In a 313-page review of the Department of Defense's cloud acquisition process, the agency's watchdog concluded the decision to award the $10 billion contract to a single source, request for proposal requirements and source selection process were reasonable and met Defense Department procurement standards.
The Inspector General found flaws with the agency's disclosure of unredacted, proprietary information of bidding contractors for the Joint Enterprise Defense Infrastructure (JEDI) Cloud contract. The DOD "improperly disclosed" Microsoft's proprietary information to Amazon Web Services, which "it should not have received," according to the report. Through the disclosure, the agency "potentially provided AWS an unfair advantage in the cloud services marketplace."
A lingering question in the report was whether the White House influenced the cloud procurement process, though the IG was barred from fully reviewing the issue because of an asserted "presidential communications privilege." However, the IG said evidence shows the DOD personnel who awarded the contract to Microsoft "were not pressured" by any senior agency leaders who may have had White House communication.
The report is a review of statements, documents and ethical decisions related to the JEDI contract. As part of the report, the IG found a number of individual ethical violations, including evidence of a Pentagon official, Stacy Cummings, who owned stock in Microsoft, yet was part of the procurement process.
Officials combed over the contract to answer the key question, was the process fair?
The scrutiny is warranted — it's a 10-year, multibillion dollar contract that will dictate the future of the Pentagon's technology stack. The contract will serve as the backbone for more advanced technologies, all in the name of national security and defense.
It's high stakes and gives the contract winner — in this case Microsoft — an edge in the market dominated by Amazon Web Services.
The IG review, which began in June 2019, falls outside of the bid protest process, which is currently going through the U.S. Federal Claims Court. The DOD wants to "reconsider its award decision" to Microsoft, according to court documents filed last month, paying close attention to the technical aspects of the contract.
The contract is a battle between two giants — entrenched in the market. The reputational impacts go a long way and the outcomes could dictate future contract awards, whether in the public or private sectors.