The Pentagon is requesting a 120-day remand as it looks into an evaluation that ended in the award of a $10 billion cloud contract to Microsoft. The request comes after a legal battle from Amazon’s AWS paused work due to arguments that the company wasn’t the best suited.
Amazon specifically highlighted a pricing scenario from Microsoft it believes isn’t technically feasible. It also raised concerns about impartiality, particularly the words of President Donald Trump, who has repeatedly spoken out about Amazon CEO Jeff Bezos and reportedly told his defense secretary to screw Amazon out of the contract.
As part of the re-evaluation, the Pentagon wants to tweak the terms of the contract and let companies make limited revisions to their proposals. This could, for example, let Microsoft fix the aforementioned pricing snafu, or give AWS the opportunity to present a stronger bid. Indeed, the Pentagon’s re-evaluation specifically mentions a re-evaluation of cloud storage solution pricing.
Both have welcomed the move in official statements, Microsoft maintaining that it’s technically superior, and Amazon suggesting this is an acknowledgment that the DoD made a mistake.
“We believe the Department of Defense made the correct decision when they awarded the contract. However, we support their decision to reconsider a small number of factors as it is likely the fastest way to resolve all issues and quickly provide the needed modern technology to people across our armed forces,” said Frank Shaw, CVP of communications at Microsoft. “Over two years the DoD reviewed dozens of factors and sub factors and found Microsoft equal or superior to AWS on every factor. We remain confident that Microsoft’s proposal was technologically superior, continues to offer the best value, and is the right choice for the DoD.”
Earlier in the week, the unsealing of court documents revealed a judge’s belief that Amazon is likely to succeed in its argument about cloud storage pricing. Despite its request, the DoD holds that, overall, it made the right decision with the contract. It could, of course, rule differently, after further looking into the matter.
“We are pleased that the DoD has acknowledged ‘substantial and legitimate’ issues that affected the JEDI award decision, and that corrective action is necessary. We look forward to complete, fair, and effective corrective action that fully insulates the re-evaluation from political influence and corrects the many issues affecting the initial flawed award,” an Amazon spokesperson said.
Should the Pentagon be awarded the extension, the delay of up to 120-days will be very significant and inconvenient for Microsoft. However, with the company banned from working on the contract until the dispute is settled, it could prove more attractive than a years-long legal battle.