After Two Years, JEDI is Finally Underway

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The second year of competition for the Pentagon’s controversial cloud contract was as dramatic as the first.

The Pentagon’s high-profile Joint Enterprise Defense Infrastructure cloud contract is right back where it was one year ago: tied up in litigation.

The circumstances have changed in the past calendar year, with Microsoft winning JEDI in October and former favorite to win the contract, Amazon Web Services, protesting the decision in the U.S. Court of Federal Claims.

At best, the Defense Department and Microsoft cannot begin work until at least mid-February, putting the Pentagon more than a year behind its initial schedule for JEDI. An internal JEDI strategy document released in November 2017 sought a JEDI award in fourth quarter of 2018 and migrations to the cloud platform by the beginning of 2019.

And yet, what unfolded in 2019 was high drama in the federal contracting world over an improbably high-profile government contract.

The year began with Oracle, a one-time contender for JEDI, seeking to stop the Pentagon’s plan to award JEDI to a single cloud provider with a federal lawsuit. Oracle’s arguments alleged improper ties between Amazon and the Defense Department, and the case had a material impact on JEDI’s timeline.

In February, allegations made by Oracle prompted the Defense Department to investigate whether an Amazon employee who previously worked at the Pentagon improperly impacted the integrity of the JEDI procurement. During the period, lawyers representing the Defense Department asked for a stay on the case, essentially freezing JEDI activity while the investigation unfolded.

On April 10, the Pentagon announced the results of its investigation: The employee’s actions didn’t jeopardize the JEDI competition. The department also narrowed the field of competitors, tossing out bids from IBM and Oracle for not meeting its competitive range determination. The decision left the Pentagon to review bids from Microsoft and Amazon while the department’s top tech officials spoke publicly about the dire need for enterprisewide cloud computing.

Oracle was dealt another blow when in July, after its eight-month court case, a judge ruled in favor of the Pentagon. Oracle later appealed the decision and the case remains in litigation.  

Days after Oracle lost its lawsuit, President Trump brought JEDI into the national spotlight when he referred to the contract in conversations with reporters during a July 18 meeting with the prime minister of the Netherlands. Trump told reporters he had heard complaints from Oracle, IBM and Microsoft and said he wanted to review it.

“They’re saying it wasn’t competitively bid,” Trump said. “I never had something where more people are complaining. 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 with so much complaining.”

Many lawmakers, including several Republicans on the House Armed Services Committee, immediately warned Trump to stay out of the contracting process. However, other influential Republicans launched themselves into it. In a June appearance on Tucker Carlson’s show on Fox, Rep. Mark Meadows, R-N.C., called for an investigation into JEDI, and Sen. Ron Johnson, who chairs the Senate’s Homeland Security Committee, penned a letter in late June asking acting Defense Secretary Mark Esper to hold off on awarding JEDI.  

On Aug. 1, newly-confirmed Defense Secretary Mark Esper did push pause on JEDI, putting the contract under indefinite review. Despite the review, Pentagon officials continued making the case for JEDI throughout August in a series of appearances, including a press briefing at the Pentagon Aug. 9.

“We needed enterprisewide cloud yesterday,” Lt. Gen. Jack Shanahan, who heads the Pentagon’s Joint Artificial Intelligence Center, told reporters.

On Oct. 22 as his review concluded, Esper recused himself from the JEDI contract due to his son’s employment at IBM. The following Friday, as the Washington Nationals hosted the Houston Astros for game 3 of the World Series, the Pentagon announced it awarded Microsoft JEDI, charging the company with building a global cloud infrastructure for classified, sensitive military data. The base contract period for JEDI is two years with $1 million guaranteed to Microsoft though the department projects the cloud’s users will spend an estimated $210 million during that time. If all options are exercised over the total 10-year period, it could be worth as much as $10 billion.

Of course, the award didn’t conclude the JEDI saga.

Amazon cited “political influence” in its lawsuit seeking to overturn the Pentagon’s award to Microsoft, alleging Trump’s public remarks swayed the Pentagon’s JEDI decision-makers. Top officials at the Pentagon pushed back against allegations of improper influence, but JEDI’s fate as a contract probably won’t be known until at mid-February.

According to court documents, the Defense Department has agreed not to move forward with substantial work under JEDI until Feb. 11, signaling the court may come to a decision quicker in this case than occurred in Oracle’s.

However, top officials from Microsoft and the Defense Department met Dec. 11-13 for preparatory discussion and Defense Department CIO Dana Deasy said Dec. 12 that as many as 14 Defense agencies could pilot JEDI in the coming months. On the same day, Microsoft received an important temporary accreditation from the Defense Information Systems Agency that allows the tech giant to host data classified as secret for the next 90 days.

Congress, too, appears to be onboard with JEDI despite previously adding red tape to slow roll the project through appropriations. In its latest funding bill, Congressional appropriators removed restrictions that would have prevented the Defense Department from using funds to migrate data and applications to JEDI. If the JEDI case is resolved, the Defense Department will have money to begin operations. 

What will 2020 bring for JEDI? Legal filings in Amazon’s case indicate that the Pentagon wants to move swiftly “in light of the urgent need for these services in support of the national security interests of the United States.”