New NSA $ 10 Billion ‘Secret’ Cloud Contract Awarded to AWS Already in Litigation


A “secret” $ 10 billion cloud computing contract recently won by Amazon Web Services of the United States National Security Agency was quickly criticized by Microsoft Corp., which protested the move.

The one-time award contract, which was first reported in a July 30 article by Washington Technology, is planned by the NSA to bring commercial cloud computing capabilities to the agency. The agency wants to move away from its existing on-site infrastructure, the story continues.

Few details on the secret contract, which is codenamed “WildandStormy”, are available, but after the AWS bid was awarded, Microsoft was made aware of the decision and promptly lodged a protest with the Government Accountability Office. (GAO) of the United States as part of the award protest. rules.

The contract would help the NSA with its “Hybrid Compute Initiative,” which aims to allow the agency to decide what information it wants to keep in a commercial cloud infrastructure and what it wants to keep out of those facilities, the article reported. .

Microsoft’s protest to GAO says “the NSA did not conduct a proper assessment” of the offers, and if it had, Microsoft’s proposal would have been chosen over AWS, according to the article .

The NSA has signaled its intention since 2020 to move its massive data pools to commercial cloud providers so the agency can meet its vast storage, processing and analytics needs, according to an Aug. 10 article posted by Nextgov. The massive amounts of data processed by the agency have set its ability to evolve, the story continued.

In an email response to Corporate AI, the NSA confirmed the sequence of events but declined to comment further on its cloud plans or the status of the contract.

“The NSA recently awarded a contract for cloud computing services to support the agency,” a spokesperson said in the statement. “The unsuccessful offeror filed a claim with GAO. The Agency will respond to the protest in accordance with appropriate federal regulations. “

An Amazon spokesperson declined to comment on the case and referred all questions to the NSA.

A Microsoft spokesperson confirmed that the company is disputing the NSA’s original price for the matter.

“Based on the decision, we are filing an administrative protest through GAO,” the spokesperson said in a statement. “We exercise our legal rights and we will do so with care and responsibility. “

A GAO decision is expected by October 29, according to the July 21 protest file.

Not the first cloud contract battle between AWS and Microsoft

If the story of a $ 10 billion government cloud contract involving AWS and Microsoft sounds familiar, it’s because a similar case was already in the news just a month ago when the Pentagon’s JEDI cloud was canceled after two years of controversy.

The JEDI contract, which was awarded to Microsoft Corp. in late 2019 under the Trump administration, was immediately criticized by AWS, which challenged the contract award in court. Amazon accused the Trump administration of pushing to attribute the deal to Microsoft in part because of its personal distaste for Amazon and its then CEO Jeff Bezos.

The JEDI (Joint Enterprise Defense Infrastructure) cloud request for proposal (RFP) will now be reissued, according to the Pentagon, with specific language calling for future contract specifications to use a multi-cloud approach, as is the practice of most businesses today.

The US Department of Defense (DOD) said in July that the JEDI contract and the original tender had been canceled to allow the agency to meet new and evolving requirements of cloud technologies, including an approach critical multi-cloud rather than a single cloud provider as stipulated in the original RFP. The original contract approved in 2019 no longer meets the needs of the DOD, which is why it was canceled, the statement said.

The new RFP contract, known as Joint Warfighter Cloud Capability (JWCC), will be a multi-cloud / multi-vendor indefinite delivery-indefinite quantity (IDIQ) contract. The JWCC replaces the now obsolete JEDI contractual specifications.

Interestingly, the JWCC is looking for “proposals from a limited number of sources, namely Microsoft Corp. and Amazon Web Services, as available market research indicates that these two vendors are the only Cloud Service Providers (CSPs) capable of meeting the department’s requirements, ”however, the DOD will also conduct research to determine if other CSPs US-based hyperscale may also meet DOD requirements and should be included in the contract tender. This could include companies such as Oracle Corp., Google Cloud, and IBM Cloud.

This is the challenge of large contracts: analysts

R. “Ray” Wang, Analyst

R. “Ray” Wang, senior analyst and founder of Constellation Research, said Corporate AI that the price of winning such lucrative contracts means that it ultimately comes as no real surprise that the loser protests after the bids are awarded to a rival.

“The size of the contracts is now in the billions given the specific needs of the government,” Wang said. “Amazon and Microsoft both have dedicated teams to win in this market. The challenge is the fierce competitiveness of transactions. Each agreement will be called into question given what is at stake. “

At the same time, however, “there really is a lot to do,” Wang said. “Salespeople should just take a deep breath and consider that there will be at least two players in every trade. It will be necessary to diversify the suppliers to avoid the supplier risk. You want a diverse set of strong suppliers so the government has choice, competition, and agility in its supplier base.

Some of those future contracts could even be awarded to smaller cloud providers, he said. “For example, don’t overlook Google Cloud Platform and expect a small minority vendor to win a few deals. Multi-cloud is here to stay. We need vendor diversity and the agility that resulting.

Dan Maycock, Analyst

Dan Maycock, senior data engineering analyst at Loftus Labs, said the latest situation surrounding the NSA contract case illustrates the problems with these huge government contracts when awarded.

“There are real concerns that a government agency is sourcing cloud solutions from any major vendor, but there is also a need to move to more modern data solutions,” Maycock said. “It creates a ‘necessary evil’ by having an agency like the NSA partnering with a company like Amazon. On the one hand, you have agencies that need to partner with big cloud providers, but there are enough loopholes in a supplier’s business model or portfolio that it leaves them open to lawsuits from other companies that have nothing to lose but everything to gain from rocking the boat. “

Ultimately, this model hurts the very agencies that are trying to improve their technology infrastructure, he said.

“What it does is it puts these agencies further away, waiting to resolve the lawsuits before moving forward with the particular initiative, and it makes us all worse – or potentially less secure, according to the company. ‘agency,’ Maycock said. “These are very large sums of money, so we’ll continue to see this kind of back-and-forth happening as the government moves to the cloud.”

The process may need to be changed for real progress to finally occur, he said. “It will be interesting to see what changes are made to the procurement process or the cloud landscape to get the government to move more aggressively into the cloud computing space. “

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