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The Pentagon cancels Trump’s $1 billion Microsoft cloud deal to revive Amazon’s bid

The US Department of Defense cancelled its $10 billion JEDI cloud computing project on Tuesday, dragging down trump card-Time Award Microsoft Corporation And announced a new multi-supplier contract, which is expected to include its large technology competitors Amazon.

After Amazon filed a lawsuit to challenge the decision of then President Donald Trump, the contract awarded by the Pentagon at the end of 2019 was shelved.Trump publicly mocked the then Amazon CEO Jeff Bezos And criticized the company many times.

Amazon said in 2019 that the Pentagon’s decision was full of “serious errors”, believing it was the result of “improper pressure from Trump”. The company cited a 2019 book that stated that Trump had instructed the Department of Defense to “exclude Amazon from the JEDI contract.”

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The judge halted the Pentagon’s deal with Microsoft

Judge suspends Pentagon’s deal with Microsoft-February 13, 2020

Just in September, the Department of Defense re-evaluated the contract proposal and stated that Microsoft’s submission was the best.

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In the new Biden The Pentagon said on Tuesday that Amazon and Microsoft are the only companies that can meet the department’s requirements, but later pointed out that if they also meet government standards, they will contact other cloud providers within the next three months.

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Other top cloud companies include Oracle, Alphabet’s Google, and IBM.

The Pentagon hopes to receive the first award for its new Joint Combatant Cloud Computing Capability (JWCC) by April 2022.

John Sherman, the acting chief information officer of the Department of Defense, said he expects both Microsoft and Amazon to be awarded cloud contracts. He said the need is urgent.

“I have to get this now—as soon as possible—hopefully starting in April as soon as possible,” Sherman said.

After the news, Microsoft’s stock price fell 0.5%, while Amazon’s stock price rose more than 4% and hit a record high.

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Microsoft said in a statement that the company is confident that “it will continue to be successful as the Department of Defense selects a partner for the new job.” Sherman said that Microsoft can submit a termination bid to recover the cost of abandoned projects.

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Amazon did not immediately comment.

The now cancelled Joint Enterprise Defense Infrastructure Cloud (JEDI) contract has a budget of $10 billion and is part of the Pentagon’s broader digital modernization, aimed at making it more technically flexible.

“We haven’t estimated it yet, but I won’t lock in the $10 billion figure,” Sherman said.

“The plan may be as early as early 2025 for multi-cloud procurement through full and open competition. However, in the near term, we believe that the direct grant path is absolutely necessary and appropriate so that we can integrate the cloud capabilities of the much-needed enterprise force “Sherman said.

(Reporting by Diane Bartz, David Shepardson and Doina Chiacu; Editing by Chris Sanders and Lisa Shumaker)

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