IBM Challenges Pentagon's $10 Billion Cloud-Computing Effort Days Before Bids Are Due

IBM is challenging the Defense Department's decision to turn to a single provider for its $10 billion (roughly Rs. 74,000 crores) department-wide cloud-computing infrastructure, a company executive said Wednesday. This latest legal challenge to complicate the Pentagon's plans comes just days before bids are due.

An IBM executive familiar with the company's strategy confirmed Wednesday that the company has filed a pre-award bid protest with the Government Accountability Office, which rules on bid protests.

The contract, known as the Joint Enterprise Defense Infrastructure (JEDI), calls for the creation of a massive cloud-computing system that can enable new weapons capabilities and store classified data. Expected to absorb some of the Pentagon's existing cloud efforts, the JEDI cloud is considered a "pathfinder" effort that the Defense Department will build upon for decades. Whichever company is awarded the contract will not only receive billions of dollars in federal funding but have a strong foothold from which to compete for other opportunities.

Bids are due Friday, and Amazon Web Services, Microsoft, IBM, and Oracle are expected to compete for the opportunity. Amazon is largely considered a front-runner for the contract because it has been the CIA's primary cloud-service provider for years. Google announced this week that it would not bid on the contract.

Defense Department officials said in early March that the $10 billion, 10-year contract would be bid out to a single cloud provider.

The Defense Department has made the case that using more than one provider would add needless complexity.

"We've never built an enterprise cloud," said Dana Deasy, the Pentagon chief information officer overseeing the process. "Starting with a number of firms while at the same time trying to build out an enterprise capability just simply did not make sense."

Amazon executives have praised that approach in media interviews, saying the Defense Department does not yet have the technical know-how and workforce expertise to manage numerous providers.

IBM, Microsoft and Oracle have sharply criticised the government's single-provider approach for the past six months, saying that turning to a single provider would lock the government out of innovations happening at other companies, and increase costs by shutting out would-be competitors.

IBM's bid protest itself has not been made available by the company. But Sam Gordy, head of the company's federal business, described elements of IBM's strategy for the protest in an interview Tuesday with The Washington Post.

The bid protest challenges the government's decision to turn to a single provider for the contract, echoing a legal challenge that software giant Oracle filed in early August. But IBM took that criticism a step further in arguing that the single-award approach would conflict with the White House's "Cloud Smart" strategy, which emphasises leveraging the best approaches from government and commercial industry.

"Given what DOD is trying to do with this cloud, a single award - and lock-in for 10 years - is completely contrary to their objectives," he said. "This DOD cloud award is completely contrary to what the [Trump] administration has been saying as far as 'cloud-smart.' "

Gordy also reiterated concerns that the procurement could be biased in favor of Amazon. The company's competitors are worried that Amazon has an inside track to the JEDI award because of its earlier work with the CIA, and because the request for proposals includes certain government IT certifications that only Amazon is likely to meet. Those federal IT certifications played a central role in Google's decision to drop out of the competition. IBM executives say the company will have "some, but not all" of the required certifications as of the Friday due date.

"There are elements of the [JEDI request for proposals] that clearly indicate a certain vendor in mind," Gordy said Tuesday.

The company separately described elements of its legal strategy in a draft blog post that is to be published on the company's website. In the post, IBM said the Pentagon's single-vendor approach for the JEDI contract would further undermine the department's cybersecurity posture.

"JEDI's single-cloud approach also would give bad actors just one target to focus on should they want to undermine the military's IT backbone," the company wrote in a draft shared with The Post. "The world's largest businesses are increasingly moving in a multi-cloud direction because of security, flexibility and resilience; the Pentagon is moving in precisely the opposite direction."

IBM executives seem to have no qualms about the possibility that a deluge of legal actions could obstruct the contract entirely, saying it would be better to restart the process and turn to multiple vendors.

"Getting it off the ground if you're doing it the wrong way doesn't serve the nation," Gordy said. "Better to do it the right way."

© The Washington Post 2018