Pentagon defends tender for single cloud provider

8 March 2018

Pentagon leaders have taken steps to reassure top technology companies that the tender to build an internet cloud network for the Department of Defence (DoD) will be open and fair.

On Monday, the Pentagon released its draft proposal to pick a single winner for its commercial cloud commuting contract, which some analysts believe could be worth around $10bn over the next 10 years.

Tim Van Name, deputy director of the Defence Digital Service, said having a single cloud provider would be the best approach because having several “would exponentially increase the overall complexity”, with the Pentagon having “to manage the seams between the applications, making it riskier and more difficult to manage”.

However, the announcement has alarmed industry players, who fear the losers could be locked out of the programme for a decade and Amazon’s web services unit, which already holds a $600m cloud contract with the Central Intelligence Agency, will be favoured.

In a statement, Microsoft said it was “disappointed” the Pentagon would be pursuing “a single cloud solution”.

“We believe the best approach is one that leverages the innovations of multiple cloud service providers,” it said.

Trade group Professional Services Council said the decision would inhibit innovation.

“Competition in the commercial marketplace is driving rapid innovation by technology companies – the DoD should position itself to take advantage of this innovation by not limiting itself to the offerings of one vendor,” it said. 

Last month, the Pentagon was criticised when it awarded a $950m contract to a partner of Amazon.com, Rean Cloud, to migrate agencies’ systems to the cloud. 

After an outcry from industry leaders and a legal challenge filed by software company Oracle, the Pentagon reversed its decision this week and announced it was scaling back the contract by 90% to $65m and narrowing its scope.

Responding to the concerns, Van Name pledged that the DoD’s cloud network tender would be an “open and fair competition”. 

“We want the best solution for the department – we have no favourites,” he said.

On Wednesday Pentagon leaders gathered companies to an Industry Day for commerical cloud aquisition in Pentagon City in an attempt to clear the air and clarify the government’s intentions.

Speaking at the event, David Krumm, Air Force brigadier general, stressed that the DoD needed to upgrade its antiquated technology as a matter of national security. 

“This is not another IT project – this is going to make a difference like few things have – to get data to our war fighters when and where he or she needs it,” he said. 

“Whichever one of you wins this, I am challenging you to bring your A-game.”

Ellen Lord, Pentagon undersecretary for technology and logistics, said: “If we keep doing business the same old way, our software will be outdated – it will cost far more than it needs to and we won’t be able to attract the best software talent and we’ll lose our technological edge,” she said. 

“If that happens, it won’t be because the US doesn’t have access to great technology and talent, it will be because we, and frankly some of our existing software providers aren’t able or willing to adapt.”

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