The Pentagon may axe its $10 billion JEDI cloud-computing contract with Microsoft because of endless litigation from Amazon, a report says

The Pentagon may axe its $10 billion JEDI cloud-computing contract with Microsoft because of endless litigation from Amazon, a report says
Microsoft CEO Satya Nadella and Amazon CEO Jeff Bezos.SAJJAD HUSSAIN/AFP via Getty Images
  • The Pentagon may pull its $10 billion cloud-computing JEDI defense contract with Microsoft, the WSJ reported.
  • The contract has been swamped with litigation from Amazon since Microsoft was awarded it in 2019.
  • The contract was to store and manage sensitive military and defense data.

Officials at the Pentagon are reportedly considering ending the Joint Enterprise Defense Infrastructure (JEDI) contract it has with Microsoft in light of endless litigation from Amazon, according to a Wall Street Journal report.

In October 2019, the Department of Defense (DoD) awarded Microsoft its JEDI contract, valued at up to $10 billion, to store and manage sensitive military and defense data.

Amazon Web Services (AWS), the cloud arm of Amazon which sought the contract for itself, has challenged the decision ever since, alleging political intervention from former President Donald Trump.

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"We are going to have to assess where we are in regards to the ongoing litigation and determine what the best path forward is for the department," deputy Pentagon press secretary Jamal Brown told the Associated Press on Monday.

A Pentagon report to Congress on January 28 said another AWS win in court could delay the implementation of the JEDI program for even longer, per the Journal.


Read more: Someone pretending to be a Microsoft employee filed a fake complaint about the $10 billion JEDI cloud deal Amazon claims it deserves

"The prospect of such a lengthy litigation process might bring the future of the JEDI Cloud procurement into question," the report said.

AWS first filed a protest against Microsoft's victory in the battle for the contract in November 2019. The company alleged that President Donald Trump improperly influenced the Pentagon to stop the contract being awarded to Amazon because of his feud with its CEO Jeff Bezos, who also owns The Washington Post.

Trump had previously accused Bezos of letting the Post publish what he considered to be unfavorable coverage of his administration.

Last month, the Pentagon tried to dismiss Amazon's challenge of the contract award, but it failed.


JEDI contract should involve more companies

Lawmakers and government-contracting experts told the Journal that the JEDI contract should be pulled because having a single company, such as Microsoft, controlling the program was an insufficient and outdated model.

They told the Journal the DoD should include multiple companies in the contract, which would reduce the chance of legal battles from excluded companies.

Microsoft said in a statement to the Journal: "We agree with the US [government] that prolonged litigation is harmful and has delayed getting this technology to our military service members who need it.

"We stand ready to support the Defense Department to deliver on JEDI and other mission critical DoD projects."

Amazon did not comment for the Journal's report.