The Pentagon
Amazon Web Services has filed an objection to the motion by the Department of Defense that would allow it to change details and pricing in the award of the $10 billion Joint Enterprise Defense Infrastructure cloud services contract. The DoD wants to make changes to the Microsoft winning proposal for those cloud services after Judge Patricia Campbell-Smith granted an AWS motion that stopped all work on the JEDI contract while the AWS contract protest is heard.
The order to stop work on the JEDI project was filed on March 6, 2020, but was only unsealed on March 20. Judge Campbell-Smith found that the AWS protest was likely to succeed, and as a result issued a temporary restraining order halting work by Microsoft and the DoD. The DoD then proposed a 120 day delay in further consideration of the award while it worked with Microsoft to resolve the issues raised in the bid protest.
Under the DoD plan, only Microsoft would be able to change the technical deficiencies and adjust the pricing in its proposal.
By allowing Microsoft to resolve the issues in the AWS protest, the protest would have no merit, but under the DoD plan, only Microsoft would be able to change the technical deficiencies and adjust the pricing in its proposal. AWS would not be given the opportunity to adjust its pricing.
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The pricing is an issue because one reason for the award to Microsoft was based on the type of storage proposed by each company. Microsoft’s bid included less expensive storage than the “highly accessible” storage required by the RFP, specifically what the company called “highly available” storage. According to the specifications, highly accessible was specifically intended to mean online storage. The less expensive solution is what’s called “nearline” storage, which isn’t the same thing. Online storage is storage that’s always available (think your computer’s hard disk) while nearline storage is for infrequently used storage (think a backup DVD).
In their bid, AWS proposed online storage as required in the RFP. Microsoft apparently proposed the much cheaper nearline solution. One reason for the protest is that AWS said that Microsoft’s proposal was not complaint.
The cost of compliance
The cost of storage is a major factor in the price of cloud computing, and online storage will be much more expensive. Nearline storage is cheaper, but it can take several seconds to load, spin up and access the data that’s required. This difference in price could easily be enough to make Microsoft’s proposal more cost competitive.
The only way that the two proposals could be considered fairly is if both proposed the same type of online storage as required in the RFP. AWS is protesting because the company believes that the government was in error in permitting a non-compliant but cheaper solution to win.
The reason that AWS is objecting to the DoD plan to revise Microsoft’s solution is because it’s not fair to not allow AWS to also adjust its proposal. Normally federal contracting rules are strict when it comes to compliance with the specifications, with non-compliant solutions either being dropped, or allowing the bidders to fix their proposals before the award is made, and then the award is made on the basis of any final bids.
What’s next
The judge will have to rule on the DoD request to delay 120 days so that it can adjust the Microsoft proposal, and she will have to take the AWS objection into account. While it’s impossible to predict accurately what the judge will decide, it seems unlikely that the government will prevail in its request. To do so would result in even more protests, not only from AWS but also from the other cloud services who were previously dropped as being non-compliant, such as Oracle. A more likely outcome is that the AWS protest will be upheld. At that point the court may ask the bidders to negotiate a solution, or the judge may order the government to throw out the award and start again.
“It’s clearly not surprising, given the political environment we’re in,”
said Jack Gold, principal analyst at J. Gold Associates. “It’s also true that for a contract of this size there’ll be a protest. It’ll work its way through the courts for a year or two.”
But Gold cautions that there are other considerations. “What is the impact on the military? Are they critical applications or are they just nice to have?”
However, a delay to JEDI isn’t exactly a catastrophe for the government. “Even though a DoD-wide award may now be delayed, individual agencies are already deep into their cloud transformation,” said Jeff Valentine, CTO of CloudCheckr. “As long as there are alternative contract vehicles, those projects can continue to modernize and save taxpayer money without delay.”
“Other government agencies at the federal and state level will continue to migrate to the cloud despite who might be designated as the dominant force in the industry,” said Sean Feeney, cloud practice director at Nerdery.
Another direction
Marty Puranik, CEO of Atlantic.net, a could service provider focusing on healthcare, says that there’s really a better way than a single massive award. “There should be a federal government API (application programming interface) that every cloud has to communicate with. Then you’d have true cloud interoperability. Ideally the API would be set by the federal government.”
Puranik suggests that the government’s FedRAMP, a government-wide program that provides a standardized approach to security, could be the lead agency in providing this API. FedRAMP is already the standard means of getting access to cloud services for the federal government, and it sets compliance and access standards.
As to which agency might actually create the API and related interface standards, Puranik suggests that NIST or another standards agency could be involved.
“Maybe within FedRAMP, all bidders have to communicate with this federal API,” he said. “Industry would adopt it.”
Puranik noted that a federal API would also simplify the use of multiple cloud providers by government agencies. Multi-cloud is already a growing practice in industry for both security and redundancy, he said. “It’s a good idea to have multiple clouds for something as important as the federal government,” he said.
As to the future of JEDI, Jack Gold said it right when he predicted it could take years to go through this.
