DOD's latest cloud moves leave plenty of questions

The Department of Defense answered several important questions about its commercial cloud strategy on March 7, but the industry day and draft solicitation for the Joint Enterprise Defense Infrastructure cloud acquisition raised a few new ones.

DOD officials confirmed that they intend to make a single award, and set an aggressive timeline to finalize that award by the end of the fiscal year. Both points have prompted some grumbling from the industry.

The Coalition for Government Procurement, an association that represents much of the federal IT contractor community, posted a critique that said a single award, indefinite delivery/indefinite quantity contract "is being proffered notwithstanding the fact that there exists a statutory and regulatory preference for multiple award IDIQs."

"A single-award contract vehicle creates the ultimate barrier to entry for … the very capabilities DOD needs to maintain the technological advantage necessary to defend this nation," the coalition argued.

IBM General Manager for Federal Sam Gordy was similarly critical. “The Pentagon would never limit the Air Force to flying only cargo planes for every mission," Gordy told Washington Technology, an FCW sister publication. "Locking the entire U.S. military into a single, restrictive cloud environment would be equally flawed.”

"I think what you're seeing in industry is a lot of head-scratching," Oracle Senior Vice President Ken Glueck told FCW. "This seems to be moving in a technical direction that is not reflective of the way the private sector is consuming scalable, secure cloud."

Amazon Web Services, the firm seen by many as a leading contender for the JEDI award, sidestepped the single-award question. “We are confident commercial cloud will drive innovation," an AWS spokesperson said. "As we have always said, an open and competitive bidding process allows for the customer to thoroughly analyze the various providers and select the solutions that best meet their needs."

The Coalition for Government Procurement noted that the Federal Acquisition Regulation "requires DOD to document its decision/rationale for a single award," and urged DOD to make that documentation public. While no such document has yet been shared, DOD officials were frank in explaining why they've been unmoved by the multiple-award argument over the last few months.

"The lack of standardization and interoperability today creates pretty significant barriers to accessing our data where and when it is needed," Defense Digital Service Deputy Director Tim Van Name told reporters on March 7. "We believe that a multiple-award cloud would exponentially increase the overall complexity. The systems in different clouds, even when designed to work together, would require complex integration, which raises the bar for the development, testing and ongoing maintenance."

"We’re confident that the single award is the best thing for the department," he said.

And while Van Name and other officials stressed that the team that wins the single award could be structured in any number of ways, the general reaction has been that the draft request for proposals points to an award centered on a single cloud service provider.

It would be possible for a systems integrator to be the prime, REAN Cloud Managing Partner Sekhar Puli told FCW, but "it's going to difficult" if DOD demands a single CSP. 

"What I’m reading makes me believe … that they’ll pick a single CSP" as the prime, Puli said in a March 9 interview. "But I’ve learned my lesson the hard way. Common sense doesn't always prevail."

What to make of the shrinking OTA

Puli was alluding to the week's other big cloud news from DOD -- a decision to dramatically lower the ceiling of an Other Transaction Authority agreement with his firm from $950 million to $65 million.

That five-year agreement, awarded in February by the Defense Innovation Unit Experimental, originally allowed REAN to provide cloud migration services DOD-wide. On March 5, however, DOD told reporters it had "narrowly tailored" the deal to cover only U.S. Transportation Command, for whom REAN had done prototype work to win the award. 

As of late on March 9, Puli said, he still didn't know why the change has been made. "A couple of days ago we got a email that told us, 'your contract had been reduced,' but nothing more than that," he said.

Oracle filed a protest against the OTA award, but the Government Accountability Office has not yet ruled, and Puli dismissed the protest as "smoke and mirrors."

"There is something else that has caused this change, that unfortunately is not public," he said.

One longtime industry executive told FCW that while OTAs can be a valuable tool for newer technologies and services, DIUx's deal with REAN may simply have been too big and broad in scope to bypass the traditional acquisitions process. The fear now, he said, is that the controversy around this award could make it harder for agencies to use OTAs even on a smaller scale for legitimate purposes.

Puli pushed back on that argument, noting that another DIUx OTA for $750 million has so far gone unchallenged. "So is $750 million ok, and $950 million not?" he asked. "And if that’s the case, then fine — then why not take the contract down to 750? Or change [the other award] from 750 to $65 million as well?"

While REAN is obviously unhappy to lose the acquisition for working across DOD, Puli said, his real frustrations are two-fold.

First, he said, the OTA has been conflated with JEDI, and wrongly seen as a nod toward selecting Amazon as DOD's preferred CSP. REAN's award is "completely independent of JEDI," Puli stressed, and his firm works with Microsoft and Google as well as AWS. 

"We don’t want to be in just one cloud as a systems integrator," he said. "We are the movers. … Where you want to live is not a decision that we will make for you." 

And second, he said, announcing the change through the media was not only unpleasant, but unnecessary.

There's no requirement "saying you have to issue task orders for the full $950 million," Puli said. "They could have just squashed it behind the doors and said [to other DOD components], 'don’t issue any task orders.'"