Pentagon’s Second Multibillion Cloud Contract to Be Bid in Coming Months

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Officials say the Defense Department’s multibillion Defense Enterprise Office Solutions contract is expected to be bid out in the fourth quarter of this fiscal year.

Much of the oxygen in the federal contracting community has gone to the Pentagon’s Joint Enterprise Defense Infrastructure contract in recent months, but the Pentagon is very close to bidding out a second major cloud contract that may rival it in size.

Defense officials said last month that the Defense Enterprise Office Solution acquisition, valued at approximately $8 billion, could be bid out later this month, with an expected award issued by the second quarter of 2019. The contract will have a five-year base period with five one-year options.

DEOS is the Pentagon’s attempt to “unify and modernize” some of its legacy systems, including enterprise email, collaboration services, voice and video services, messaging, content management and other productivity capabilities for more than 3.5 million users.  

Brian Herman, the Defense Information Systems Agency’s unified capabilities portfolio manager, said the Pentagon isn’t interested in developing new capabilities but rather wants to take advantage of existing commercial capabilities in use across industry today.

“Our goal is to take the capabilities that are available now, change the way we work to take advantage of these commercial services, and receive all of the upgrades and improvements that industry brings to their commercial customers,” said Herman, speaking at the Armed Forces Communications and Electronics Association’s Defensive Cyber Operations Symposium in Baltimore May 16.

In the commercial world, many companies have opted for cloud-based delivery of collaborative and email services. Delivered at scale across the Defense Department’s massive enterprise,

Herman said the approach could significantly reduce costs and improve security and efficiency. DEOS could eventually replace the Defense Enterprise Email, Defense Collaboration Services, and Defense Enterprise Portal Service, and potentially other legacy systems currently maintained by the Pentagon’s IT wing.

“We’ve had feedback from the DOD management, financial, and technical leaders. They’ve looked at the services used by [DOD agencies] and said, ‘You need to change the way you use these services. It’s no longer necessary for every application to be on your desktop. Perhaps you can have web-based access to some of these capabilities and both improve the security and reduce the cost of these capabilities,” Herman said.

DEOS will offer services through the Pentagon’s unclassified and classified networks, meaning potential bidders must have provisional authorization to operate at Impact Level 5 to bid on it. Currently, only a few cloud service providers, including Microsoft, IBM, Amazon Web Services and General Dynamics, have achieved this status.

Meanwhile, the Pentagon has not yet released a final solicitation for JEDI, which some industry estimates have pegged at $10 billion. The contract has drawn scrutiny from industry and Congress because of the Defense Department’s decision to award it to a single cloud service provider. Initially expected to be released in mid-May for industry consideration, it has been delayed indefinitely.