Breaking Down $10 Billion JEDI Cloud Contract Draft RFP

This analysis was first available to Bloomberg Government subscribers.

What does a winning proposal look like for the 10-year, single-award, $10 billion Joint Enterprise Defense Infrastructure (JEDI) commercial cloud contract?

That will probably depend on contractor responses to the technical attributes featured in JEDI’s draft RFP, such as evaluation, price, and other critical clauses.

The Defense Department’s draft request for proposal, released March 7, reveals a desire for a highly secure platform capable of providing continuous innovation for the Pentagon, where price is just one of many competing priorities. JEDI will provide enterprise-level commercial cloud services such as Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) to all defense agencies and military branches. The Pentagon will structure JEDI as a single-award indefinite delivery, indefinite quantity contract.

DOD officials are planning to issue a final RFP in early May and award a contract by the end of fiscal 2018. While the government hasn’t provided a value for JEDI, Bloomberg Government estimates a contract ceiling value of $10 billion.

The agency held an industry day on March 7 and issued a draft request for proposal later that day. Click here for Bloomberg Government’s March 12 publication of the top three takeaways.

Evaluating Proposals

The government will use a two-step process for evaluating contract awards, according to the draft RFP.

First is an assessment of the first factor to determine whether a bid is acceptable. The government will evaluate eight subfactors, including:

  • Whether the bid demonstrates that the company’s data centers are dispersed;
  • Whether the proposed IaaS and PaaS are publicly-available;
  • Whether solutions include a marketplace for both native and third party services; and
  • Five other factors as defined in section M3 of the draft RFP listed on page 94.

All subfactors of this first factor must be rated acceptable for a bidder to remain in the competitive range.

Second is an assessment of nine remaining factors including: identity and access controls; data security and hosting; price; and other areas defined in section M3 of the draft RFP that are listed on page 95. Factors two through nine will be evaluated using the government’s adjectival rating scale, which ranks proposals sections as outstanding, good; acceptable, marginal, or unacceptable.

Upon completion of steps one and two, companies remaining in the competitive range will be invited to submit a final proposal.

Pricing

The government isn’t planning significant scrutiny of contract-level pricing beyond determining whether it’s fair and reasonable because purchases on the proposed IDIQ contract will be made at the task-order level.

As part of its contract price evaluation, the government will calculate a total price based on summation of the proposed price for each price scenario in Attachment 4. A price analysis will be sufficient to determine reasonableness. The government doesn’t intend to perform cost analysis.

Price will be evaluated based on a comprehensive review, not adjectivally. This process will involve verification that figures are correctly calculated, prices are presented in the requested format, and that proposed rates and discounts are accurate.

Differentiating Factors

It has been widely rumored that the JEDI RFP’s onerous evaluation criteria may effectively limit competition to a handful of providers such as Amazon.com Inc. and Microsoft Corp. However, there are several differentiating factors that could make this competition interesting. From Bloomberg Government’s perspective, those factors will include the following.

  • Identity is the new perimeter:A December Joint Requirements Oversight Council (JROC) report on DOD cloud adoption emphasizes that reliance on traditional perimeter-based cyber defenses is no longer adequate to protect U.S. warfighters. JEDI proposals must demonstrate robust identity and access management capabilities, including role-based access controls. Offerors capable of delivering continuous access monitoring based on user analytics will have a competitive advantage.
  • Platforms at the center: As Defense Digital Service director Chris Lynch stated at the industry day, JEDI is not a data center contract. Competitive proposals will showcase innovative PaaS capabilities, such as the ability to support techniques like DevOps to continuously deliver new services for DOD end users.
  • Continuous innovation: The advantage of commercial cloud is that providers are able to continuously develop and roll-out new features that filter up from a diverse range of projects and customers. Vendors able to illustrate how they continuously test new ideas and solve problems their customers didn’t know they had will be better positioned than those who can only meet the bare minimum for each gate criteria.
  • Joint ventures: Given the size and scope of the JEDI contract it’s possible that joint ventures could emerge if contractors believe pooling resources offers them a better shot at competing with established commercial cloud providers. In that case, it will be crucial that at least one of the parties offers commercial cloud services with a broad customer base outside the government market.

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