Pentagon says it will stick with Microsoft for $10 billion JEDI cloud contract

The Pentagon said Friday it will stick with Microsoft for a major cloud contract that has been disputed in court for months.

The JEDI, or Joint Enterprise Defense Infrastructure, deal has become one of the most hotly contested contracts for the Department of Defense. The contract is intended to modernize the Pentagon’s colossal IT infrastructure and could be valued up to $10 billion for services rendered over as many as 10 years.

“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 Pentagon said in a statement. “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. 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 outcome represents a loss for Amazon, which challenge the award of the contract after the Pentagon gave it to Microsoft in October.

Amazon said in a scathing blog post Friday that it will continue to seek a review of the situation and that the Pentagon’s re-evaluation of the companies’ proposals simply validated the original decision to go with Microsoft.

“On JEDI, President Trump reportedly ordered former Secretary Mattis to ‘screw’ Amazon, blatantly interfered in an active procurement, directed his subordinate to conduct an unorthodox ‘review’ prior to a contract award announcement and then stonewalled an investigation into his own political interference,” Amazon wrote.

“While corrective action can be used to efficiently resolve protests, in reality, this corrective action changed nothing, wasted five months that could have been spent getting to the bottom of these serious concerns, and was designed solely to distract from our broader concerns and reaffirm a decision that was corrupted by the President’s self-interest.”

Microsoft shares briefly moved higher during Friday’s trading session following the announcement before closing down 1.4% for the day in a mostly down day for tech stocks.

“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,”

In November, Amazon Web Services, Amazon’s cloud computing unit, filed a lawsuit in the Court of Federal Claims protesting the JEDI decision. The company argued that President Donald Trump’s bias against Amazon and its CEO, Jeff Bezos, influenced the Pentagon to give the contract to Microsoft. Amid the legal battle, the Pentagon invited Amazon and Microsoft to revise and resubmit their proposals for the contract. A Justice Department representative was not immediately available for comment following the Pentagon’s statement.