Jul 6, 2021 - Technology

Pentagon cancels $10 billion cloud contract awarded to Microsoft

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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