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Tech giants to share $9 billion Pentagon cloud computing contract

The JWCC is the successor to the ill-fated Jedi contract awarded to Microsoft in 2018

The Pentagon has announced that a $9 billion cloud computing contract will be split between four key industry stakeholders.  

Google, Amazon, Microsoft, and Oracle will share the Joint Warfighting Cloud Capability (JWCC) contract, which aims to modernise IT standards and enable the Department of Defense (DOD) to acquire commercial cloud services directly from providers.  

Set to run until 2028, a DoD spokesperson confirmed that the JWCC award is comprised of four separate contracts with a shared ceiling of $9 billion.  

As part of the deal, the four providers have been awarded indefinite delivery, indefinite quantity contracts, which means the deal can involve an indefinite amount of services throughout the duration.  

In a statement, the DoD said the contracts will offer “commercial pricing, or better, and streamlined provisioning of cloud services”. 

“The purpose of this contract is to provide the Department of Defense with enterprise-wide globally available cloud services across all security domains and classification levels, from the strategic level to the tactical edge,” the DoD said.  

Legal Dispute

The JWCC is the long-awaited successor to the Joint Enterprise Defense Infrastructure (JEDI) initiative which aimed to deliver a large common commercial cloud for the US Defense Department.  

Originally, the DoD awarded the contract to Microsoft. However, the process was marred by a protracted legal challenge from competing providers such as Amazon.  

Amazon accused the Trump administration of pressuring the department to overlook its application and award the contract to Microsoft due to the former president’s personal grievances with Amazon founder Jeff Bezos.  

Similarly, Oracle launched a legal challenge arguing that the decision to award the contract to a single service provider was unfair.  

The Defense Department’s Office of the Inspector General subsequently conducted a review into the procurement process for the contract.  

The watchdog said it found no evidence to support claims that the award process was influenced by “any DoD leaders more senior to them, who may have communicated with the White House".

In a statement to CNBC at the time, DoD spokesperson Lt. Col. Robert Carver said the report provided conclusive proof that the process was conducted “fairly”.  

“This report should finally close the door on the media and corporate-driven attacks on the career procurement officials who have been working tirelessly to get the much-needed JEDI cloud computing environment into the hands of our frontline warfighters while continuing to protect American taxpayers,” Carver said. 

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Despite the watchdog’s review, Amazon continued to dispute the decision to award Microsoft the $10bn contract. The prospect of a lengthy legal dispute prompted comments that the contract would have to be scrapped entirely. 

Last year, the Pentagon cancelled the Jedi contract on the grounds that it no longer met requirements. Instead, the department announced it would pursue a multi-cloud approach and would accept applications from additional vendors.  

The move closely aligns with broader business approaches to cloud services. Increasingly, organisations globally have adopted a multi-cloud approach to improve resilience and mitigate the risk of disruption due to outages at a single provider.  

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