The giant and groundbreaking IT contract may cover just a fraction of the cloud-services orders to come.
The Joint Enterprise Defense Infrastructure cloud contract is just one slice of the Defense Department’s potential cloud business, according to Deputy Defense Secretary Patrick Shanahan.
Shanahan told reporters Tuesday at a Defense Writers Group breakfast in Washington that the single-award JEDI contract “represents less than 20 percent” of the Defense Department’s capacity for cloud computing.
Multiple providers would ultimately compete for various contract vehicles to provide all the other cloud services that don’t fall under the JEDI umbrella, he said.
“What I learned over time in industry is you always have to have multiple suppliers of everything that you do. So two is better than one. Three is better than two,” said Shanahan, who formerly served as an executive at Boeing.
In September, Shanahan created the Defense Department’s Cloud Executive Steering Committee and tasked it with accelerating cloud adoption across the department. The committee unveiled a draft request for proposal for JEDI in March that indicated the Pentagon planned to award the contract—for enterprisewide cloud infrastructure- and platform-as-a-service—to a single company. Industry groups and certain companies have argued against a single-award contract, suggesting a multiple-award strategy is more resilient and secure. Trade groups also suggested the competition may tilt toward Amazon Web Services, which has a similar commercial cloud contract with the CIA.
“If you ask me to connect the dots, I think people extrapolate [that] CIA has done business with Amazon and so it must mean that maybe the [Defense Department] will do business with Amazon. But I haven’t seen a dot that really connects [JEDI] to Amazon,” Shanahan said.
“The approach here has been really around a fair and open competition,” he said. “What I’ll make clear is in the department, we want to create long-term, strong industrial partnerships, but we want multiple partnerships.”
Shanahan called artificial intelligence one of many emerging capabilities that the Defense Department will only fully realize with a “broad, strong technical base that competes.”
“It’s not in our interest to just award something to someone because they’ve already done business with government,” he said.
Multiple reports have pegged JEDI as worth up to $10 billion over 10 years, yet Shanahan said a ceiling value for the contract has not yet been assigned. He said the initial JEDI contract would be two years, with five-year and three-year options the Defense Department could exercise if it finds the contractor’s performance satisfactory.
“So if it’s working, extend it,” Shanahan said. “If it’s not working, here are the keys, thank you. This is about, for us, preserving options creating competition and scale, but also moving quickly.”
The Defense Department is on a cloud binge as of late. In February, milCloud 2.0, an on-premise cloud purchased through a $500 million contract with CSRA, went live. Last week, the Pentagon released a draft RFP for its Defense Enterprise Office Solution cloud contract, which contracting documents state has an $8 billion ceiling over 10 years. DEOS will also be awarded to a single company or team of companies.