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Pentagon Will Allow Companies to Rebid for JEDI Contract

Defense procurement officials have asked a federal judge for a 120-day remand to “reconsider its evaluation” of the up-to-$10 billion cloud contract.

The Pentagon has asked a federal judge for a 120-day remand to “reconsider its evaluation” and take corrective action on the lucrative JEDI cloud contract it awarded to Microsoft in October, which could be worth as much as $10 billion over the next decade.  

In a legal filing Thursday evening, the Pentagon asked Judge Patricia Campbell-Smith for an adjournment to address “various aspects” of its JEDI evaluation highlighted by Amazon, which protested the JEDI award in November.

The Pentagon plans to tweak the JEDI solicitation and accept “limited proposal revisions,” according to the filing, allowing the companies to rebid the contract.  

“A remand here is in the interests of justice because it will provide the agency with an opportunity to reconsider the award decision at issue in light of AWS’s allegations, this court’s opinion, and any new information gathered during the proposed remand,” the filing states.

Related: Esper Says White House 'Never' Pressured Him on JEDI

Related: Microsoft Wins Massive JEDI Cloud Contract

The Pentagon’s decision comes after Campbell-Smith said Amazon was likely to succeed in proving the Pentagon made a mistake evaluating Microsoft’s proposal regarding a “noncompliant storage solution” the company proposed. In the judge’s unsealed opinion granting an injunction on work under JEDI, she evaluated only one of several evaluation flaws alleged by Amazon, and did not address Amazon’s allegations of political interference by President Trump.

“We are pleased that the DoD has acknowledged ‘substantial and legitimate' issues that affected the JEDI award decision, and that corrective action is necessary. We look forward to complete, fair, and effective corrective action that fully insulates the re-evaluation from political influence and corrects the many issues affecting the initial flawed award,” an Amazon spokesperson said.

In a statement, Microsoft defended the Pentagon’s decision and said it remains confident its bid was “technologically superior.”

“We believe the Department of Defense made the correct decision when they awarded the contract,” said Microsoft spokesperson Frank Shaw. “However, we support their decision to reconsider a small number of factors as it is likely the fastest way to resolve all issues and quickly provide the needed modern technology to people across our armed forces. Throughout this process, we’ve focused on listening to the needs of the DoD, delivering the best product, and making sure nothing we did delayed the procurement process. We are not going to change this approach now.”

In a statement to Nextgov, the Pentagon maintained JEDI was awarded properly.

"While we disagree with the Court’s decision, we must address the findings in the court’s order with the intent of ensuring our warfighters will get this urgent and critically needed technology as quickly and efficiently as possible," a Pentagon spokesperson said. "As such, the Department determined that the best and most efficient path forward is to conduct a re-evaluation of the proposals in order to address the Court’s noted concerns. The Department maintains the JEDI Cloud contract was awarded based upon a fair and unbiased source selection process. The process consisted of a fair evaluation of proposals based solely on the solicitation’s stated criteria and the proposals submitted."

JEDI is considered one of the Pentagon’s most important contracts in years and through it, officials hope to link together worldwide military systems at all classification levels from various military departments into a single, unified architecture. 

Currently, Amazon is the only company with the required security accreditations to host secret and top secret classified data, though Microsoft is working towardmeeting those requirements. 

The contract has generated significant controversy, with Trump wading into the battle over the summer, saying he was “looking into” JEDI after hearing complaints from Microsoft, IBM and Oracle. 

In total, the contract has been legally protested four times in the two years.