The U.S. Defense Department today reaffirmed its controversial choice to award its $10 billion JEDI cloud computing contract to Microsoft Corp., six months after officials said they would re-evaluate the decision.

The Joint Enterprise Defense Infrastructure contract will be worth as much as $10 billion over 10 years. Under the deal, Microsoft is set to provide the Defense Department with cloud infrastructure and services to help modernize its information technology operations.

The Defense Department said in March that it would re-evaluate the decision to give Microsoft the contract after a legal challenge from Amazon Web Services Inc. AWS was widely seen as the front runner to nab the deal. The Amazon.com Inc. subsidiary has a “commanding” lead over other cloud providers, according to a Gartner Inc. report published this week, and already provides cloud services to the U.S. intelligence community. 

In its legal challenge to JEDI, AWS charged that Microsoft’s winning bid for JEDI contained a “host of errors” that the Defense Department did not properly take into account. The complaint led a court to issue a temporary injunction pausing JEDI earlier this year. Judge Patricia E. Campbell Smith wrote in her ruling that AWS “likely is correct” that the Defense Department made an evaluation error when assessing Microsoft’s bid, adding the error was “quite likely” material.

The decision to keep JEDI with Microsoft comes about six months after the Defense Department first said it would re-evaluate the contract award decision. Officials had originally asked for 120 days but later requested an extension. The department said it needed the extra time to “reopen limited discussions related to certain aspects of the offerors’ pricing proposals.” 

In a statement today reaffirming Microsoft as the winner, the Pentagon said that the “Department has completed its comprehensive re-evaluation of the JEDI Cloud proposals and determined that Microsoft’s proposal continues to represent the best value to the Government. The JEDI Cloud contract is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract that will make a full range of cloud computing services available to the DoD.”

However, work on JEDI won’t begin quite yet because of the injunction that was issued earlier this year in response to the concerns raised by AWS. The Pentagon said today that “while contract performance will not begin immediately due to the Preliminary Injunction Order issued by the Court of Federal Claims on February 13, 2020, DoD is eager to begin delivering this capability to our men and women in uniform.”

A Microsoft spokesperson told CNBC that “we appreciate that after careful review, the DoD confirmed that we offered the right technology and the best value. We’re ready to get to work and make sure that those who serve our country have access to this much needed technology.”

For its part, Amazon said in a statement that it won’t back down.

“We strongly disagree with the DoD’s flawed evaluation and believe it’s critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence,” the long statement in support of its position read. “The question we continue to ask ourselves is whether the President of the United States should be allowed to use the budget of the Department of Defense to pursue his own personal and political ends? Throughout our protest, we’ve been clear that we won’t allow blatant political interference, or inferior technology, to become an acceptable standard.”

It added that it intends to continue the fight. “Although these are not easy decisions to make, and we do not take them lightly, we will not back down in the face of targeted political cronyism or illusory corrective actions, and we will continue pursuing a fair, objective, and impartial review,” it said.

With reporting from Robert Hof

Photo: gregwest98/Flickr