By Naomi Nix, Ben Brody and Kathleen Miller / Bloomberg
The U.S. Defense Department issued a final request for proposals for a cloud services contract valued at as much as $10 billion, opting for a winner-take-all competition that rivals say will favor Amazon.com.
The project, known as the Joint Enterprise Defense Infrastructure cloud, or JEDI, involves transitioning massive amounts of Defense Department data to a commercially operated cloud system. The initiative attracted widespread interest from technology companies struggling to catch up to Amazon in the burgeoning federal government market for cloud services.
The move follows a months-long lobbying campaign in Washington by companies including Microsoft, International Business Machines and Oracle that opposed the Pentagon’s plans for a single award rather than splitting the contract among multiple providers.
“We are looking for an industry partner who will learn with us and help us find the best ways to bring foundational commercial capabilities to our warfighters,” Dana Deasy, the Pentagon’s chief information officer, said in a statement.
In a report to Congress, the Defense Department said making multiple awards under current acquisition law would be a slow process that “could prevent DoD from rapidly delivering new capabilities and improved effectiveness to the warfighter that enterprise-level cloud computing can enable.”
The department also said it expects “to maintain contracts with numerous cloud providers to access specialized capabilities not available under the JEDI Cloud contract.”
The final request posted by the Defense Department calls for a two-year base period, followed by two three-year options and a final two-year option.
“The contract’s maximum ordering period, if all options are exercised, will be 10 years with a maximum dollar value of $10 billion,” according to documents posted by the Defense Department.
The terms of an award that competitors see as favoring Amazon comes as President Donald Trump has stepped up his criticism of the company, founder Jeff Bezos and the Washington Post, which Bezos owns.
So far, though, Trump has made no public comment on the Pentagon cloud contract.
In April, Oracle chief executive Safra Catz criticized the bidding process in a private dinner with Trump complaining that it seemed designed for Amazon to win, according to people familiar with the matter.
Trump heard her out and said he wants the contract competition to be fair, but made no indication he’d interfere in the bidding, the people said.
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