The Department of Defense is canceling a controversial $10 billion cloud computing contract that had been awarded to Microsoft (MSFT) over Amazon (AMZN) under the Trump administration.
The department announced Tuesday that it is canceling the Joint Enterprise Defense Infrastructure (JEDI) contract that was previously awarded to Microsoft. It will instead seek new solicitations for an updated Joint Warfighting Cloud Capability (JWCC) contract from Amazon and Microsoft.
The JEDI contract would have resulted in Microsoft building a cloud storage system for sensitive military data and technology, such as artificial intelligence, for the Department of Defense and could have resulted in revenue of up to $10 billion over 10 years.
Microsoft winning the JEDI contract in 2019 over Amazon caused some controversy, surprising many industry experts who saw Amazon as the stronger candidate to win the contract.
Amazon filed a suit with the US Court of Federal Claims contesting the decision, arguing that it was politically motivated by former President Donald Trump’s dislike of then Amazon CEO Jeff Bezos and the Washington Post, which Bezos owns.
In March 2020, the department said it wished to re-evaluate its decision to award the contract to Microsoft. Now, the Defense Department plans to cancel it altogether and solicit bids for a new, updated contract from both Microsoft and Amazon.
The Defense Department said it decided to cancel the contract “due to evolving requirements, increased cloud conservancy and industry advances,” in a press release. Because of this, the JEDI contract “no longer meets its needs,” the release states.
The department will solicit proposals from Microsoft and Amazon Web Services and will also accept proposals from other Cloud Service Providers that “can also meet the DoD’s requirements,” the release said.