According to the Pentagon, it cancelled a cloud-computing agreement with Microsoft that was disputed. This contract could have eventually been worth $10 billion. Instead, it will pursue deals with Amazon and Microsoft as well as other cloud service providers.

“With the changing technology environment, it has become obvious that the JEDI Cloud contract has been long delayed and no longer meets the requirements for filling the DoD’s capability gap gaps,” said the Pentagon in a Tuesday statement.

Although the statement didn’t mention Amazon’s legal challenges to the $1 million Microsoft contract, it did mention that Amazon had extended its legal challenge to the Pentagon. Amazon claimed that the Microsoft contract was marred by politics. This included Trump’s animus toward Jeff Bezos (who resigned Monday as chief executive officer). Bezos also owns The Washington Post. Trump has often criticised this newspaper.

John Sherman, the Pentagon’s chief information officers, said Tuesday to reporters that, despite the long legal battle with Amazon, “the landscape had evolved” with new opportunities for large-scale cloud computing. He stated that it was now time to start again and look for multiple vendors.

Sherman stated that JEDI would be replaced by a new program called Joint Warfighter Cloud Capability and that Amazon and Microsoft will “likely” be awarded parts of this business. However, neither is certain. Sherman suggested that the three largest cloud service providers, Google, IBM, and Oracle, might also be eligible.

Microsoft responded to the Pentagon’s announcement by saying, “We understand DoD s reasoning and we support them and all military members who need the mission-critical 21st Century technology JEDI would provide.” The DoD was faced with a difficult decision: continue to fight a long-running litigation battle, or find a new path.

Amazon stated that it understood and agreed with the Pentagon’s decision. The company stated that it understood and agreed with the Pentagon’s decision.

Oracle declined to comment Tuesday, despite having previously sought the JEDI contact. Separately, IBM stated that it was reviewing the new Pentagon approach. Google also said that it would be happy to discuss it with Pentagon officials.

JEDI began with a $1 million contract award to Microsoft. This was an initial step in a 10-year agreement that could have been worth $10 billion. It will be replaced by a five year program. Sherman stated that no contract value has been determined, but that it will be “in billions.” Sherman also said that the government will negotiate with Microsoft the amount it will receive for its 2019 termination.

Amazon Web Services, the market leader in cloud computing services, was long considered to be a top candidate for running the Pentagon’s Joint Enterprise Defense Infrastructure project (JEDI). This project was designed to store and process large amounts of classified information, which would allow the U.S. to improve communication with soldiers on the ground and to use artificial intelligence to accelerate its war planning.

Just after the contract was awarded to Microsoft in Oct 2019, it became embroiled in legal disputes. Amazon Web Services, the losing bidder, argued that the Pentagon’s process was unfair and flawed, as well as that it was improperly influenced from politics.

The Pentagon was hinting at the possibility of scrapping the contract this year, stating in May that it felt the need to reconsider its options following a rejection by a federal judge in April of a Pentagon attempt to have key Amazon parts of the lawsuit dismissed.

Trump’s political connection has made the JEDI scandal a unique one. The Defense Department inspector general concluded in April 2020 that the contracting process met legal and government purchasing standards. Although there was no evidence that the White House interfered in the contract award process’s execution, the inspector general concluded that investigators were unable to fully examine the matter as the White House refused unrestricted access to witnesses.

The Pentagon confirmed Microsoft as the winner five months later. However, work was still stalled due to Amazon’s legal challenge.

The April 2020 report by the inspector general did not conclude that Redmond, Washington-based Microsoft Corp. had been correctly declared the winner. It examined the legality and properness of the decision-making process. It also looked into allegations of unethical behavior from Pentagon officials involved in this matter, and determined that the outcome was not affected by any ethical lapses.

The review found no evidence that the White House had pressured the Pentagon to support the Microsoft bid. However, it did state that it was unable to definitively determine the extent of White House interactions and decisions with the Pentagon decision makers.