Tech Companies Jockey as Pentagon Says Cloud Contract Coming
(Bloomberg) -- More than a month after the Pentagon initially planned to release a final call for proposals on its multibillion-dollar cloud computing contract, Defense Department officials are still working on requirements eagerly anticipated by companies including Amazon.com Inc. and Oracle Corp.
Dana Deasy, the Pentagon’s new chief information officer, said Wednesday that publication of a final request for proposals isn’t far off, but added that the Defense Department shouldn’t worry about arbitrary deadlines to get it out either. He also said the Pentagon is conducting a full review of the project, without giving more details.
“We have a bit more work to do before we release,” Deasy said at a defense technology conference in Washington’s Virginia suburbs. “This is not about making a certain date to get an RFP out.”
While the Pentagon tinkers with its plans, tech companies continue jockeying for a piece of the multibillion-dollar contract. The effort, known as the Joint Enterprise Defense Infrastructure cloud, or JEDI, involves transitioning massive amounts of Defense Department data to a commercially operated cloud system. Plans are for a two-year contract and two options that may add as many as eight years to the initial award.
The Defense Department initially delayed final publication of its request for proposals, saying it didn’t want to “rush toward failure,” but that move also came after many companies expressed objections to its plan for a winner-take-all award they say will favor Amazon, the leading provider of cloud computing services.
“It was a pretty big lift,” Bloomberg Intelligence analyst James Bach said of the Pentagon’s initial time frame for the cloud computing contract. “No matter what’s going on now, it’s not unsurprising that an RFP is going to be pushed back.”
Companies such as Oracle, Microsoft Corp. and International Business Machines Corp. have protested Pentagon plans for a winner-take-all contract, saying it would stifle innovation and raise security risks. The loose coalition has lobbied lawmakers, Pentagon officials and the White House in the last few months.
The Defense Department said in a report to Congress in May that scattering data “across a multitude of clouds” would inhibit “the ability to access and analyze critical data,” and the “lack of a common environment for computing and data storage” would limit the effectiveness of machine learning and artificial intelligence for warfighters.
Some tech companies are hopeful that Deasy, who spoke before the House Oversight and Government Reform Committee in May about his support for multivendor cloud ecosystems, will change the direction of the project. Deasy previously worked as global chief information officer for JPMorgan Chase & Co. at a time when the company made major investments to transition to a commercial cloud.
On Wednesday, Deasy said the Pentagon as a whole is committed to using multiple cloud platforms, but he didn’t appear to be signaling plans to change the Jedi contract specifically.
Once the final version of the Pentagon cloud request is issued, companies may still challenge its terms before the Government Accountability Office or in the courts. The Defense Department said in May that it was weighing more than 1,000 industry comments submitted in response to a draft request for proposals.
Delaying the release of the contract requirements gives the Pentagon “time to ingest all of the concerns from industry,” Bach, the analyst, said. “They can bulletproof the RFP to make sure it doesn’t get further delayed.”
The Defense Department has said it’s transitioning at least some of the department’s technology needs -- including some 3.4 million users and 4 million devices -- to a commercial cloud to give it a tactical edge in the battlefield and strengthen its use of emerging technologies.
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