The Department of Defense has scaled back a $950 million contract awarded to REAN Cloud LLC in February to $65 million after the deal underwent extensive scrutiny including Oracle’s filing of a protest to the contract later that month. The Pentagon cited a narrowing of the project’s scope for the reduction in funding.
When the DoD announced the original $950 million contract with REAN Cloud, an Amazon Web Service Premier Partner, it was met with objects from industry members that felt the contract favored AWS over other options.
Oracle’s protest called the contract “an egregious abuse” of the procurement process. It would paint Rean Cloud as a front for AWS, creating a conflict of interest.
Last December, several IT industry groups including IBM and Oracle raised concerns that contracts for the Pentagon’s cloud migration would be awarded to a single cloud provider.
Other reports indicate that industry officials lamented the lack of communication surrounding the awarded contract. A press release from Rean served as the first official announcement of the deal.
In contrast, the scaling back of spending on the contract was announced prior to the Pentagon informing REAN executives, according to Rean’s co-founder Sekhar Pulo: “The irony of this is to date I have not received anything in writing from anybody, either saying it has been protested or that they are changing the contract,” he said. “The only thing we are seeing is what’s in the press.”
The initial contract was created after Rean had created a similar prototype for the U.S. Transportation Command. The project assisted in the migration of dozens of legacy applications within the department’s network to the cloud.
However, after reviewing the contract, Defense Department spokesperson Army Col. Robert Manning said to reporters, “After reviewing the production agreement recently awarded to Rean Cloud LLC, the Department has determined that the agreement should be more narrowly tailored to the original scope of the prototype agreement, which was limited to United States Transportation Command applications.”
The Pentagon is in the midst of an accelerated migration to the cloud after White House officials ordered federal departments to explore methods for doing so.