DOD’s Cloud Strategy and the JEDI Cloud Procurement

DOD’s Cloud Strategy and the JEDI Cloud Procurement

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Updated November 13, 2019
DOD’s Cloud Strategy and the JEDI Cloud Procurement
In September 2017, the Deputy Secretary of Defense issued
The JEDI Cloud Program
a memorandum calling for the accelerated adoption of a
DOD issued its Request for Proposals (RFP) for the JEDI
Department of Defense (DOD) enterprise-wide cloud
Cloud on July 26, 2018; the RFP closed on October 9,
services solution as a fundamental component of ongoing
2018. In early April 2019, DOD completed its initial
DOD modernization efforts. As a component of this effort,
downselect from four qualified proposals submitted by
DOD sought to acquire a cloud services solution accessible
IBM, Amazon Web Services, Microsoft, and Oracle
to the entirety of the Department that can support
America. Amazon Web Services and Microsoft remained in
Unclassified, Secret, and Top Secret requirements, focusing
contention for the contract at that time.
on commercially available cloud service solutions, through
the Joint Enterprise Defense Infrastructure (JEDI) Cloud
Contract Structure
acquisition program.
DOD conducted a full and open competition for a single
award Indefinite Delivery/Indefinite Quantity (ID/IQ) firm-
As DOD carried out the acquisition process for the JEDI
fixed price contract for commercial items. The contract
Cloud program, industry and Congress focused significant
period of performance is structured as a two-year base
attention on DOD’s intent to award the JEDI Cloud contract
ordering period, with three additional option periods, for a
to a single company. On October 25, 2019, DOD
potential total of 10 years (see Table 1). DOD specified
announced it had awarded the JEDI Cloud contract to
that the minimum guaranteed award is $1 million; the
Microsoft.
Department has estimated that contract spending across the
contract’s base ordering period will total approximately
Background
$210 million. The contract is expected to have a ceiling of
Broadly speaking, cloud computing refers to the practice of
$10 billion across the entire potential 10-year period of
remotely storing and accessing information and software
performance. Under an ID/IQ contract, the government is
programs on demand, instead of storing data on a
only required to purchase the minimum amount specified in
computer's hard drive or accessing it through an
the contract, and may ultimately choose not to reach the
organization’s intranet. This practice relies on a cloud
contract’s ceiling.
infrastructure, a collection of hardware and software that
may include components such as servers and a network.
Table 1. Anticipated Period of Performance
Cloud infrastructure can be deployed privately to a select
user group, publicly through subscription-based commercial
Performance Period
Timeframe
services available to the general public, or through hybrid
Base ordering period (2 years, guaranteed)
2019-2021
deployments that combine aspects of both private and
public cloud infrastructure.
Option #1 (3 years, if exercised)
2021-2024
Option #2 (3 years, if exercised)
2024-2027
DOD has been critical of its cloud services implementation
to date, describing it as “decentralized” and creating
Option #3 (2 years, if exercised)
2027-2029
“additional layers of complexity” that impede shared access
Source: JEDI Cloud RFP, “Combined Synopsis/Solicitation for
to common applications and data across the department.
DOD has also acknowledged that its prior lack of “clear
Commercial Items.”
guidance on cloud computing, adoption, and migration” has
JEDI Cloud Source Selection Process
led to “limited capability … and inefficient acquisitions that
cannot take advantage of economies of scale.”
DOD indicated that the JEDI Cloud contract would be

awarded to the offeror whose proposal met specified
DOD’s Cloud Strategy
requirements and represented 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 by developing a “multi-
were deemed acceptable or unacceptable for each
cloud, multi-vendor … ecosystem composed of a General
Purpose and [multiple] Fit For Purpose” clouds.
individual sub-factor as considered sequentially. A
DOD
judgement of unacceptable for any sub-factor immediately
anticipates that the JEDI Cloud acquisition program will
disqualified a proposal from further consideration. If a
ultimately lead to a foundational enterprise-wide General
proposal received a mark of acceptable for each sub-factor,
Purpose cloud suitable for the majority of DOD systems
it proceeded to the second phase of the source selection
and applications. DOD envisions Fit For Purpose clouds as
process, where it was then evaluated against five additional
task-specific clouds, or on-premises cloud solutions, to be
technical factors, together with the offeror’s price
used in limited situations where the General Purpose cloud
is “not capable of supporting mission needs.”
proposals, to determine a competitive range of offerors.

Qualifying offerors—Microsoft and Amazon Web
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DOD’s Cloud Strategy and the JEDI Cloud Procurement
Services—were next evaluated against two additional
expended to migrate to a cloud environment; and (2) a
factors: the offeror’s proposed approach for meeting small
detailed description of DOD’s strategy to implement
business participation goals and a demonstration of the
enterprise-wide cloud computing. The Department
proposed solution’s capabilities.
submitted the required report in January 2019.
Industry Reactions
Proposed Legislation
DOD’s acquisition strategy sparked resistance from many
Section 1035 of S. 1790, the Senate-passed version of the
commercial cloud vendors and industry observers who
FY2020 NDAA, would specify that the DOD CIO and the
opposed DOD’s intent to award the contract to a single
DOD Chief Data Officer, in consultation with the J6 C4 &
company. Oracle America and IBM both filed pre-award
Cyber Directorate of the Joint Staff and the DOD Chief
bid protests with the Government Accountability Office
Management Officer, must develop and issue DOD-wide
(GAO) against the JEDI Cloud solicitation. GAO denied
policy and implementing instructions regarding the
Oracle America’s protests and dismissed IBM’s protests.
transition of data and applications to the cloud.
Oracle America then filed a pre-award bid protest lawsuit
with the U.S. Court of Federal Claims; the court ruled
H.Rept. 116-84, which accompanies H.R. 2968, the House
against Oracle America in a July 12, 2019, decision.
Appropriations Committee-reported version of the FY2020
DOD appropriations act, highlights the committee’s
In filings associated with its bid protest lawsuit, Oracle
concern regarding DOD’s pursuit of a “single vendor
America in part alleged that the JEDI Cloud acquisition
contract strategy” for the JEDI Cloud procurement.
process was unfairly skewed in favor of Amazon Web
Accordingly, the House Appropriations Committee would
Services through potential organizational conflicts of
direct that no funds may be obligated or expended to
interest associated with three former DOD employees, each
migrate data and applications to the JEDI Cloud until the
of whom was involved to some degree in the early
DOD CIO provides a report to Congress expanding on the
development of the program. Two of these individuals were
Department’s plans to transition to a “multi-cloud, multi-
subsequently employed by Amazon. DOD investigations
vendor” cloud environment. The DOD CIO would also be
determined that Amazon Web Services had no conflicts of
directed to submit quarterly reports on the Department’s
interest and established that the actions of the individuals
cloud adoption and implementation strategy.
identified by Oracle America did not negatively impact the
procurement or grant Amazon Web Services an unfair
Considerations for Congress
competitive advantage. However, the investigations did
Some industry observers contended that a single award
identify individual violations of ethical standards
contract appears to contradict broader federal cloud
established by the Federal Acquisition Regulation (FAR),
computing implementation guidance and industry best
which directs government procurement activities to be
practices that stress the importance of multi-cloud solutions.
“conducted in a manner above reproach,” and for
Others pointed to the implementation approaches identified
government employees to strictly avoid “even the
by DOD’s Cloud Strategy that indicate the Department
appearance of a conflict of interest in Government-
expects the JEDI Cloud to serve certain enterprise-wide
contractor relationships.” These findings were reportedly
functions, performing as one component of a broader multi-
referred to the DOD Inspector General for further review.
cloud, multi-vendor DOD cloud system. Opponents of
DOD’s use of a single-award contract for the JEDI Cloud
Congressional Activity
program suggested that this tactic could restrict future
Enacted Legislation
competition for enterprise-wide DOD and cloud services.
Section 1064 of P.L. 115-232, the FY2019 National
Supporters of DOD’s approach argued that the JEDI Cloud
Defense Authorization Act (NDAA), requires the DOD
program’s requirement for offerors to develop platform-
Chief Information Officer (CIO) to conduct specified
agnostic applications and data schema suggests that the
enabling activities to support DOD’s cloud adoption
Department may be well equipped to migrate from any
initiative and to submit a report detailing the current status
service environment developed under the JEDI Cloud
and anticipated implementation of DOD’s cloud adoption
contract to another such environment.
initiative. The section also established a limitation on the
obligation or expenditure of 15% of authorized FY2019
funds for the initiative until the required report’s
Other Resources
submission. Section 1064 also requires 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 Report R45847, The Department of Defense’s JEDI Cloud
Program, by Heidi M. Peters
Section 8137 of P.L. 115-245, which provided FY2019
DOD appropriations, prevented the obligation or

expenditure of FY2019 funds to “migrate data and
applications to the proposed [JEDI] ... cloud computing
Heidi M. Peters, Analyst in U.S. Defense Acquisition
services” until 90 days after the Secretary of Defense
Policy
submitted to Congress (1) a plan to establish a DOD-wide
budget accounting system for funds requested and
IF11264
expended for cloud services, as well as funds requested and
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DOD’s Cloud Strategy and the JEDI Cloud Procurement

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