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  1. Pentagon kills Microsoft’s $10B JEDI cloud contract, says tech is now outdated Amazon's legal stall tactics seem to have paid off. Following years of controversy and intrigue, the Pentagon canceled its JEDI cloud computing contract with Microsoft today. Microsoft was awarded the contract in October 2019, but work stalled as Amazon, the other finalist, mounted a legal challenge. Now, the Department of Defense has scrapped the entire project, saying that it’s out of date. “The Department has determined that, due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs,” a Pentagon spokesperson said in a statement. The deal, which was to be worth up to $10 billion over 10 years, was a significant though contested win for Microsoft that would have given its cloud division a healthy boost in revenue and market share. Late last year, Microsoft Azure held 20 percent of the market, trailing Amazon’s AWS’ 31 percent. In JEDI’s place, the Pentagon said it will be soliciting proposals for a new contract, the Joint Warfighter Cloud Capability, from both Microsoft and Amazon. Oracle, IBM, and Google submitted JEDI bids as well, though Google withdrew its bid under pressure from employees. The Pentagon says it will continue its research to see whether other companies can compete, but it insists that only Microsoft and Amazon are sophisticated enough to meet its requirements. The new contract represents a victory for Amazon, which launched its legal challenge a month after the Pentagon awarded the contract for JEDI, which stands for Joint Enterprise Defense Infrastructure. The company filed suit in the US Court of Federal Claims, alleging that former President Donald Trump tipped the scales in favor of Microsoft because of his animus toward Amazon’s then-CEO Jeff Bezos. Trump fanned the flames with repeated criticism of Amazon’s bid. “I’m getting tremendous complaints about the contract with the Pentagon and with Amazon; they’re saying it wasn’t competitively bid,” he told reporters in July 2019. “I will be asking them to take a look at it very closely to see what’s going on because I have had very few things where there's been such complaining.” Trump’s criticism aside, JEDI was mired in controversy almost from the outset. The Pentagon launched the solicitation by insisting on using a single vendor, which drew criticism from Oracle and IBM even before bids were due. Republicans in Congress joined them, arguing that multiple winners should be selected. Then, in August 2019, just weeks before the contract was to be awarded, Defense Secretary Mark Esper ordered an independent review before ultimately announcing Microsoft as a winner several weeks later. Amazon cried foul, claiming the delay was further evidence that Trump had unfairly influenced the outcome of the bid process. In February 2020, Amazon won an injunction, halting work on JEDI, and the company continued to pursue its case. The stall tactic seems to have worked. While Amazon won’t get a chance to take the entire pie, as it would have if it had been awarded the JEDI deal, it will likely get a sizable slice of the new JWCC contract. Update 5:40 pm EDT: Microsoft and Amazon have both commented on the nixed contract. "We understand the DoD’s rationale, and we support them and every military member who needs the mission-critical 21st century technology JEDI would have provided," Toni Townes-Whitley, Microsoft's President of US Regulated Industries, wrote in a blog post. "The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward. The security of the United States is more important than any single contract, and we know that Microsoft will do well when the nation does well. Because the security of the United States through the provision of critical technology upgrades is more important that any single contract, we respect and accept DoD’s decision to move forward on a different path to secure mission-critical technology." Amazon had a different take on the matter, of course. “We understand and agree with the DoD’s decision," an AWS spokesperson said to Ars. "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.” Pentagon kills Microsoft’s $10B JEDI cloud contract, says tech is now outdated
  2. Amazon thinks it lost a military cloud computing contract worth $10 billion to rival Microsoft because our vendetta-addled president wanted to personally “screw” CEO Jeff Bezos, court documents show. Per the New York Times, Amazon wrote in a federal court complaint unsealed on Monday that Pentagon officials reviewed outdated Amazon submissions for the Joint Enterprise Defense Initiative (JEDI) project before granting the contract to competitor Microsoft—whose CEO Satya Nadella is not currently the target of one of Donald Trump’s mostly one-sided feuds. (Trump is reportedly obsessed with “Jeff Bozo” almost exclusively because the billionaire CEO also owns the “fake news” Washington Post, but this is also a man whose list of top grievances includes water-conserving toilets.) Amazon’s complaint in the United States Court of Federal Claims in Washington claims that Trump intervened in the contract process to hurt Bezos, “his perceived political enemy,” with the Defense Department making “blatant, inexplicable errors” complying with the White House’s directive. The Pentagon “failed to acknowledge the numerous instances in which [Amazon Web Service’s] demonstrated capabilities vastly exceeded performance requirements,” Amazon’s legal team wrote, “while ignoring instances where Microsoft necessarily failed to demonstrate its solution met the technical requirements.” Amazon added in the complaint that the Pentagon had “departed from the rules of procurement and complied—consciously or subconsciously—with its commander in chief’s expressed desire to reject AWS’s superior bid.” Amazon claims in the filings those factors included a last-minute requirement preventing it from using “existing data centers already certified for classified use and instead requiring AWS to build new dedicated classified infrastructure for DoD,” driving up the cost of its bid. Another assertion involves Secretary of Defense Mark Esper, who re-opened the JEDI bidding process after the departure of his predecessor Jim Mattis in late 2018. Amazon wrote that while Esper recused himself from matters involving the JEDI contract on Oct. 22, 2019, citing conflicts of interest, the decision to award the contract to Microsoft had already happened five days earlier. The filing calls this an “unprecedented and bizarre attempt to rewrite the factual record and unsully a process tainted by the President’s intervention.” “DoD’s substantial and pervasive errors are hard to understand and impossible to assess separate and apart from the President’s repeatedly expressed determination to, in the words of the President himself, ‘screw Amazon,’” Amazon wrote, referring to an order Trump allegedly gave Mattis in 2018. The $10 billion isn’t all that’s on the table. While JEDI was initially billed as a data-management system for the military backend, it is also a potential opportunity for tech giants to expand their foothold in the wildly lucrative contracting business feeding off the U.S.’s ever-expanding war machine. An April 2018 article in Defense One indicated that top defense officials such as Mattis viewed cloud computing as a way “not just to manage files, email, and paperwork but to push mission-critical information to front-line operators.” Employee protests at the prospect of their work being used to fuel conflict drove Google out of the bidding process and created a ruckus at Microsoft, where staffers wrote a letter claiming JEDI could cause “human suffering” in pursuit of “short-term profits.” Amazon was widely considered to be the clear front-runner for the JEDI contract until the bidding process entered its final phase. Somewhat tellingly, competitors including Google, Microsoft, Oracle, and IBM were reportedly furious about stipulations in the contract that, to them, seemed designed to clear the company’s path of rival bidders (as well as reports Amazon offered a Pentagon official working on the project a lucrative job). One DC lobbyist for Oracle, Kenneth Glueck, reportedly shopped White House aides a memo claiming that Amazon won the contract due to a “conspiracy,” with the document making it all the way to Trump’s desk. In a statement to Times, the Defense Department denied that Trump’s hatred of Bezos or any other outside factors played a role in its decision. “This source selection decision was made by an expert team of career public servants and military officers from across the Department of Defense and in accordance with D.O.D.’s normal source-selection process,” Pentagon spokeswoman Elissa Smith told the paper. “There were no external influences on the source selection decision.” Source
  3. Microsoft beats Amazon to win the Pentagon’s $10 billion JEDI cloud contract It’s finally over The US government has awarded a giant $10 billion cloud contract to Microsoft, the Department of Defense has confirmed. Known as Joint Enterprise Defense Infrastructure (JEDI), the contract will provide the Pentagon with cloud services for basic storage and power all the way up to artificial intelligence processing, machine learning, and the ability to process mission-critical workloads. It’s a key contract for Microsoft as the company battles Amazon for cloud dominance, and for a while it was up in the air as to whether Microsoft or Amazon would win this particular one. IBM and Oracle were both eliminated for the bidding back in April, leaving just Microsoft and Amazon as the only companies that could meet the requirements. The contract has been controversial throughout the bidding process, and Oracle lost a legal challenge after it claimed the contract has conflicts of interest. President Trump even got involved during the bidding process, saying the government was looking at the contract after “getting enormous complaints” from competitors to Amazon and Microsoft. Trump has been a critic of Amazon and its CEO Jeff Bezos over the company’s tax arrangements. While the contract award, which will last for 10 years, will be seen as a big win for Microsoft, employees might not necessarily agree. Thousands of Google employees protested against the tech giant’s involvement in the Pentagon’s “pathfinder” AI program, known as Project Maven. Google was ultimately forced to step back from the work, and wasn’t part of the final bidding process for this contract. Microsoft employees have also called on the company to drop its HoloLens US Army contract, which could eventually provide more than 100,000 of the augmented reality headsets for combat and training in the military. Microsoft is still honoring the contract, and the US Army are already using modified HoloLens 2 headsets for soldiers. Source: Microsoft beats Amazon to win the Pentagon’s $10 billion JEDI cloud contract Source: (The Verge)
  4. Oracle has been complaining about the procurement process around the Pentagon’s $10 billion, decade-long JEDI cloud contract, even before the DoD opened requests for proposals last year. It went so far as to file a lawsuit in December, claiming a potential conflict of interest on the part of a procurement team member. Today, that case was dismissed in federal court. In dismissing the case, Federal Claims Court Senior Judge Eric Bruggink ruled that the company had failed to prove a conflict in the procurement process, something the DOD’s own internal audits found in two separate investigations. Judge Bruggink ultimately agreed with the DoD’s findings: We conclude as well that the contracting officer’s findings that an organizational conflict of interest does not exist and that individual conflicts of interest did not impact the procurement, were not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Plaintiff’s motion for judgment on the administrative record is therefore denied. The company previously had filed a failed protest with the Government Accountability Office (GAO), which also ruled that the procurement process was fair and didn’t favor any particular vendor. Oracle had claimed that the process was designed to favor cloud market leader AWS. It’s worth noting that the employee in question was a former AWS employee. AWS joined the lawsuit as part of the legal process, stating at the time in the legal motion, “Oracle’s Complaint specifically alleges conflicts of interest involving AWS. Thus, AWS has direct and substantial economic interests at stake in this case, and its disposition clearly could impair those interests.” Friday’s ruling opens the door for the announcement of a winner of the $10 billion contract, as early as next month. The DoD previously announced that it had chosen Microsoft and Amazon as the two finalists for the winner-take-all bid. Source
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