DoD's F-35 JPO awards $16.4B for cloud services to Amazon Web Services

Contract Overview

Contract Amount: $16,411,954 ($16.4M)

Contractor: Amazon WEB Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-03-22

End Date: 2026-03-21

Contract Duration: 729 days

Daily Burn Rate: $22.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: F-35 LIGHTNING II JOINT PROGRAM OFFICE (JPO)

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $16.4 million to AMAZON WEB SERVICES, INC. for work described as: F-35 LIGHTNING II JOINT PROGRAM OFFICE (JPO) Key points: 1. Significant award for cloud computing infrastructure, data processing, and web hosting. 2. Amazon Web Services is a major player in the cloud market, facing competition from Microsoft Azure and Google Cloud. 3. Potential risks include vendor lock-in, data security, and cost overruns if not managed effectively. 4. This spending falls within the Defense sector, specifically IT infrastructure for a major weapons program.

Value Assessment

Rating: questionable

The contract value of $16.4 billion over two years is substantial. Benchmarking cloud service pricing is complex due to service variations, but this appears high for the duration, suggesting potential for cost efficiencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may restrict price discovery and potentially lead to higher costs compared to a truly open competition.

Taxpayer Impact: Taxpayers are impacted by the significant expenditure on cloud services for the F-35 program, with potential for overpayment due to limited competition.

Public Impact

Ensures critical IT infrastructure for the F-35 program, supporting national security operations. Impacts the defense industrial base by awarding a large contract to a major cloud provider. Raises questions about the long-term cost-effectiveness and strategic sourcing of cloud services for major defense platforms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition raises cost concerns.
Potential for vendor lock-in with a single provider.
Data security and privacy risks in cloud environments.
Long-term sustainment costs for cloud services.

Positive Signals

Provides essential cloud services for a critical defense program.
Leverages a leading cloud provider's capabilities.
Contract duration allows for stable service provision.

Sector Analysis

This contract falls under IT infrastructure services within the Defense sector. Spending benchmarks for large-scale cloud procurements vary widely based on specific services and usage, but $16.4 billion over two years for a single program is a significant investment.

Small Business Impact

The contract was awarded to Amazon Web Services, Inc., a large business. There is no indication of small business participation in this specific award, which is common for large-scale cloud infrastructure contracts.

Oversight & Accountability

The Department of Defense, through the Defense Information Systems Agency, awarded this delivery order. Oversight will be crucial to ensure performance, security, and cost control throughout the contract period.

Related Government Programs

Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Department of Defense Contracting
Defense Information Systems Agency Programs

Risk Flags

High contract value over a short period.
Limited competition may lead to inflated costs.
Dependency on a single cloud provider.
Potential cybersecurity vulnerabilities.
Complexity of managing large-scale cloud services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.4 million to AMAZON WEB SERVICES, INC.. F-35 LIGHTNING II JOINT PROGRAM OFFICE (JPO)

Who is the contractor on this award?

The obligated recipient is AMAZON WEB SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $16.4 million.

What is the period of performance?

Start: 2024-03-22. End: 2026-03-21.

What is the total cost of ownership for cloud services over the F-35 program's lifecycle, and how does this award compare to projected needs?

The total cost of ownership for cloud services over the F-35 program's lifecycle is a complex calculation involving initial migration, ongoing service fees, potential data egress charges, and future upgrades. This $16.4 billion award represents a significant portion of that projected need for the initial two years. A comprehensive lifecycle cost analysis is necessary to determine if this award aligns with long-term budget expectations and offers value compared to alternative solutions or phased procurements.

What specific measures are in place to mitigate vendor lock-in and ensure data security and portability with Amazon Web Services?

Mitigation strategies for vendor lock-in and data security typically involve contractual clauses mandating data portability standards, multi-cloud architecture considerations where feasible, and regular security audits. The contract likely specifies data encryption methods, access controls, and incident response protocols. However, the inherent nature of specialized cloud services can still create dependencies, requiring continuous monitoring and strategic planning to maintain flexibility and protect sensitive defense data.

How does the pricing structure of this contract compare to industry benchmarks for similar large-scale government cloud service agreements?

Benchmarking this contract's pricing is challenging due to the unique scope and scale of services for the F-35 JPO. While Amazon Web Services is a competitive provider, the 'limited competition' aspect raises concerns about achieving optimal government pricing. A detailed analysis comparing per-unit costs for comparable services (compute, storage, networking) against other government cloud contracts (e.g., AWS GovCloud, Azure Government) and commercial equivalents would be needed to assess value for money.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 410 TERRY AVE N, SEATTLE, WA, 98109

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $63,311,494

Exercised Options: $18,269,778

Current Obligation: $16,411,954

Actual Outlays: $1,819,512

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC105023D0005

IDV Type: IDC

Timeline