DoD upholds JEDI award to Microsoft

Defense officials say they re-evaluated revised proposals from Amazon and Microsoft, but ultimately wound up re-affirming October's original award to Microsoft.

The Pentagon said Friday it’s sticking with its original decision to award the multibillion dollar JEDI Cloud contract to Microsoft, six months after telling a federal court it wanted to reconsider the original award to fix alleged irregularities in the source selection process.

In a statement, the department said it had conducted a “comprehensive re-evaluation” of the JEDI proposals and had “determined that Microsoft’s proposal continues to represent the best value to the government.”

“While contract performance will not begin immediately due to the preliminary injunction order issued by the Court of Federal Claims on February 13, 2020, DoD is eager to begin delivering this capability to our men and women in uniform,” the statement read.

A department spokesman told Federal News Network that DoD source selection officials conducted a new evaluation once they’d received revised bids from Microsoft and Amazon Web Services. But since that evaluation ended up determining Microsoft still had the better proposal, DoD did not issue a new contract award. Instead, today’s decision simply reaffirms the award the department originally issued last October.

Those circumstances almost guarantee that JEDI — a construct the department initially imagined as an up-to $10 billion award that could unify its IT systems from business offices to the tactical edges of battlefield networks — will continue to be bogged down in litigation for at least several more months. Amazon vowed on Friday to continue its court fight, saying that its underlying questions about how DoD decided to award the contract still have still not been answered.

A federal judge ordered DoD and Microsoft to stop work on JEDI after she found Amazon Web Services, the plaintiff in the bid protest lawsuit, was likely to succeed on at least one of its key legal contentions: that the government allowed Microsoft to use an approach to cloud data storage that should not have been allowed under the terms of DoD’s request for proposals.

Amazon had asked the court to order DoD to conduct a much broader reevaluation of the contract, but Judge Patricia E. Campbell Smith declined to do so, saying she would need to see the results of DoD’s corrective action process before she could decide whether they were sufficient.

In its most recent court filing, DoD said it would file a full status report explaining the outcome of the reconsideration process within five days after it was was finished.

In that same submission,  government attorneys said the department issued four different amendments to the JEDI contract during the reconsideration process — the latest of which came after Amazon filed a separate agency-level protest challenging what it said were “ambiguous” terms in the first two.

The court filing, on August 10, also indicated that DoD planned to make a new award decision after its source selection authority reviewed Amazon and Microsoft’s latest bids. The reasons why the department did not make a new award, even after evaluating those new bids, remain unclear.

But even if DoD’s latest action cures the relatively narrow problems the judge used as the basis for the injunction, Amazon made plain on Friday that it intends to press ahead with the bid protest lawsuit, since the cloud storage issue was only one of many it cited in its original complaint.

In an unsigned blog post, the company said the reconsideration process was “nothing more than an attempt to validate a flawed, biased, and politically corrupted decision.”

“It’s also important to point out that the DoD cited price as a major factor in the previous decision. This time, AWS offered a lower cost by several tens of millions of dollars. The DoD’s decision to intentionally ignore the clear cost benefits offered by AWS reinforces the fact that this corrective action was never meant to be fair.”

Amazon spent a majority of its posting arguing that the procurement may have been improperly influenced by President Trump’s publicly-expressed dislike for the company and its founder, Jeff Bezos, but concluded by making clear it would continue to challenge the procurement in court.

“Although these are not easy decisions to make, and we do not take them lightly, we will not back down in the face of targeted political cronyism or illusory corrective actions, and we will continue pursuing a fair, objective, and impartial review,” the company said.

Microsoft said it was pleased with DoD’s decision.

“We appreciate that after careful review, the DoD confirmed that we offered the right technology and the best value. We’re ready to get to work and make sure that those who serve our country have access to this much needed technology,” the company said in a statement.

Friday’s decision was the second consequential one this week for the high-stakes JEDI contract.

On Tuesday,  a three-judge panel of the Court of Appeals for the Federal Circuit agreed unanimously with a lower-court decision that favored DoD.

The appellate court agreed with Oracle, the plantiff in that lawsuit, that DoD had improperly circumvented a federal law that requires large indefinite-delivery/indefinite-quantity contracts like JEDI to go to more than one bidder. But the judges concluded that was a “harmless error,” since Oracle didn’t meet JEDI’s cybercecurity criteria.

Oracle has not responded to inquiries from Federal News Network about whether that firm plans to continue litigating its JEDI protest.


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