Pentagon opens competition for $10 billion cloud contract

[July 27, 2018]  By Kara Carlson

(Reuters) - The U.S. Department of Defense opened the competition for its highly anticipated $10 billion cloud computing services contract on Thursday, an opportunity awaited by bidders that include Amazon, Microsoft Corp and Oracle <ORCL.N>, among others.

The Pentagon's Joint Enterprise Defense Infrastructure, or JEDI, cloud computing solution contract is part of the Department of Defense's broad IT modernization effort.

The Pentagon's request for proposals asked for a single company to help the Department use cloud computing on a far wider scale, calling the contract a "critical first step in the DoD's overall cloud environment."

Ellen Lord, the Pentagon's under secretary for Acquisition and Sustainment, said it is seeking a "secure information environment that spans the homeland to the global tactical edge and can rapidly access computing and storage capacity to address warfighting challenges."

The request stipulated that the contract could be worth as much as $10 billion over a 10-year period. One change in the new proposal was an increase in the number of reasons the Pentagon could use to cancel the deal, as well as an increase in the number of occasions it can exit the contract.

Amazon Inc's Amazon Web Services, or AWS, IBM, Microsoft Corp and Oracle Corp are considered frontrunners for the contract, according to industry executives. AWS is currently the only company approved by the government to handle secret and top secret data.

The Pentagon is seen in this aerial photo from the Air Force One in Washington, DC, U.S., March 29, 2018. REUTERS/Yuri Gripas/File Photo

Congress has expressed concern over the size and duration of the contract and had asked for a justification for it to be structured to provide for a single award winner versus multiple cloud computing contract awards.

The Pentagon defended the process, saying the deal's initial two-year period allows for "sufficient time" to ensure the contract is up to standards. It added that new contractors will be needed for other cloud computing demands over the 10-year period.

(Reporting by Kara Carlson; Editing by Dan Grebler)

[© 2018 Thomson Reuters. All rights reserved.]

Copyright 2018 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.