Jul 16, 2021 (IAM Newswire via COMTEX) -- After more than a year and a half since the so-called JEDI contract was awarded to Microsoft /zigman2/quotes/207732364/composite MSFT -1.75% , Pentagon officials announced that they are canceling the massive cloud-computing deal. Although the Department of Defense representatives stated technical issues as the main reasons for the termination of 10 yearlong cloud computing services, the fact that the long litigation process, burdening contract implementation, had a significant impact on the cancellation decision. The lawsuit was initiated by Amazon /zigman2/quotes/210331248/composite AMZN -0.74% implying that then-President Donald Trump improperly pressured the Pentagon not to award the contract to Amazon, because of its founder Jeff Bezos. And the stated technical issues involved the increased involving requirements as the industry advances, as well as increased cloud conversancy, therefore the awarded JEDI cloud contract did not meet Pentagon's needs.
Why did Amazon fight so hard to cancel the contract?
The conflict with Amazon and Jeff Bezos started when President Donald Trump started blaming the Washington Post for negative coverage of his administration. Mr. Bezos acquired Washington Post in 2013 for $250 million. So, it is logical that Amazon feared President Trump's influence on Pentagon when deciding who to award the contract and that was surely an important segment when starting a legal process. But not only that. The fact that the original contract was valued up to $ 10 billion over 10 years, and the fact that Amazon Web Services (AWS) are the leading cloud technical solution, did not allow Amazon to sit this one out. So, instead of signing the contract as the favorite in the bidding process, Amazon filed a lawsuit. That additionally heated the animosity between Bezos and Trump. The lawsuit was successful, as the U.S. Court of Federal Claims decided on a halt order, based on the claims that the Microsoft scenario was not technically feasible as Pentagon estimated.
Bidding for new JEDI contract coming up
As the Department of Defense made a difficult choice, so instead of a yearlong legal battle, they choose the path which opens the doors for a new cloud computing contract, the one which will be technologically superior to the contract with Microsoft. And the new bid will not be limited only to Microsoft and Amazon, but other companies like International Business Machines Corporation /zigman2/quotes/203856914/composite IBM -0.88% , Oracle Corporation /zigman2/quotes/202180826/composite ORCL -0.99% , and Google /zigman2/quotes/205453964/composite GOOG -2.02% can also participate. The rebooting of the JEDI project became more probable since this April when Pentagon's motion to dismiss Amazon's case was refused. However, due to the enormous size of the Department of Defense, some legal experts and lawmakers suggested that an initial single-vendor approach may not be the best solution. Instead, they suggest that Pentagon should go for enterprise cloud computing, which is an increasingly popular approach these days, where multiple companies are selected as participants to reduce the risk of legal charges from excluded companies.
Is there a problem with this press release? Contact the source provider Comtex at firstname.lastname@example.org. You can also contact MarketWatch Customer Service via our Customer Center.