INSIGHTi
Amazon Protest of the Department of
Defense's JEDI Cloud Contract Award to
Microsoft
Updated November 22, 2019
In September 2017, the Deputy Secretary of Defense issued a memorandum calling for the adoption of a
Department of Defense (DOD) enterprise-wide cloud services solution. As part of its ongoing technology
modernization efforts, DOD sought to acquire a commercial cloud services solution known as the Joint
Enterprise Defense Infrastructure (JEDI) Cloud.
In April 2019, DOD selected Microsoft and Amazon Web Services (henceforth Amazon) to contend for
the contract award from qualified proposals submitted by IBM, Amazon, Microsoft, and Oracle. In
October 2019, DOD announced it had awarded the JEDI contract to Microsoft. The contract award
process was contentious, attracting significant industry and congressional interest. Oracle filed pre-award
bid protests with the Government Accountability Office (GAO) and U.S. Court of Federal Claims
(COFC). GAO and COFC ruled against Oracle; however, Oracle is in the process of appealing the COFC
decision to the U.S. Court of Appeals for the Federal Circuit.
In November 2019, Amazon filed a post-award bid protest with COFC, alleging potentially improper
“political influence” in DOD’s award decision and “clear deficiencies” in the contract evaluation process.
Many observers trace Amazon’s accusation of political influence in part to President Donald Trump’s
July 2019 remarks that his Administration would “take a very strong look” at the JEDI Cloud acquisition
process. While Amazon was expected by some analysts to win the JEDI contract, due in part to its
extensive data center infrastructure and compliance with DOD cloud security requirements for hosting
classified information, other analysts have speculated that Microsoft prevailed over Amazon based on
offering a lower-priced solution, as well as the company’s existing business relationships with the
Department.
The JEDI Source Selection Process
In August 2019, separate from the source selection process, Secretary of Defense Mark Esper indicated
that he would review the JEDI Cloud program. In October 2019, Esper recused himself from further
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involvement in the JEDI Cloud contract “out of an abundance of caution to avoid any concerns regarding
… impartiality,” as one of his children was employed by IBM.
DOD emphasized in its October 2019 contract award announcement that “all offerors were treated fairly
and evaluated consistently with the solicitation’s stated evaluation criteria.” These criteria indicated that
the JEDI contract would be awarded to the offeror whose proposal met specified requirements and
represented the best value to the government. Offerors were first evaluated on an acceptable-unacceptable
basis against seven sequential subfactor performance-based criteria. A judgment of unacceptable for any
subfactor immediately disqualified a proposal from further consideration. If a proposal received a mark of
acceptable for all subfactors, it proceeded to the second phase of the source selection process, where it
was then evaluated against five technical factors, together with price proposals, to determine a
competitive range of offerors. Qualifying offerors in the competitive range (Microsoft and Amazon) were
next evaluated against two additional factors: proposed approaches for meeting small business
participation goals and a demonstration of the offered solution’s capabilities.
During his October 2019 confirmation hearing, DOD Chief Information Officer (CIO) Dana Deasy
addressed congressional concerns regarding the potential for political pressures to influence the contract
award process. To this end, he described how the JEDI source selection evaluation panel, which made the
recommendation to award the JEDI contract to Microsoft, was composed of approximately 50 federal
civilian experts in cloud computing. These individuals, selected by the JEDI contracting officer in
accordance with the Federal Acquisition Regulation, served on compartmentalized teams. Deasy stressed
that the identity of every member of the source selection team was kept “anonymous … throughout this
process” and confirmed that, to the best of his knowledge, the White House had not contacted members of
the source selection team.
Next Steps
Amazon’s choice to file its bid protest with COFC instead of GAO reflects certain trade-offs. For
example, parties that initiate a COFC bid protest do not gain the benefit of an automatic stay that would
halt the initiation of contract activities; however, the scope of discovery may be broader in a COFC
protest, as the entire administrative record of a procurement is generally reviewed. Amazon may petition
the COFC to issue a preliminary injunction or temporary restraining order; in its appeal to the Federal
Circuit, Oracle has requested the issuance of a permanent injunction.
DOD has made no public comment indicating whether Microsoft has begun work on the JEDI contract.
Considerations for Congress
Further delays in initiating work on the JEDI contract could affect the timely acquisition of other new
capabilities. DOD CIO Deasy, as well as Lt. Gen. Bradford Shwedo, Director for Command, Control,
Communications and Computers/Cyber of the J6 Directorate of the Joint Staff, have emphasized that
delays may adversely affect ongoing Department activities, such as the recently established Joint
Artificial Intelligence Center, which seeks to accelerate the delivery of artificial intelligence-enabled
capabilities to the DOD.
In light of Congress’s sustained interest in bid protest procedural reform—expressed through numerous
provisions enacted in recent National Defense Authorization Acts (NDAA), such as Section 822 of the
FY2019 National Defense Authorization Act (10 U.S.C. §2302 note), which requires DOD to conduct a
study of the frequency and effects of so-called “second bite at the apple” bid protests involving the same
contract award or proposed award filed through both GAO and COFC—Congress may further scrutinize
the ultimate impact of bid protests on DOD efforts to acquire new or innovative capabilities.
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Additional Resources
CRS In Focus IF11264, DOD’s Cloud Strategy and the JEDI Cloud Procurement
CRS Report R45080, Government Contract Bid Protests: Analysis of Legal Processes and Recent Developments
CRS Report R45847, The Department of Defense’s JEDI Cloud Program
Author Information
Heidi M. Peters
Analyst in U.S. Defense Acquisition Policy
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