Microsoft, Amazon set to bid for $10B Pentagon cloud computing deal

The selection seemingly pushes IBM Corp and Oracle Corp outside the competition for the Defense Department’s contract

The U.S. Department of Defense has reportedly confirmed that Microsoft Corp and Amazon.com Inc have been chosen to compete for Pentagon cloud computing services as a part of a contract that could be worth around $10 billion.

Sources familiar with the matter informed that Microsoft and Amazon have been extensively viewed as leading candidates because they have gained higher-level of federal security clearances, besides meeting the minimum requirements for the Joint Enterprise Defense Infrastructure Cloud (JEDI) project.

The Joint Enterprise Defense Infrastructure cloud or JEDI is mainly used to serve as the primary data repository for the military services globally.

The selection seemingly pushes IBM Corp and Oracle Corp outside the competition for the contract for JEDI. Apparently, the contract is part of Pentagon’s efforts to broadly modernize its information technology systems.

Sources mentioned that Microsoft, Amazon Web Services, Oracle, and IBM were considered prime candidates for the contract. However, AWS at the time was the only sole company which was approved by the government to handle secret and top-secret data.

The Pentagon had initially mentioned that it would choose a winner this month but because of the size and complexity of the deal, an ongoing investigation, and potential protest litigation, the contract will likely be awarded in mid of July, a department spokeswoman, Elissa Smith said.

Sources further informed that Pentagon had disclosed in February it was assessing new information about possible conflicts of interest which are associated with the procurement that involved Deap Ubhi, a previous employee at a high-level Pentagon technology unit.

Smith also mentioned that the investigation of the department determined there is no unfavorable impact on the integrity of the acquisition process. Along with this, Pentagon will request the court to lift a stay in the case that it had asked to review the accusations.