Oracle and IBM are officially out of the race for a key $10 billion defense cloud contract as Amazon and Microsoft move ahead (ORCL, IBM, AMZN, MSFT)

Chip Somodevilla / Staff

Microsoft and Amazon will be moving forward in the bid for the $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract, a Department of Defense spokesperson confirmed.
This means that Oracle and IBM will not be considered for this Pentagon contract, which will see military data move to the cloud.
The JEDI contract is expected to be awarded by mid-July at the earliest, the Department says.
The Department of Defense also concluded that there was no conflict of interest on Amazon’s part in the JEDI procurement process, contrary to claims made by Oracle in a lawsuit.

Microsoft and Amazon will be moving forward in the procurement process for a $10 billion cloud contract with the Pentagon, a Department of Defense spokesperson confirmed to Business Insider on Wednesday.

Since last summer, cloud vendors Microsoft, Amazon, Oracle, and IBM have been competing for the Joint Enterprise Defense Infrastructure contract, which a winner-take-all contract that aims to move sensitive military data to one — and only one — cloud platform.

"After evaluating all of the proposals received, the Department of Defense has made a competitive range determination for the Joint Enterprise Defense Infrastructure Cloud request for proposals, in accordance with all applicable laws and regulations," said Department of Defense spokeswoman Elissa Smith. "The two companies within the competitive range will participate further in the procurement process."

Read: As bidding closes, Amazon’s cloud is the favorite to win a $10 billion defense deal. Here’s why everybody else is so mad about it

Microsoft and Amazon are able to move forward because they fulfilled the minimum requirements needed for the project. The spokesperson also confirmed that this means the other companies that were bidding in the contract will not be moving forward in the process — namely, Oracle and IBM.

Smith says that the contract is expected to be awarded by mid-July at the earliest.

This process was delayed following a conflict of interest lawsuit filed by Oracle against Amazon over the JEDI deal. An investigation concluded that there was "no adverse impact on the integrity of the acquisition process," but a separate investigation has been opened into potential ethical violations, Smith said.

Now that the first investigation has been completed, the Department of Defense will ask the court to lift the stay so the process can resume, Smith said.

"This portion of the investigation determined that there are no conflicts of interest that affected the integrity of the acquisition process," Smith said. "However, there may be potential ethical violations, which have been referred to [Department of Defense Inspector General] for further investigation."

Previously, IBM and Oracle filed official protests against JEDI’s winner-take-all approach in court. In October, Google dropped out of the bid for JEDI.

Read: There’s a new snag for Amazon in the winner-take-all $10 billion Pentagon cloud contract, and it could be good news for Microsoft

The Department of Defense plans to use multiple clouds for its overall cloud strategy, Smith said. The winner-take-all JEDI is just one element of its future cloud plans, and there will be further opportunity for other vendors to step in.

"DOD remains committed to adopting the best enterprise cloud solution that fits its unique and critical needs," Smith said. "The scope and complexity of DOD’s mission requires multiple clouds from multiple vendors. JEDI is one element of DOD’s overall multi-cloud strategy and part of larger efforts to modernize information technology across the DOD enterprise."

Business Insider has reached out to these companies for comment.

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