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Pentagon asks Amazon, Google, Microsoft and Oracle for bids on new cloud contracts

Andy Jassy, chief executive officer of Amazon.Com Inc., during the GeekWire Summit in Seattle, Washington, U.S., on Tuesday, Oct. 5, 2021.

David Ryder | Bloomberg | Getty Images

The U.S. General Services Administration said Friday that the Defense Department has solicited bids from Amazon, Google, Microsoft and Oracle for cloud contracts.

The outreach comes after the Pentagon set aside a highly contested $10 billion contract that Microsoft had won and Amazon had challenged. The value of the new contracts is not known, but the Defense Department estimates it could run into the multiple billions of dollars.

The new effort, known as Joint Warfighting Cloud Capability, or JWCC, appears like it will bolster the top providers in global cloud infrastructure, Amazon and Microsoft, although it could also provide more credibility to two smaller entities.

“The Government anticipates awarding two IDIQ contracts — one to Amazon Web Services, Inc. (AWS) and one to Microsoft Corporation (Microsoft) — but intends to award to all Cloud Service Providers (CSPs) that demonstrate the capability to meet DoD’s requirements,” the GSA said in its announcement.

An indefinite delivery, indefinite quantity, or IDIQ, contract includes an indefinite amount of services for a specific period of time.

The GSA said that only two U.S. cloud infrastructure providers, Amazon and Microsoft, appear able to comply with all of the Pentagon’s requirements, which include “tactical edge devices” that can operate outside of traditional data centers.

Amazon and Microsoft are the two companies that were the finalists for a single Joint Enterprise Defense Infrastructure contract. That contract was meant to go to a single provider and was expected to be worth up to $10 billion over 10 years. Microsoft won it in 2019, Amazon filed a protest and ultimately in July the Pentagon chose to cancel the contract. Andy Jassy, currently Amazon’s CEO and previously head of AWS, argued that there was political interference in the award of the contract.

The Pentagon expects each of the IDIQ contracts to have a three-year base period and two year-long option periods.

Representatives of Amazon, Google and Microsoft didn’t immediately respond to requests for comment. Oracle declined to comment.

This is breaking news. Please check back for updates.

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