DoD terminates its $10 billion JEDI contract, leaving Microsoft and Amazon empty-handed

In context: If you keep up-to-date with tech news, there’s a very good chance you’ve heard of the Department of Defense’s high-profile “JEDI” contract, worth around $10 billion. The contract was initially awarded to Microsoft back in 2019, but through a series of challenges, Amazon managed to block its competitor from receiving the highly-coveted defense deal.

If the contract had panned out, Microsoft would have assisted the DoD in the development of cloud computing technology. More specifically, the defense organization wanted to replace its existing computer infrastructure with one unified, cloud-based alternative. Though the DoD claimed its contract recipient selection process was completely fair and based only on each applying company’s merits, Amazon was convinced there was something else afoot: interference from former President Donald Trump.

Unfortunately for Microsoft, Amazon has managed to stall the contract long enough to render its competitor’s 2019 victory worthless. As of yesterday, the DoD has officially canceled the contract, withdrawn it from Microsoft, and will no longer be seeking a private firm to fulfill its terms.

Strangely, the DoD does not mention Amazon’s challenges at all in its official cancelation announcement. Instead, the defense group cites “evolving requirements, increased cloud conversancy, and industry advances” as major reasons for JEDI’s termination. Whether that’s truly the case or just an attempt to save face, we cannot say.

At any rate, both Amazon and Microsoft have offered statements on the DoD’s decision. Microsoft’s is rather lengthy and comes in the form of a full-length blog post, which you can read here. The following excerpt summarizes the company’s opinion nicely, however:

We understand the DoD’s rationale, and we support them and every military member who needs the mission-critical 21st century technology JEDI would have provided. The DoD faced a difficult choice: Continue with what could be a years-long litigation battle or find another path forward. The security of the United States is more important than any single contract, and we know that Microsoft will do well when the nation does well.

Amazon, on the other hand, had this to say:

We understand and agree with the DOD’s decision. Unfortunately, the contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement. Our commitment to supporting our nation’s military and ensuring that our warfighters and defense partners have access to the best technology at the best price is stronger than ever. We look forward to continuing to support the DOD’s modernization efforts and building solutions that help accomplish their critical missions.

All is not lost for the feuding tech giants. In lieu of the JEDI contract, the DoD is planning to entertain proposals for a new “Joint Warfighter Cloud Capability” contract (we aren’t sure how much it will be worth). The DoD is only considering Amazon and Microsoft for now, but it will perform market research to see if any other firms might be capable of handling the workload.

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