Microsoft has won the U.S. Pentagon’s $10 billion cloud computing contract, the Defense Department said on Friday, beating out Amazon.com.
The Joint Enterprise Defense Infrastructure Cloud (JEDI) contract is intended to help bring American military technology into the modern era. The Defense Department is investing in commercial cloud services, which host computing power and storage in remote data centers, to improve data security and speed up real-time sharing of information across the military.
The Pentagon said the contract was expected to be completed by 2029.
"This continues our strategy of a multi-vendor, multi-cloud environment as the department’s needs are diverse and cannot be met by any single supplier. This contract will address critical and urgent unmet warfighter requirements for modern cloud infrastructure at all three classification levels delivered out to the tactical edge," the Defense Department said.
The process cleared review by the GAO and Court of Federal Claims. DOD said that at the outset the competition included four different offerors. "All offerors were treated fairly and evaluated consistently with the solicitation’s stated evaluation criteria. Prior to the award, the department conferred with the DOD Inspector General, which informed the decision to proceed," the DOD added.
The base contract period is two years with a $1 million guarantee. The department projects that user adoption will drive an estimated $210 million of spending during the two year base period. The DOD said it would review contract performance prior to the exercise of any options.
In a statement, an Amazon Web Services (AWS) spokesman said the company was “surprised about this conclusion.”
The company said that a “detailed assessment purely on the comparative offerings” would “clearly lead to a different conclusion,” according to the statement.
The Pentagon said it had awarded more than $11 billion across 10 separate cloud contracts over the past two years.
The contracting process had long been mired in conflict of interest allegations, even drawing the attention of President Donald Trump, who has publicly taken swipes at Amazon and its founder Jeff Bezos.
Oracle had expressed concerns about the award process for the contract, including the role of a former Amazon employee who worked on the project at the Defense Department but recused himself, then later left the Defense Department and returned to Amazon Web Services.
Oracle and International Business Machines Corp. waged a lobbying and legal campaign over the decision to choose just one provider, arguing it would imperil the Pentagon’s data and stiffle innovation. Both companies were later eliminated from the competition.
Alphabet Inc.’s Google, another large cloud provider, withdrew from consideration last year amid employee concerns over the company’s ties to defense contracting.