The General Services Administration (GSA) announced that the Defense Department solicited bids from Oracle Corporation (NYSE: ORCL), Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc Class C (NASDAQ: GOOG), and Amazon.com, Inc. (NASDAQ: AMZN) for cloud contracts. The revelations come after the Pentagon put aside a contract worth $10 billion with Microsoft, which Amazon challenged.
Microsoft and Amazon met Pentagon’s requirements
While no one knows the new contract’s value, the Defense Department speculated that it could be worth billions of dollars. Experts believe that the Joint Warfighting Cloud Capability (JWCC), the new initiative, will promote Microsoft and Amazon while adding credibility to two smaller cloud infrastructure providers.
In the statements given by the GSA, the government will award an indefinite-delivery, indefinite-quantity (IDIQ) contracts to Microsoft and Amazon. Additionally, it will award Cloud Service Provider that that can meet the DoD’s requirement. An IDIQ contract includes an unspecified number of services for a certain period.
Of all cloud Infrastructure Providers in the U.S, only Microsoft and Amazon could meet the requirements given by the Pentagon. One of the Pentagon’s requirements was having tactical edge decisions. These devices can support any level of data classification and function away from traditional data centers.
Amazon protested after Microsoft won the contract
Microsoft won the Joint Enterprise Defense Infrastructure (JEDI) contract in 2019. Amazon, a finalist, challenged the win making the Pentagon set the agreement aside in July. The contract was initially supposed to go to a single company. It was worth $10 billion and covered ten years.
The IDIQ contracts will now require each of the companies to have a three-year base period followed by a two-year option period
The CEO of Amazon, Andy Jassy, claimed that Microsoft got the contract because of political interference. The allegation came from Guy Snodgrass, a former speechwriter for Secretary James Mattis of the Defense Department. In his book, Snodgrass said that former President Donald Trump did not want Amazon getting the contract. However, after extensive investigation, the Pentagon’s inspector general says that there was no influence from the White House when awarding the contract.
A spokesperson from Google says the company wanted to pursue the contract as the Pentagon is the largest employer globally.
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