Microsoft wins US Department of Defense’s $10 billion contract

Dana Deasy, US Department of Defense Chief Information Officer. Image courtesy of U.S. Air Force Master Sgt. Angelita M. Lawrence.

The US Department of Defense (DOD) has awarded an enterprise general-purpose cloud contract to Microsoft, according to a press release by the DOD. This continues its strategy of a “multi-vendor, multi-cloud environment” as the department’s needs are diverse and cannot be met by any single supplier. This contract will address critical and urgent unmet warfighter requirements for modern cloud infrastructure at all three classification levels delivered out to the tactical edge, according to the statement.

The base contract period is two years with a $1 million guarantee. The department projects that user adoption will drive an estimated $210 million of spending during the two year base period. The DOD will “rigorously review contract performance prior to the exercise of any options” said the statement.

The DOD also announced that the “firm-fixed-price, indefinite-delivery/indefinite-quantity contract” has a ceiling value of $10 billion over a period of 10 years, if all options are exercised. The Joint Enterprise Defense Infrastructure (JEDI) Cloud contract will provide enterprise level, commercial Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) to support DOD business and mission operations. The expected completion date is October 24, 2029, if all options are exercised.

This award is the conclusion of a process that began with the release of the first RFI to industry nearly two years ago. Over the last two years the Department of Defense has awarded more than $11 billion across 10 separate cloud contracts. Additional contracts are planned for both cloud services and complementary migration and integration solutions necessary to achieve effective cloud adoption.

The acquisition process “was conducted in accordance with applicable laws and regulations”. The process cleared review by the GAO and Court of Federal Claims. At the outset the competition included four different offerors. Prior to the award, the department conferred with the DOD Inspector General, which informed the decision to proceed. According to news reports, the four offerors were Amazon, Microsoft, Oracle and Rean Cloud (acquired by Hitachi last year), with Google dropping out because of an employee petition against participating in military projects.

The Department “continues to assess and pursue various cloud contracting opportunities to diversify the capabilities of the DoD Enterprise Cloud Environment”, said the statement. 

“The National Defense Strategy dictates that we must improve the speed and effectiveness with which we develop and deploy modernized technical capabilities to our women and men in uniform,” DOD Chief Information Officer Dana Deasy said. “The DOD Digital Modernization Strategy was created to support this imperative. This award is an important step in execution of the Digital Modernization Strategy.”