Commerce goes direct to hyperscalers with $4.1B cloud pact

The Commerce Department is planning a 10-year, $4.1 billion blanket purchase agreement for cloud computing capabilities and only the big hyperscalers need apply.

In a Sam.gov notice posted Thurday, the department said the BPA will only be open to native hyperscale cloud services providers.

The department said it is going with a direct to CSP strategy because of the “highly specialized technical requirements, including massive compute elasticity (25,000+ concurrent vCPUs), proprietary 100+ tbps (terabits per second) global backbones, and specific hardware density for AI/ML, and weather modeling.”

Given those requirements, Commerce decided that only “original equipment manufacturers acting as cloud service providers” will be eligible for award. The inclusion of the OEM language effectively locks out resellers and systems integrators from competing as primes.

Commerce is using the General Services Administration’s eBuy portal to create the BPA, so any bidders will need to hold a GSA Schedule for cloud services.

The Sam.gov notice does not ask for any comments or responses. Commerce said the posting was to give notice of its cloud strategy.

In many ways, Commerce is following a strategy similar to the Defense Department and its Joint Warfighter Cloud Capability vehicle with Amazon Web Services, Microsoft, Oracle and Google Cloud.

JWCC was awarded in December 2022 and has a $9 billion ceiling. It runs through June 2028.

According to GovTribe data, 185 task orders have been awarded under JWCC. AWS has captured 77 of those, followed by Microsoft with 75. Oracle has won 19 task orders and Google follows with 14.