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How will the DoD’s next multibillion-dollar IT contract fare after messy JEDI deal?


17.05.2021

Consider these two quotes about two contracts the Department of Defense says are key to modernizing networks and advancing its computing power: “The war fighter is absolutely waiting for this.” “It is one of the crown jewels that we have as part of our IT reform.” The first quote is how former U.S. Defense Department Chief Information Officer Dana Deasy described the department’s need for the Joint Enterprise Defense Infrastructure cloud contract in August 2019. More than a year and a half later, the enterprise cloud that was supposed to house data across all classification levels hasn’t been built despite a contract award in late 2019. The second quote comes from one of Deasy’s deputies about the Defense Enclave Services contract, an IT services deal to create a common network for DoD offices that aren’t under the military services, known as the fourth estate agencies. What do the two contracts have in common? Officials are emphatic that they serve a critical needs for the department, resulting in flashy price tags awarded to a single company for each project. The JEDI cloud has a ceiling of $10 billion over 10 years, while the DES contract could be worth more than $11 billion over a decade. The JEDI contract attracted the major cloud providers, with Microsoft ultimately winning, but it has been tied up in court over accusations of political interference and evaluation errors. Likewise, the DES contract will attract major IT integrators. Could the department stumble into another boondoggle with the DES contract? Experts told C4ISRNET that any high-dollar procurements are likely to face protests, but they don’t expect the say level of controversy. “Any contract can be protested,” said David Mihelcic, former chief technology officer of the Defense Information System Agency. “It seems like the trend these days [is] most large contracts are protestable.”

The JEDI cloud is meant to serve as an enterprise-wide cloud computing environment that will carry 80 percent of the department’s systems in an effort to reduce stovepipes to ease access to data. The DES contract, meanwhile, contains cloud computing services, network management, IT infrastructure and help desk services. “It’s a forcing mechanism to get all of the fourth estate agencies on a set of standard services,” said Chris Cornillie, a federal technology market analyst at Bloomberg Government. “It’s basically a way to get everyone on the same page, much in the same way that JEDI cloud was originally devised as a way to get all of the military services onto the same platform, enabling them to share data and leverage artificial intelligence.” The Defense Enclave Services contract has been a much quieter process so far. The department released its final RFP in December without problem, a far cry from the JEDI cloud RFP that was twice protested as unfair after its release and later ended up in court. The JEDI cloud further suffered in part because of the intrigue around involvement in the contract by President Donald Trump, accused by Amazon Web Services of meddling in the contract to steer the lucrative award away from AWS because of the former president’s distaste for Amazon CEO Jeff Bezos. “I’m certain you’re not going to see that level of intrigue with this is DES competition,” said Mihelcic, now a consultant at technology market insights firm DMMI. Another key difference is that JEDI would have massive business implications for major cloud providers if a single vendor was able to demonstrate that it could take on databases hosted by a competitor, Cornillie said, but with DES, it’s a “traditional competition among government contractors.” He also pointed out that DES will have several subcontracting opportunities, whereas with JEDI, the winner would keep the bulk of the cash. “It’s perhaps not a total loss for an integrator that doesn’t win the prime spot” on the DES contract, Cornillie said. Alleged technical errors have been a thorn in the side of the department on cloud acquisition lately. A Court of Federal Claims judge halted work on the JEDI cloud based on AWS’ accusations that the DoD technical evaluators incorrectly reviewed the company’s proposal. In another $7 billion cloud contract, known as the Defense Enterprise Office Solutions cloud, the DoD twice accidentally released proprietary information to a competing company, delaying the award several months. To ensure another critical solution doesn’t face similar fates, the department will have be meticulous through each stage of the contracting process. “The losers (of the DES contract) will think long and hard about whether or not the evaluation was conducted fairly and equitably and may end up protesting that, but we’re not going to see anywhere near this level of intrigue” that came with JEDI, Mihelcic reiterated.

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