Pentagon scraps $10-billion cloud contract with Microsoft

Washington: In a significant development, the US Department of Defense on Tuesday announced that it is calling off the controversial $10 billion cloud contract that was the subject of a legal battle involving Amazon and Microsoft.

The JEDI or Joint Enterprise Defense Infrastructure deal has become one of the most tangled contracts for the Department of Defense.

According to a report in CNBC, the Pentagon said that the JEDI Cloud contract no longer meets its needs due to evolving requirements, increased cloud conversancy, and industry advances.

The JEDI contract was meant to modernise the Pentagon's IT operations for services rendered over 10 years.

The Pentagon said in a statement that it still needs enterprise-scale cloud capability and has announced a new multi-vendor contract known as the 'eJoint Warfighter Cloud Capability'.

The agency said, "it plans to solicit proposals from both Amazon and Microsoft for the contract".

Amazon and Microsoft did not respond immediately to the Pentagon decision.

A year after Microsoft was awarded the $10 billion JEDI cloud computing contract, Amazon in December last year decided to pursue its legal battle challenging the decision, asking a US judge to set aside the award to Microsoft.

After Microsoft was awarded the decade-long contract, Amazon cloud computing business arm, Amazon Web Services (AWS), filed a bid protest directly to the Department of Defense (DoD), challenging the decision.

The company vowed to continue its protests after the Department of Defense reaffirmed in September that it did a re-evaluation of the contract proposals and found that Microsoft has won the contract.

AWS in a court filing attacked the re-evaluation process.

Amazon believed that the re-evaluation process was highly flawed and subject to undue pressure from US President Trump.

AWS said that the DoD's re-evaluation was "nothing more than an attempt to validate a flawed, biased, and politically corrupted decision."