Pentagon Cancels the Military Contract

The Defense Department said Tuesday that it would not go forward with a lucrative cloud-computing contract that had become the subject of a controversial legal battle amid claims of interference by the Trump administration. The Pentagon already warned about Trump’s interference.The Pentagon had warned Congress in January that it might walk away from the contract if a federal court agreed to consider whether former President Donald Trump interfered in a process that awarded the $10 billion contract to Microsoft over rival Amazon, saying that the question would result in lengthy litigation and untenable delays.

The Defense Department said in a news release Tuesday that the contract for the Joint Enterprise Defense Infrastructure, known as JEDI, no longer meets its needs but it added that it would solicit bids from Amazon and Microsoft on future cloud-computing contracts. The statement made for a quiet end to years of legal clash and duelling technology claims over what many considered to be the marquee agreement for providing cloud-computing services to the federal government.

A senior administration official said that soon after the Biden administration took office, it began a review that quickly concluded that the costly arguments over JEDI had been so long that the system would be outdated as soon as it was deployed.The company said that with the shifting technology environment, it has become clear that the JEDI cloud contract, which has been long delayed, no longer meets the requirements to fill the DoD’s capability gaps. Instead, the proposed a new cloud architecture called the Joint Warfighter Cloud Capability. The company made clear that only Microsoft and Amazon Web Services could build it.

The Pentagon announcement suggested that it would buy technology from both companies, rather than awarding one large contract to a single provider, as it had for JEDI. Security concerns also played a role in the decision to seek cloud services from multiple companies, officials say. Recent breaches of cloud services have made it clear that there are vulnerabilities, and the Pentagon did not want to be dependent on one company for its technology.