The Department of Defense wants to "reconsider its award decision" to Microsoft for the Joint Enterprises Defense Infrastructure contract following technical challenges from Amazon Web Services, according to U.S. Federal Claims Court documents filed Thursday.
The Pentagon requested 120 days to reconsider technical aspects of the contract, which is valued at up to $10 billion over 10 years.
The agency wants to put the court proceedings on hold during the remand because "reconsideration could change the DoD's reasoning or result," according to the filings.
The request comes a week after Judge Patricia Campbell-Smith's order to temporarily halt Microsoft's work on the contract was unsealed. Requested in February, the preliminary injunction focused on Microsoft's proposed approach to application and data hosting and whether it was technically feasible.
Questions centered on price on the "containerized data analysis framework," where costs differed because AWS proposed using online storage and Microsoft said it would use storage.
AWS argued Microsoft failed to comply with the technical requirements because the DOD had requested proposals for online storage. AWS said the Pentagon should have found Microsoft's technique "unfeasible, assigned a deficiency and eliminated Microsoft from the competition," according to court filings.
As the Pentagon reassesses aspects of the award, the agency will look at revised proposals, and plans to also reconsider Microsoft's online marketplace offerings.
With an enormous contract at stake, AWS has a vested interest in eliminating Microsoft from the award competition. AWS filed a protest in December decrying the award decision, faulting the Pentagon's evaluation process, which gave the two technical stacks a "false sense of parity."
Politics also came into play, as AWS said there was "improper pressure" on the award and intervention from President Donald Trump in an effort to hurt Amazon CEO Jeff Bezos.
For now, it's a win for AWS. Work on the contract is on pause. Technical assertions will come into question and it could change the outcome of the award.
Calling the initial award flawed, an AWS spokesperson told CIO Dive, "we are pleased that the DoD has acknowledged 'substantial and legitimate' issues that affected the JEDI award decision, and that corrective action is necessary."
Microsoft said the Department of Defense made the correct decision when awarding the contract. "However, we support their decision to reconsider a small number of factors as it is likely the fastest way to resolve all issues" and provide the Pentagon the necessary technology, Frank Shaw, corporate vice president of communications at Microsoft told CIO Dive in a statement.
"Over two years the DoD reviewed dozens of factors and sub factors and found Microsoft equal or superior to AWS on every factor. We remain confident that Microsoft's proposal was technologically superior, continues to offer the best value and is the right choice for the DoD," Shaw said.