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July 8, 2019
DOD’s Cloud Strategy and the JEDI Cloud Procurement
In September 2017, the Deputy Secretary of Defense issued
Defense Enterprise Office Solutions acquisition program
a memorandum calling for the accelerated adoption of a
that is designed to create a cloud-based replacement for
Department of Defense (DOD) enterprise-wide cloud
certain DOD software applications – or on-premises cloud
services solution as a key component of ongoing DOD
solutions, such as the Defense Information Systems
modernization efforts. Accordingly, DOD is seeking to
Agency’s milCloud 2.0, to be used in limited situations
“acquire a[n] … enterprise cloud services solution that can
where the General Purpose cloud is “not capable of
support Unclassified, Secret, and Top Secret requirements,”
supporting mission needs.”
based on commercially available cloud service solutions,
through the Joint Enterprise Defense Infrastructure (JEDI)
The JEDI Cloud Program
Cloud program. The Department is in the final stages of
DOD issued its Request for Proposals (RFP) for the JEDI
evaluating proposals and anticipates announcing a contract
Cloud on July 26, 2018; the RFP closed on October 9,
award decision in August 2019. DOD requested $61.9
2018. DOD has completed its initial downselect from
million in funding for the JEDI Cloud acquisition program
proposals submitted by offerors, with Amazon Web
for Fiscal Year (FY) 2020. Significant industry and
Services and Microsoft remaining in contention for the
congressional attention has been focused on DOD’s intent
contract.
to award the JEDI Cloud contract to a single company.
Contract Structure
Background
DOD is conducting a full and open competition that is
Broadly speaking, cloud computing refers to the practice of
expected to result in a single award Indefinite
remotely storing and accessing information and software
Delivery/Indefinite Quantity (ID/IQ) firm-fixed price
programs on demand, instead of storing data on a
contract for commercial items. DOD has indicated that the
computer's hard drive or accessing it through an
minimum guaranteed award is $1 million. The contract has
organization’s intranet. This practice relies on a cloud
a maximum ceiling of $10 billion across a potential 10-year
infrastructure, a collection of hardware and software that
period of performance. Under an ID/IQ contract, the
may include components such as servers and a network.
government is only required to purchase the minimum
Cloud infrastructure can be deployed privately to a select
amount specified in the contract, and may ultimately choose
user group, publicly through subscription-based commercial
not to reach the contract ceiling. The contract period of
services available to the general public, or through hybrid
performance is structured as a 2-year base ordering period,
deployments that combine aspects of both private and
with three additional option periods, for a potential total of
public cloud infrastructure.
10 years (see Table 1).
As of mid-2018, DOD reported maintaining more than 500
Table 1. Anticipated Period of Performance
public and private cloud infrastructures that supported
Unclassified and Secret requirements. DOD has been
Performance Period
Timeframe
critical of its current cloud services implementation,
Base ordering period (2 years, guaranteed)
2019-2021
describing them as “decentralized” and creating “additional
layers of complexity” that impede shared access to common
Option #1 (3 years, if exercised)
2021-2024
applications and data across the department. DOD has also
acknowledged that its prior lack of “clear guidance on
Option #2 (3 years, if exercised)
2024-2027
cloud computing, adoption, and migration” has led to
Option #3 (2 years, if exercised)
2027-2029
“limited capability … and inefficient acquisitions that
cannot take advantage of economies of scale.”
Source: JEDI Cloud RFP, “Combined Synopsis/Solicitation for
Commercial Items.”
DOD’s Cloud Strategy
JEDI Cloud Source Selection Process
DOD publicly released its Cloud Strategy in February 2019.
DOD has indicated that it intends to award the JEDI Cloud
The strategy described plans to extend cloud computing
contract to the offeror whose proposal meets specified
services across the Department through developing a
“multi
requirements and represents the best value to the
-cloud, multi-vendor … ecosystem composed of a
General Purpose and [multiple] Fit For Purpose” clouds.
government, based on a two-step evaluation process. In the
first step, offerors were evaluated against seven “sub-
DOD anticipates that the JEDI Cloud acquisition program
factor” performance-based criteria. Offerors’ proposals
will ultimately lead to a foundational enterprise-wide
were deemed acceptable or unacceptable for each
General Purpose cloud suitable for the majority of DOD
individual sub-factor as considered sequentially. A
systems and applications. DOD envisions Fit For Purpose
judgement of unacceptable for any sub-factor immediately
clouds as task-specific clouds – such as the ongoing
disqualified a proposal from further consideration. If a
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DOD’s Cloud Strategy and the JEDI Cloud Procurement
proposal received a mark of acceptable for each sub-factor,
establish a DOD-wide budget accounting system for funds
it proceeded to the second phase of the source selection
requested and expended for cloud services, as well as funds
process, where it was then evaluated against five additional
requested and expended to migrate to a cloud environment;
technical factors, together with the offeror’s price
and (2) a detailed description of DOD’s strategy to
proposals, to determine a competitive range of offerors.
implement enterprise-wide cloud computing to the
Qualifying offerors were next evaluated against two
congressional defense committees.
additional factors: the offeror’s approach to meeting small
business participation goals and a demonstration of the
Proposed Legislation
proposed solution’s capabilities.
Section 1035 of S. 1790, the Senate-passed version of the
FY2020 NDAA, would specify that the DOD CIO and the
Industry Reactions
DOD Chief Data Officer, in consultation with the J6 C4 &
DOD’s acquisition strategy sparked resistance from many
Cyber Directorate of the Joint Staff and the DOD Chief
commercial cloud vendors and industry observers who
Management Officer, must develop and issue DOD-wide
opposed DOD’s intent to award the contract to a single
policy and implementing instructions regarding the
company. Oracle America and IBM both filed pre-award
transition of data and applications to the cloud.
bid protests with the Government Accountability Office
(GAO) against the JEDI Cloud solicitation. GAO denied
H.Rept. 116-84, which accompanies H.R. 2968, the House
Oracle America’s protests and dismissed IBM’s protests.
Appropriations Committee reported version of the FY2020
Oracle America then filed a bid protest lawsuit with the
Department of Defense appropriations act, highlights the
U.S. Court of Federal Claims; the case is ongoing. In filings
House Appropriations Committee’s questions regarding
associated with its bid protest lawsuit, Oracle America in
DOD’s pursuit of a “single vendor contract strategy” for the
part alleged that the JEDI Cloud acquisition process was
JEDI Cloud procurement. Accordingly, the House
unfairly skewed in favor of Amazon Web Services through
Appropriations Committee would direct that no funds may
potential organizational conflicts of interest associated with
be obligated or expended to migrate data and applications
three former DOD employees, each of whom was involved
to the JEDI Cloud until the DOD CIO provides a report to
to greater or lesser degrees in the early development of the
Congress expanding on the Department’s plans to transition
program and were subsequently employed by Amazon.
to a “multi-cloud, multi-vendor” cloud environment. The
DOD CIO would also be directed to submit quarterly
DOD investigations determined that Amazon Web Services
reports on the Department’s cloud adoption and
had no conflicts of interest and established that the actions
implementation strategy.
of the individuals identified by Oracle America did not
negatively impact the procurement or grant Amazon Web
Considerations for Congress
Services an unfair competitive advantage. However, the
Some industry observers contend that an initial single
investigations did identify individual violations of ethical
award appears to contradict broader federal cloud
standards established by the Federal Acquisition Regulation
computing implementation guidance and industry best
(FAR), which directs government procurement activities to
practices that stress the importance of multi-cloud solutions.
be “conducted in a manner above reproach,” and for
Others point to the implementation approaches identified by
government employees to strictly avoid “even the
DOD’s Cloud Strategy that indicate the Department expects
appearance of a conflict of interest in Government-
the JEDI Cloud to serve certain enterprise-wide functions,
contractor relationships.” These findings were reportedly
performing as one component of a broader multi-cloud,
referred to the DOD Inspector General for further review.
multi-vendor DOD cloud system. Opponents of DOD’s use
of a single-award contract for the JEDI Cloud program have
Congressional Activity
suggested that this tactic could restrict future competition
Enacted Legislation
for enterprise-wide DOD and cloud services. Supporters of
Section 1064 of P.L. 115-232, the FY2019 National
DOD’s approach argue that the JEDI Cloud program’s
Defense Authorization Act (NDAA), requires the DOD
requirement for offerors to develop platform-agnostic
Chief Information Officer (CIO) to conduct specified
applications and data schema suggests that the Department
enabling activities to support DOD’s cloud adoption
may be well equipped to migrate from any service
initiative and to submit a report detailing the current status
environment developed under the JEDI Cloud contract to
and anticipated implementation of DOD’s cloud adoption
another such environment.
initiative. The section also established a limitation on the
obligation or expenditure of 15% of the authorized FY2019
funds for the initiative until the required report’s
Other Resources
submission. Section 1064 also required the Deputy
DOD Cloud Strategy, available at https://go.usa.gov/xy2Wm
Secretary of Defense to “ensure that the acquisition
approach of the Department continues to follow the [FAR]
CRS Products
with respect to competition.”
CRS Insight IN10990, The DOD’s JEDI Cloud Program, by Heidi
M. Peters
Section 8137 of P.L. 115-245, which provided FY2019
DOD appropriations, prevents the obligation or expenditure
of FY2019 funds to “migrate data and applications to the
proposed [JEDI] ... cloud computing services” until 90 days
Heidi M. Peters, Analyst in U.S. Defense Acquisition
after the Secretary of Defense submits (1) a plan to
Policy
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DOD’s Cloud Strategy and the JEDI Cloud Procurement
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