Pentagon’s Controversial $10 Billion JEDI War Cloud Contract

By Natalie Evans

August 21, 2018

Amazon, Amazon Web Services, Azure, cloud, cloud services, content services, CSRA, Data Security, DDS, DoD, Google, IBM, JEDI, Joint Enterprise Defense Infrastructure, Microsoft, Oracle, Personal Data, security

There is a massive bidding war happening and it’s for the latest Pentagon cloud contract. Along with traditional defense contractors, top tech companies are battling for the Joint Enterprise Defense Infrastructure or JEDI contract that the US Department of Defense issued.

The Department of Defense has been working on a cloud concept called the Joint Enterprise Defense Infrastructure (JEDI). In response to questions from Nextgov, Defense Department spokeswoman Heather Babb confirmed: “JEDI cloud services will be offered at all classification levels.” Babb said military and defense customers “will determine which applications and data migrate to the cloud.”  but “All levels” suggests that JEDI will be able to host information about America’s deployment and utilization of its nuclear weapons. This project will transition massive amounts of data to a commercially operated secure cloud system.

Although DoD says it’s too early to predict the ultimate value of the contract, JEDI is estimated to be worth about $10 billion. The contract will be awarded for a two-year period, with options to renew at five years and then again three years after that. The price-tag makes the JEDI contract tempting for even the largest of tech firms. The company that wins the contract will also have a foot in the door for future Pentagon work, as the DoD looks to rapidly expand its artificial intelligence capabilities.

Only a few cloud vendors are thought to be in the running for the JEDI contract, including Amazon, Microsoft, Google, IBM , CSRA and Oracle. The deal is a "single-source" award, meaning that only one company will win the entire contract. Not long ago, Amazon Web Services developed a cloud solution for the Central Intelligence Agency (CIA) at a cost of approximately $600 million. Currently, Amazon is considered the front-runner for the contract since the tech giant already services the cloud system used by U.S. intelligence agencies. For the smaller players and some fairly large companies like Oracle—the only hope is that DoD will reevaluate and pursue a multi-cloud approach, along with dividing it’s business into smaller RFPs.

Microsoft Azure Release Coincidence?

Both IBM and Microsoft confirmed their interest in winning the JEDI contract, Toni Townes-Whitley, Microsoft’s Corporate Vice President of Worldwide Public Sector and Industry, said in a statement, “We believe Microsoft’s unique hybrid approach delivers enterprise cloud capabilities from headquarters to the tactical edge and best supports the Department of Defense in advancing its mission.”

Microsoft also just recently released Azure Stack for Azure Government. Azure Stack provides a similar set of cloud services that they would get in the public cloud. For Azure cloud customers who are looking to manage across public and private environments, often referred to as a hybrid approach, it gives a common look and feel across both public and private.

“As a cornerstone of Microsoft’s hybrid cloud approach, consistency means government customers get the same infrastructure and services with Azure Stack as they do with Azure — the same APIs, DevOps tools, portal, and more,” Natalia Mackevicius, Program Director, Microsoft Azure Stack wrote in a blog post announcing the new program.

“Azure Stack for Azure Government directly addresses many other significant challenges our top federal government customers face. This includes tough regulatory, connectivity and latency requirements,” Mackevicius, wrote in a blog post announcement. While this product geared towards government types, it comes out in perfect time to compete with the other tech giants.

The DoD has already issued two draft requests for proposals (RFPs). With the final request in May, time is running out for contractors to change the DoD’s position that a single cloud provider will best serve its needs.

Meeting Requirements

To secure the contract, cloud providers will need to meet requirements drafted by the Defense Digital Service, an agency created in 2015 to bring the Pentagon up to speed with the commercial tech industry.

A strict list of requirements has been developed in which any cloud provider needs to meet  in order to be eligible to compete for JEDI. The agency seems intent on awarding the entire contract to a single provider, rather than splitting it up between several vendors. The acquisition process has been laced by controversy, as legacy government contractors go up against tech titans for the prized contract. The DDS requirements have sent defense contractors and their lobbyists scrambling—an initial JEDI proposal received more than a thousand comments from industry representatives. 

“I think what you saw across the board was comments from industry pushing for a multi-cloud direction, to which they responded, ‘Your comment is noted,’ basically saying thanks but no thanks,” one industry executive, who requested anonymity to freely discuss the bidding process, said. “Clearly, industry has an opinion on this that’s diametrically opposed to the DDS opinion.”

But DDS’s strict requirements are necessary to support the DoD’s mission, says Chris Lynch Director at DDS, “Anybody who thinks that it’s a list of technology is missing the point of what we’re doing here,” Lynch told Gizmodo in an interview. “Everything that we are talking about came from painful observations of the ways technology has failed the mission that we run here, and the consequence of that is sometimes death. We lose people when this doesn’t do what we need it to do.” Spending time on the battlefield, observing the ways DoD’s current cloud setup allowed Lynch and his colleagues to review firsthand what needs to change and that research has been funneled into the JEDI requests for proposals.

Ending Notes

Since there has been a lot of controversy with the RFP, Deputy Secretary of Defense Patrick Shanahan released a statement defending JEDI from the critics, saying the contract was subject to “fair and open competition” and disputed the idea that it’s a winner-take-all situation.

While the Pentagon is scheduled to award the contract in September, it will be interesting to see if there are any more pushbacks to the date. With such an aggressive timeline they are stating that within 30 days after awarding the contract, DoD expects to start using its new cloud for unclassified material. A “secret” offering is expected to be online within six months, followed by a “top secret” and above offering within nine months.  With the vast amounts of data, and strict security protocols having a single provider,  I think it's the only achievable way, but is it in the best interest for all?

Natalie Evans

Natalie Evans has over 16-years in the tech industry and currently works as the event coordinator and tech reporter for CMS-Connected, keeping up-to-date on what's happening in and around the Content Management industry.