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Updated August 2, 2019
DOD’s Cloud Strategy and the JEDI Cloud Procurement
In September 2017, the Deputy Secretary of Defense issued
systems and applications. DOD envisions Fit For Purpose
a memorandum calling for the accelerated adoption of a
clouds as task-specific clouds, or on-premises cloud
Department of Defense (DOD) enterprise-wide cloud
solutions, to be used in limited situations where the General
services solution as a fundamental component of ongoing
Purpose cloud is “not capable of supporting mission needs.”
DOD modernization efforts. As a component of this effort,
DOD is seeking to acquire a cloud services solution
The JEDI Cloud Program
accessible to the entirety of the Department that can support
DOD issued its Request for Proposals (RFP) for the JEDI
Unclassified, Secret, and Top Secret requirements, focusing
Cloud on July 26, 2018; the RFP closed on October 9,
on commercially available cloud service solutions, through
2018. DOD has completed its initial downselect from
the Joint Enterprise Defense Infrastructure (JEDI) Cloud
proposals submitted by offerors, with Amazon Web
acquisition program. The Department originally expected to
Services and Microsoft remaining in contention for the
award the contract in August 2019. However, Secretary of
contract. DOD requested $61.9 million in funding for the
Defense Dr. Mark T. Esper is reportedly currently
JEDI Cloud acquisition program for FY2020.
reviewing the JEDI Cloud program, which may delay the
award.
Contract Structure
DOD is conducting a full and open competition that is
Significant industry and congressional attention has been
expected to result in a single award Indefinite
focused on DOD’s intent to award the JEDI Cloud contract
Delivery/Indefinite Quantity (ID/IQ) firm-fixed price
to a single company.
contract for commercial items. DOD has indicated that the
minimum guaranteed award is $1 million. The contract is
Background
expected to have a maximum ceiling of $10 billion across a
Broadly speaking, cloud computing refers to the practice of
potential 10-year period of performance. Under an ID/IQ
remotely storing and accessing information and software
contract, the government is only required to purchase the
programs on demand, instead of storing data on a
minimum amount specified in the contract, and may
computer's hard drive or accessing it through an
ultimately choose not to reach the contract ceiling. The
organization’s intranet. This practice relies on a cloud
contract period of performance is structured as a 2-year
infrastructure, a collection of hardware and software that
base ordering period, with 3 additional option periods, for a
may include components such as servers and a network.
potential total of 10 years (see Table 1).
Cloud infrastructure can be deployed privately to a select
user group, publicly through subscription-based commercial
Table 1. Anticipated Period of Performance
services available to the general public, or through hybrid
deployments that combine aspects of both private and
Performance Period
Timeframe
public cloud infrastructure. As of mid-2018, DOD reported
Base ordering period (2 years, guaranteed)
2019-2021
maintaining more than 500 public and private cloud
infrastructures that supported Unclassified and Secret
Option #1 (3 years, if exercised)
2021-2024
requirements. DOD has been critical of its current cloud
Option #2 (3 years, if exercised)
2024-2027
services implementation, describing them as
“decentralized” and creating “additional layers of
Option #3 (2 years, if exercised)
2027-2029
complexity” that impede shared access to common
Source: JEDI Cloud RFP, “Combined Synopsis/Solicitation for
applications and data across the department. DOD has also
acknowledged that its prior lack of “clear guidance on
Commercial Items.”
cloud computing, adoption, and migration” has led to
JEDI Cloud Source Selection Process
“limited capability … and inefficient acquisitions that
DOD has indicated that it intends to award the JEDI Cloud
cannot take advantage of economies of scale.”
contract to the offeror whose proposal meets specified
DOD’s Cloud Strategy
requirements and represents the best value to the
government, based on a two-step evaluation process. In the
DOD publicly released its Cloud Strategy in February 2019.
first step, offerors were evaluated against seven “sub-
The strategy described plans to extend cloud computing
factor” performance-based criteria. Offerors’ proposals
services across the Department through developing a
“multi
were deemed acceptable or unacceptable for each
-cloud, multi-vendor … ecosystem composed of a
individual sub-factor as considered sequentially. A
General Purpose and [multiple] Fit For Purpose” clouds.
judgement of unacceptable for any sub-factor immediately
DOD anticipates that the JEDI Cloud acquisition program
disqualified a proposal from further consideration. If a
will ultimately lead to a foundational enterprise-wide
proposal received a mark of acceptable for each sub-factor,
General Purpose cloud suitable for the majority of DOD
it proceeded to the second phase of the source selection
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DOD’s Cloud Strategy and the JEDI Cloud Procurement
process, where it was then evaluated against five additional
establish a DOD-wide budget accounting system for funds
technical factors, together with the offeror’s price
requested and expended for cloud services, as well as funds
proposals, to determine a competitive range of offerors.
requested and expended to migrate to a cloud environment;
Qualifying offerors were next evaluated against two
and (2) a detailed description of DOD’s strategy to
additional factors: the offeror’s approach to meeting small
implement enterprise-wide cloud computing to the
business participation goals and a demonstration of the
congressional defense committees.
proposed solution’s capabilities.
Proposed Legislation
Industry Reactions
Section 1035 of S. 1790, the Senate-passed version of the
DOD’s acquisition strategy sparked resistance from many
FY2020 NDAA, would specify that the DOD CIO and the
commercial cloud vendors and industry observers who
DOD Chief Data Officer, in consultation with the J6 C4 &
opposed DOD’s intent to award the contract to a single
Cyber Directorate of the Joint Staff and the DOD Chief
company. Oracle America and IBM both filed pre-award
Management Officer, must develop and issue DOD-wide
bid protests with the Government Accountability Office
policy and implementing instructions regarding the
(GAO) against the JEDI Cloud solicitation. GAO denied
transition of data and applications to the cloud.
Oracle America’s protests and dismissed IBM’s protests.
Oracle America then filed a pre-award bid protest lawsuit
H.Rept. 116-84, which accompanies H.R. 2968, the House
with the U.S. Court of Federal Claims; the court ruled
Appropriations Committee-reported version of the FY2020
against Oracle America in a July 12, 2019, decision.
DOD appropriations act, highlights the committee’s
questions regarding DOD’s pursuit of a “single vendor
In filings associated with its bid protest lawsuit, Oracle
contract strategy” for the JEDI Cloud procurement.
America in part alleged that the JEDI Cloud acquisition
Accordingly, the House Appropriations Committee would
process was unfairly skewed in favor of Amazon Web
direct that no funds may be obligated or expended to
Services through potential organizational conflicts of
migrate data and applications to the JEDI Cloud until the
interest associated with three former DOD employees, each
DOD CIO provides a report to Congress expanding on the
of whom was involved to greater or lesser degrees in the
Department’s plans to transition to a “multi-cloud, multi-
early development of the program. Two of these individuals
vendor” cloud environment. The DOD CIO would also be
were subsequently employed by Amazon. DOD
directed to submit quarterly reports on the Department’s
investigations determined that Amazon Web Services had
cloud adoption and implementation strategy.
no conflicts of interest and established that the actions of
the individuals identified by Oracle America did not
Considerations for Congress
negatively impact the procurement or grant Amazon Web
Some industry observers contend that an initial single
Services an unfair competitive advantage. However, the
award appears to contradict broader federal cloud
investigations did identify individual violations of ethical
computing implementation guidance and industry best
standards established by the Federal Acquisition Regulation
practices that stress the importance of multi-cloud solutions.
(FAR), which directs government procurement activities to
Others point to the implementation approaches identified by
be “conducted in a manner above reproach,” and for
DOD’s Cloud Strategy that indicate the Department expects
government employees to strictly avoid “even the
the JEDI Cloud to serve certain enterprise-wide functions,
appearance of a conflict of interest in Government-
performing as one component of a broader multi-cloud,
contractor relationships.” These findings were reportedly
multi-vendor DOD cloud system. Opponents of DOD’s use
referred to the DOD Inspector General for further review.
of a single-award contract for the JEDI Cloud program have
suggested that this tactic could restrict future competition
Congressional Activity
for enterprise-wide DOD and cloud services. Supporters of
Enacted Legislation
DOD’s approach argue that the JEDI Cloud program’s
Section 1064 of P.L. 115-232, the FY2019 National
requirement for offerors to develop platform-agnostic
Defense Authorization Act (NDAA), requires the DOD
applications and data schema suggests that the Department
Chief Information Officer (CIO) to conduct specified
may be well equipped to migrate from any service
enabling activities to support DOD’s cloud adoption
environment developed under the JEDI Cloud contract to
initiative and to submit a report detailing the current status
another such environment.
and anticipated implementation of DOD’s cloud adoption
initiative. The section also established a limitation on the
Other Resources
obligation or expenditure of 15% of the authorized FY2019
funds for the initiative until the required report’s
DOD Cloud Strategy, available at https://go.usa.gov/xy2Wm
submission. Section 1064 also required the Deputy
Secretary of Defense to “ensure that the acquisition
CRS Products
approach of the Department continues to follow the [FAR]
CRS Report R45847, The Department of Defense’s JEDI Cloud
with respect to competition.”
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
Heidi M. Peters, Analyst in U.S. Defense Acquisition
proposed [JEDI] ... cloud computing services” until 90 days
Policy
after the Secretary of Defense submits (1) a plan to
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DOD’s Cloud Strategy and the JEDI Cloud Procurement

IF11264


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https://crsreports.congress.gov | IF11264 · VERSION 7 · UPDATED

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