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US defence chiefs cut $1bn cloud contract with AWS partner amid anti-trust complaints

The US Department of Defense confirms it is revising down the cost and scope of a billion dollar cloud deal awarded to an AWS partner, after critics picked holes in the procurement process

The US Department of Defense has revised down the value and scope of a newly signed $1bn cloud deal with Amazon Web Services (AWS) partner Rean Cloud, following concerns about how it was awarded.

The DoD has confirmed the contract’s value now stands at $65m and, instead of working with multiple agencies within the organisation as originally intended, Rean will now work with just one to guide them on their journey to the cloud, the Washington Post reports.

The move is understood to have been taken after complaints were made about the procurement process used to award the contract, from a competition and transparency perspective.

Database software giant Oracle is among the parties protesting the deal, having filed a complaint with the US Government Accountability Office about the handling of the procurement.

Details about the $950m deal, awarded to Virginia-based managed service provider Rean, were confirmed on 7 February in a statement, with the firm stating the five-year contract would allow the DoD to procure cloud services through it in a more streamlined way.

“The agreement represents a groundbreaking model automating pricing and procurement so that government customers can quickly achieve full IT operations in the cloud,” the document reads.

The statement confirms Rean Cloud liaised with an internal unit inside DoD, in the run up to the contract award being made public to “facilitate prototyping and procurement of a full range of cloud adoption requirement”.

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And it is this unit, known as Defense Innovation Unit Experimental (DIUx), which is understood to have awarded the contract in the first place, as part of its wider remit to encourage innovation in the US military.

In the Washington Post report, Rean co-founder Sekhar Puli said the company has received no communication from the DoD about any change to the terms of its contract.

While much of the criticism of the deal centres on Rean’s partnership with AWS, but Puli has previously stressed the wording of the contract is such that it has license to work with any cloud provider the DoD requests.

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