Jul 6, 2021 - Technology

Pentagon cancels $10 billion cloud contract awarded to Microsoft

Yacob Reyes

Pentagon — Photo: Bill Clark/CQ Roll Cal

The Department of Defense announced Tuesday it was canceling the massive cloud contract awarded to Microsoft in 2019, saying it "no longer meets its needs."

Why it matters: The JEDI contract was the largest-ever of its kind, with an estimated value of roughly $10 billion over a 10-year stretch. The deal, initially intended to modernize the Pentagon's IT operations, was the subject of a drawn-out legal battle with Amazon and Microsoft.

Amazon filed a lawsuit in 2019 claiming that former President Trump had a bias against CEO Jeff Bezos that influenced the Pentagon's decision to award the contract to Microsoft.
The Pentagon reaffirmed its decision to award the contract to Microsoft in September 2020.

What they're saying: "One contract has never, and will never, define our relationship with the DoD or any customer. Our decades-long partnership with the DoD will continue — and we stand ready to support our nation’s men and women in uniform as they address our national security needs," Microsoft said in a statement.

What to watch: In a press release, the Pentagon said it is still seeking an enterprise-scale cloud capability and announced a new multivendor contract, which both Microsoft and Amazon will be asked to bid for.

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Pentagon cancels $10 billion cloud contract awarded to Microsoft

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