The JEDI contract: We don’t see the force; do you?

Considerable ink has been sacrificed parsing both the wisdom and the potential winners and losers of the Joint Enterprise Defense Infrastructure (JEDI) contract award, which is estimated to be worth up to $10 billion over 10 years. TBR wrote two commentaries around the topic in June that handicapped the potential bidders and outlined the fundamental consumption model shifts triggered by continued technological innovations changing public sector procurement factors from affordability to governance compliance — or from “wallet to will.”

The impetus for revisiting the contract flows from the Pentagon again pushing back the timeline on submitting proposals by three weeks. That the Department of Defense once again pumped the brakes despite a desire to accelerate modern technology procurement, while simultaneously ending the Q&A portion of the solicitation period, highlights the tensions and challenges created by the shift from wallet to will.

At TBR, we continue to question the efficacy of a single-source contract for cloud infrastructure services. This concept of working with one cloud vendor for compute was leading edge in the commercial space about a decade ago as enterprises wrestled with how to automate the seamless movement of applications and data between on-premises and cloud compute instances. With this technological problem largely addressed in the hybrid cloud era, the new technological challenge facing leading enterprises is automating that seamless deployment across multiple cloud environments.

In this adoption of new, consumerized technologies, we see the disruptive forces aiming at the public sector IT market opportunity. The Pentagon seeks a single-source captive solution, betting on one firm’s ability to stay ahead of the market on innovation for a decade. Such a bet makes little sense to TBR or to the industry executives with whom TBR has discussed the JEDI contract structure. Furthermore, much has been written lately about the concept of asymmetric competition, which postulates that open platforms actually shorten the competitive advantage windows technological innovations provide to technology vendors. In short, being able to exploit leading edge technology requires that companies lessen their reliance on single-source vendors rather than doubling down on them.

It has been argued that military strategists plan how to fight battles without fully appreciating the changes in warfare they will face going forward. Awarding a single-source, 10-year contract for technology innovation sounds like a continuation of that misaligned planning process. In the private sector, such deals trigger business exits from improper planning. In the public sector, the exposure to lagging strategic planning manifests in threats to national security.

Leave a Comment

Your email address will not be published. Required fields are marked *