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Amazon lawyers said that Trump “used his power to ‘screw Amazon’ out of the JEDI Contract," and, much like their competitor Oracle, filed a suit against the decision with the US Court of Federal Claims.
- Microsoft Corp. had this deal for a contract called the Joint Enterprise Defense Infrastructure (JEDI) with the Pentagon for US$10 billion. Now, they have to share the contract and money with their competitor, Amazon Inc.
- While that sounds like a bad Star Wars fan-fic, it’s true, complicated, and the history of this contract has caused a lot of controversy.
What is JEDI?
- JEDI is an important contract that the Pentagon set up with Microsoft back in 2019.
- In September 2017, the United States Department of Defense (DoD) announced a US$10 billion cloud contract that would last 10 years called JEDI.
- JEDI was a contract that requested a pretty big task; they wanted a company to build out its private cloud services.
- Basically, the contract was asking for a more secure and private Google drive and communications hub that would be inaccessible to the public.
- The Pentagon, which is just another name for the US DoD, also announced that this contract would be up for bidding, and with that announcement, the bidding wars between tech companies began.
The war for JEDI begins
- As soon as the contract was announced, all of the largest tech companies in the US said they were interested in the project. This included Amazon, Google LLC, Microsoft and Oracle Corp.
- Many considered Amazon to be the clear front-runner since the company had one of the largest cloud-services in the country through Amazon Web Services (AWS).
- In February 2018, Oracle filed a lawsuit saying that the Pentagon’s contract was basically trying to monopolize cloud services for the military, and that Amazon had cheated by hiring two former members of the Pentagon.
- One member of the Pentagon, Deap Ubhi, who was involved in the contract negotiations, was also a former Amazon employee that had tweeted out, “Once an Amazonian, always an Amazonian” in 2017.
- The lawsuit prompted the US Court of Federal Claims to delay the contract award until August 2018 as investigations were held.
How did Microsoft win the contract?
- With only three days left before bids were expected to be due, Google decided to step away from the bidding war due to a mass protest from Google employees who did not want to work with the military.
- “While we are working to support the US government with our cloud in many areas, we are not bidding on the JEDI contract because first, we couldn’t be assured that it would align with our AI Principles and second, we determined that there were portions of the contract that were out of scope with our current government certifications, “a Google spokesperson said.
- Since Google was out of the picture, the race was primarily being held between Oracle, Amazon and Microsoft, but Oracle’s previous filings against Amazon also revealed the company’s political ties.
- For many, the war between Oracle and Amazon was nothing more than the war between Oracle-ally Donald Trump and Amazon founder Jeff Bezos, because the two men had a bitter feud with each other over the course of Trump’s presidency.
- While the conflict between these two companies continued, Microsoft ended up taking the contract and stated that they were “an integral partner in DoD’s overall mission cloud strategy.”
Why is Microsoft losing the contract now?
- Well, it shouldn’t be hard to imagine that Jeff Bezos was not too happy about losing out on a US$10 billion dollar contract.
- Amazon lawyers said that Trump “used his power to ‘screw Amazon’ out of the JEDI Contract," and, much like their competitor Oracle, filed a suit against the decision with the US Court of Federal Claims.
- For a while, it seemed like Microsoft had won the contract and that was that, but everything changed for the company in February 2020.
- Microsoft’s new system was supposed to go live on February 14, 2020, but after claiming that Amazon had a reasonable argument, federal judge Patricia Campbell-Smith stopped the system from going live just one day before.
- While the Pentagon eventually decided to keep working with Microsoft, the company was never able to launch the cloud services after being delayed.
What happens now and what comes next?
- After months of legal battles between some of the largest tech companies in the world, “At last, the JEDI are no more.”
- The Pentagon decided to cancel the JEDI contract on July 6, 2021 due to Microsoft’s now 3-year-old bid being outdated, and instead, put in place a new contract.
- A new program called the “Joint Warfighter Cloud Capability" replaced the former contract, and, rather than have one company conduct all of the cloud services for the entire DoD, this new program would use several vendors to build the service.
- For the time being, it looks as if Amazon and Microsoft are going to be working together on this project for the Pentagon, but officials speculate that Oracle still wants a piece of the billion dollar pie.
- While a number hasn’t been attached to the new program yet, it is expected to be worth billions and last only five years. The contract award will be announced in Spring 2022.
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