The Joe Biden administration has scrapped the controversial $10 billion defence cloud-computing project awarded to Microsoft by the Trump regime and will invite fresh bids, which brings Amazon back in contention to win the prestigious contract.
Amazon is the biggest cloud computing company and was widely expected to win the contract. But the Trump administration awarded the single-vendor deal to Microsoft in 2019. The contract had come as a huge gain for Microsoft which has been a late starter in cloud computing and is trying to catch up with arch rival Amazon in the segment.
Amazon was seen to have lost out due to then President Donald Trump’s intense dislike for Amazon-founder Jeff Bezos. Trump had publicly criticised Jeff Bezos and often derisively referred to him as “Jeff Bozo.”
Amazon alleged in 2019 that the Pentagon decision was full of "egregious errors” due to pressure from Trump and pointed out that he had been quoted in a book that year, telling Defence Department officials not to give Amazon the contract.
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Amazon had filed a lawsuit challenging the decision to give the Joint Enterprise Defense Infrastructure Cloud (JEDI) contract to Microsoft and obtained a stay on the deal.
While the Trump administration had gone for a single company, the Biden administration has indicated that it would likely farm out the project to multiple firms.
Other top cloud companies that are expected to get into the race to get a slice of the pie are Oracle Corp, Google and IBM Corp. Google and IBM on Tuesday said they were both interested in working with the federal government but did not confirm whether they would participate in the bidding process.
The Pentagon hopes to have the first awards by April 2022 for its new Joint Warfighter Cloud Capability (JWCC).
John Sherman, acting chief information officer for the Defense Department, said he expects both Microsoft and Amazon will get cloud contracts.
Microsoft said in a statement the company was confident it will "continue to be successful as the DoD selects partners for new work".
Amazon Web Services (AWS) said it agreed with the Pentagon's decision to cancel the contract. The Jeff Bezo-founded tech giant said the initial 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." The company said it looks forward to continuing support to the DoD’s modernization efforts and building solutions that help accomplish their critical missions."
There are indications that the size of the new contract may exceed $10 billion.
"We don't have an estimate yet, but I wouldn't latch on to the $10 billion figure… the plan would likely involve a direct award for "urgently needed" capabilities and then a "full and open" competition for multiple suppliers by early 2025, a Reuters report from Washington quoted Sherman as saying.
