earliest days, a report by the DoD’s Inspector General’s Office concluded today that, while there were some funky bits and potential conflicts, overall the contract procurement process was fair and legal and  the president did not unduly influence the process in spite of public comments.

There were a number of issues along the way about whether the single contractor award was fair or reasonable, about whether there were was White House influence on the decision, and whether the president wanted to prevent Amazon founder Jeff Bezos, who also owns the Washington Post, from getting the contract.

There were questions about whether certain personnel, who had been or were about to be Amazon employees, had undue influence on the contents of the RFP or if former Secretary of Defense showed favor to Amazon, which ultimately did not even win the contract, and that one of Mattis’ under secretaries, in fact, owned stock in Microsoft .

It’s worth noting that the report states clearly that it is not looking at the merits of this contract award or whether the correct company won on technical acumen. It was looking at all of these controversial parts that came up throughout the process. As the report stated:

“In this report, we do not draw a conclusion regarding whether the DoD appropriately awarded the JEDI Cloud contract to Microsoft rather than Amazon Web Services. We did not assess the merits of the contractors’ proposals or DoD’s technical or price evaluations; rather we reviewed the source selection process and determined that it was in compliance with applicable statutes, policies, and the evaluation process described in the Request for Proposals.”

Although the report indicates that the White House would not cooperate with the investigation into potential bias, the investigators claim they had enough discussions with parties involved with the decision to conclude that there was no undue influence on the White House’s part:

“However, we believe the evidence we received showed that the DoD personnel who evaluated the contract proposals and awarded Microsoft the JEDI Cloud contract were not pressured regarding their decision on the award of the contract by any DoD leaders more senior to them, who may have communicated with the White House,” the report stated.

The report chose to blame the media instead, at least for partly giving the impression that the White House had influenced the process, stating:

“Yet, these media reports, and the reports of President Trump’s statements about Amazon, ongoing bid protests and “lobbying” by JEDI Cloud competitors, as well as inaccurate media reports about the JEDI Cloud procurement process, may have created the appearance or perception that the contract award process was not fair or unbiased.”

It’s worth noting that we reported that AWS president Andy Jassy made it clear in a press conference at AWS re:Invent in December that the company believed the president’s words had influenced the process.

“I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”

As for other points of controversy, such as those previously referenced biases, all were found lacking by the Inspector General. While the earliest complaints from Oracle and others were that Deap Ubhi and Victor Gavin, two individuals involved in drafting the RFP, failed to disclose they were offered jobs by Amazon during that time.

The report concluded that while Ubhi violated ethics rules, his involvement wasn’t substantial enough to influence the RFP (which again, Amazon didn’t win). “However, we concluded that Mr. Ubhi’s brief early involvement in the JEDI Cloud Initiative was not substantial and did not provide any advantage to his prospective employer, Amazon…,” the report stated.

The report found Gavin did not violate any ethics rules in spite of taking a job with Amazon because he had disqualified himself from the process, nor did the report find that former Secretary Mattis had any ethical violations in its investigation.

One final note: Stacy Cummings, Principal Deputy Assistant Secretary of Defense for Acquisition and Deputy Assistant Secretary of Defense for Acquisition Enablers, who worked for Mattis, owned some stock in Microsoft and did not disclose this. While the report found that was a violation of ethics guidelines, it ultimately concluded this did not unduly influence the award to Microsoft.

While the report is a substantial, 313 pages, it basically concludes that as far as the purview of the Inspector General is concerned, the process was basically conducted in a fair way. The court case, however involving Amazon’s protest of the award to Microsoft continues. And the project remains on hold until that is concluded.

Note: Microsoft and Amazon did not respond to requests from TechCrunch for comments before we published this article. If that changes, we will update accordingly.

Report on the Joint Enterprise Defense Infrastructure (Jedi) Cloud Procurement Dodig-2020-079 by TechCrunch on Scribd

Mar
13
2020
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Pentagon asks court for time to reconsider JEDI award to Microsoft

The JEDI contract award process might never be done. Following legal challenges from Amazon after the Pentagon’s massive, $10 billion cloud contract was awarded to Microsoft in October, the Pentagon indicated in court documents last night that it wishes to reconsider the award.

It’s just the latest plot twist in an epic government procurement saga.

Here’s what we know. The Pentagon filing is based on Amazon’s complaints about the technical part of the deal only. Amazon has said that it believes political interference influenced the awarding of the contract. However, the cloud computing giant also believes it beat Microsoft on the technical merits in a majority of instances required in the request for proposals issued by the Pentagon.

In fact, sources told TechCrunch, “AWS’s protest identified evaluation errors, clear deficiencies and unmistakable bias in six of the eight evaluation factors.”

Obviously Amazon was happy to hear this news. “We are pleased that the DoD has acknowledged ‘substantial and legitimate’ issues that affected the JEDI award decision, and that corrective action is necessary,” a spokesperson stated.

“We look forward to complete, fair, and effective corrective action that fully insulates the re-evaluation from political influence and corrects the many issues affecting the initial flawed award.”

As would expect, Microsoft thinks that the DoD made the correct choice, and believes the review will bear that out. “Over two years, the DoD reviewed dozens of factors and sub factors and found Microsoft equal or superior to AWS on every factor. We remain confident that Microsoft’s proposal was technologically superior, continues to offer the best value, and is the right choice for the DoD,” Microsoft VP of communications Frank Shaw said.

The court granted the Pentagon 120 days to review the results again, but indicated it could take longer. In the meantime, the project is at a standstill.

On Friday, the court issued a ruling that Amazon was likely to succeed on its complaint on merit, and that could have been the impetus of this latest action by the Pentagon.

While the political influence piece might not be overtly part of this filing, it does lurk in the background. The president has made it clear that he doesn’t like Amazon founder and CEO Jeff Bezos, who also owns The Washington Post. As we wrote last year:

Amazon, for instance, could point to Jim Mattis’ book where he wrote that the president told the then Defense Secretary to “screw Bezos out of that $10 billion contract.” Mattis says he refused, saying he would go by the book, but it certainly leaves the door open to a conflict question.

As we previously reported, AWS CEO Andy Jassy stated at a press event at AWS re:Invent in December that the company believed there was political bias at play in the decision-making process.

“What I would say is that it’s fairly obvious that we feel pretty strongly that it was not adjudicated fairly,” he said. He added, “I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”

The story has been updated with a comment from Microsoft. We have requested comment from DoD and will update the story should they respond.

Feb
13
2020
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Judge temporarily halts work on JEDI contract until court can hear AWS protest

A sealed order from a judge today has halted the $10 billion, decade-long JEDI project in its tracks until AWS’s protest of the contract award to Microsoft can be heard by the court.

The order signed by Judge Patricia E. Campbell-Smith of the U.S. Court Federal Claims stated:

The United States, by and through the Department of Defense, its officers, agents, and employees, is hereby PRELIMINARILY ENJOINED from proceeding with contract activities under Contract No. HQ0034-20-D-0001, which was awarded under Solicitation No. HQ0034-18-R-0077, until further order of the court.

The judge was not taking this lightly, adding that Amazon would have to put up $42 million bond to cover costs should it prove that the motion was filed wrongfully. Given Amazon’s value as of today is $1.08 trillion, they can probably afford to put up the money, but they must provide it by February 20th, and the court gets to hold the funds until a final determination has been made.

At the end of last month, Amazon filed a motion to stop work on the project until the court could rule on its protest. It is worth noting that in protests of this sort, it is not unusual to stop work until a final decision on the award can be made.

This is all part of an ongoing drama that has gone on for a couple of years since the DoD put this out to bid. After much wrangling, the DoD awarded the contract to Microsoft at the end of October. Amazon filed suit in November, claiming that the president had unduly influenced the process.

As we reported in December, at a press conference at AWS re:Invent, the cloud arm’s annual customer conference, AWS CEO Andy Jassy made clear the company thought the president had unfairly influenced the procurement process:

“I would say is that it’s fairly obvious that we feel pretty strongly that it was not adjudicated fairly,” he said. He added, “I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”

Earlier this week, the company filed paperwork to depose the president and Secretary of Defense Mark Esper.

The entire statement from the court today halting the JEDI project:

**SEALED**OPINION AND ORDER granting [130] Motion for Preliminary Injunction, filed by plaintiff. The United States, by and through the Department of Defense, its officers, agents, and employees, is hereby PRELIMINARILY ENJOINED from proceeding with contract activities under Contract No. HQ0034-20-D-0001, which was awarded under Solicitation No. HQ0034-18-R-0077, until further order of the court.

Pursuant to RCFC 65(c), plaintiff is directed to PROVIDE security in the amount of $42 million for the payment of such costs and damages as may be incurred or suffered in the event that future proceedings prove that this injunction was issued wrongfully.

As such, on or before 2/20/2020, plaintiff is directed to FILE a notice of filing on the docket in this matter indicating the form of security obtained, and plaintiff shall PROVIDE the original certification of security to the clerk of court. The clerk shall HOLD the security until this case is closed.

On or before 2/27/2020, the parties are directed to CONFER and FILE a notice of filing attaching a proposed redacted version of this opinion, with any competition-sensitive or otherwise protectable information blacked out. Signed by Judge Patricia E. Campbell-Smith.

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