The Defense Department on Tuesday abruptly canceled a 10-year, $10 billion cloud-computing contract it awarded to Microsoft Corp., which had sparked a flurry of legal action from Amazon.com Inc.
“Due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs,” the Pentagon said in a statement, casting the future of the Joint Enterprise Defense Infrastructure, or JEDI, into limbo.
The Pentagon added it still requires enterprise-scale cloud capability and announced a new multi-vendor contract called the Joint Warfighter Cloud Capability. It plans to only solicit proposals from Microsoft
because they are the only cloud service providers that meet its Defense Department criteria.
“One contract has never, and will never, define our relationship with the DoD or any customer,” Toni Townes Whitley, Microsoft’s president of U.S. regulated industries, said in a blog post. “Our decades-long partnership with the DoD will continue — and we stand ready to support our nation’s men and women in uniform as they address our national security needs.”
Amazon and the Defense Department were not immediately available for comment.
Shortly after the Defense Department awarded the highly-coveted JEDI contract to Microsoft in 2019, besting Amazon Web Services, Amazon filed a lawsuit in the U.S. Court of Federal Claims protesting the JEDI decision. The e-tailer argued former President Donald Trump’s contempt for Amazon Chief Executive Jeff Bezos, who also owns the Washington Post, unfairly influenced the Pentagon’s award of the deal to Microsoft.
In April 2020, the Pentagon inspector general ruled the award was not tainted by the White House. In April 2021, the U.S. Court of Federal Claims decided not to dismiss Amazon’s protest. “The record of improper influence by former President Trump is disturbing, and we are pleased the court will review the remarkable impact it had on the JEDI contract award,” Amazon Web Services said in a statement then.
Microsoft shares declined during Tuesday’s session, falling from a gain on the day before the announcement to a loss of about 0.5%. Amazon shares were trading more than 3% higher, and hit an all-time intraday high of $3,645.
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