Pentagon criticized for awarding $950 million contract to Amazon partner
The Pentagon is reducing a cloud deal with Virginia-based company Rean Cloud potentially worth $950 million to $65 million amid criticism of awarding the contract to the Amazon partner.
Rean Cloud was awarded the contract last month. As part of the deal, Rean Cloud was to provide Pentagon agencies direct access to cloud services using an automatic pricing and procurement model. The Pentagon has been working to move its computing systems to the cloud in order to maintain a competitive edge over potential adversaries like China.
The deal drew criticism, particularly by Oracle, when it was awarded to Rean Cloud for favoring Amazon Web Services (AWS) and its partners. The Pentagon was also criticized for not being vocal enough in announcing the awarded contract.
In addition to scaling back the deal by over 90%, Rean Cloud will only assist in moving the U.S. Transportation Command to the cloud instead of the whole Defense Department. The company completed last year a project for the U.S. Transportation Command, dubbed USTRANSCOM, which involved helping the Defense Innovation Unit Experimental (DIUx) move dozens of legacy applications to a government-approved, commercial cloud-based solution.
News of the scaled back Rean Cloud contract occurred just a couple days before the Pentagon hosts “industry day” to discuss its planned Joint Enterprise Defense Infrastructure (JEDI) cloud acquisition. The purpose of JEDI is to centralize the U.S. Department of Defense’s data and systems in one big cloud. The contract could be worth over $2 billion. It was thought that the JEDI contract could be tilted in AWS’s favor when Rean Cloud landed the potential $950 million contract in February.
“After reviewing the production agreement recently awarded to Rean Cloud LLC, the department has determined that the agreement should be more narrowly tailored to the original scope of the prototype agreement, which was limited to United States Transportation Command applications,” Army Col. Rob Manning said in a statement.
“We applaud the Defense Innovation Unit Experimental’s (DIUx’s) efforts to advance the department’s initiative to accelerate adoption of cloud technologies. After consideration, however, the Department has decided to modify the production agreement to descope the ceiling to $65,000,000 and limit the scope of work to services being only available to USTRANSCOM.”
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