JEDI contract's future becomes murky after AWS court win

The Department of Defense (DoD) may have to rethink the $10 billion JEDI cloud computing contract it awarded to Microsoft following a court decision in its legal battle with Amazon.

In an interview at the Aspen Institute on April 30, Deputy Defense Secretary Kathleen Hicks said the DoD would have to consider the project in the context of ongoing litigation.

"We're going to have to assess where we are with regard to the ongoing litigation around JEDI and determine what the best path forward is for the department," she said.

The statement echoed a briefing sent to lawmakers in January. In the briefing, the Pentagon warned that Amazon's legal action against the government and Microsoft jeopardized the project.

The Pentagon’s problem relates to count number four of Amazon's litigation, which alleges improper influence at the highest levels of Government. The cloud giant says this unfairly affected the outcome of the bidding process. It alleges that former President Trump influenced the DoD to avoid giving the contract to Amazon.

The briefing document outlined two scenarios. In the first scenario, the Court of Federal Claims (COFC) would rule to dismiss count four of the AWS complaint. This wouldn't end the litigation, as AWS has three other counts to consider, but it would likely limit that litigation to around five months. The Pentagon would suspend JEDI until that litigation process was complete.

The second scenario became a reality on April 29 when the COFC published a decision denying the DoD's request to dismiss count four in the courts. The DoD's briefing document warned that this would threaten the JEDI contract’s future. It would need extensive litigation involving depositions from current and former White House and DoD officials, it warned.

"These motions will be complex and elongate the timeline significantly," said the report. "The prospect of such a lengthy litigation process might bring the future of the JEDI Cloud procurement into question."

The report said that either scenario leaves the Pentagon with a gap in its capabilities which it calls an "urgent, unmet requirement." This would extend across all three classification levels and from the home front to the tactical edge, at scale.

The DoD's Office of Inspector General has launched an administrative review of the JEDI contract. However, last month, Senator Chuck Grassley of the Senate Committee on the Judiciary wrote to Secretary of Defense Lloyd Austin warning he had serious concerns about the scope of the review.

"DoD OIG did not examine key issues that occurred before the request for proposal (RFP) process, including allegations of pressure from senior leadership to conduct the entire contract without a competitive bidding process," he said, also flagging the "unusual and significant" involvement of senior DoD leaders in contract decisions.