DoD Asks Court for 120 Days To 'Reconsider' JEDI Award
Amazon's suit against the U.S. Department of Defense over the DoD's decision to award a major cloud contract to Microsoft has taken another turn, with the DoD petitioning a federal court for more time to "reconsider" its initial decision.
The DoD on Thursday filed a motion with the U.S. Court of Federal Claims asking for "120 days to reconsider certain aspects of the challenged agency decision."
Specifically, the DoD wants to re-evaluate data storage proposals that were submitted by Microsoft and Amazon Web Services (AWS) as part of the original bidding process for the DoD's Joint Enterprise Defense Infrastructure (JEDI) contract. After fielding bids from various cloud vendors -- among which AWS was considered the front-runner -- the DoD last fall awarded the $10 billion JEDI cloud contract to Microsoft.
Amazon swiftly filed suit contesting the DoD's decision. In February, Judge Patricia Elaine Campbell-Smith of the U.S. Court of Federal Claims issued an order preventing work on the JEDI contract while the case progresses through the court.
The crux of Amazon's challenge, as revealed by court documents unsealed earlier this month, is that the DoD allegedly "improperly evaluated" Microsoft's proposal of a "highly accessible" data storage solution. According to Amazon, Microsoft's proposed storage solution may have compared favorably to Amazon's on price, but it did not meet the technical terms stipulated by the DoD and should have disqualified Microsoft altogether.
In her ruling granting the injunction, Campbell-Smith agreed that Amazon is "likely to demonstrate that [the DoD] erred." She indicated that keeping Microsoft's proposal in the the running, instead of disqualifying it, likely had a negative impact on the price evaluation of Amazon's own proposed data solution, materially hurting its chances of winning the contract.
Now the DoD is asking the court for four months to reconsider how it judged the two companies' proposed data storage solutions, adjust the terms under which it solicited those proposals, and "accept limited proposal revisions" from Amazon and Microsoft. In addition, the DoD said it "wishes to reconsider its evaluation of the offerors' online marketplace offerings."
In separate statements to the press, the two companies said they supported the DoD's request to review its process. In a statement to CNBC, an Amazon spokesperson said, "We are pleased that the DoD has acknowledged 'substantial and legitimate' issues that affected the JEDI award decision, and that corrective action is necessary."
For its part, Microsoft told CNBC, "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."
At least one industry watcher believes the DoD's motion could mean the JEDI contract will be ultimately split between Microsoft and Amazon. In a statement to Investor's Business Daily, Wedbush analyst Daniel Ives said, "While initially this was a single-source contract, we believe the writing is on the wall that the Pentagon needs to likely break up this contract in order to move it along and start the procurement process given how critical the JEDI deal is to the overall DOD and longer-term strategic global military operations/infrastructure."