This undated photo provided by the National Security Agency (NSA) shows its headquarters in Fort Meade, Maryland. (Photo by NSA via Getty Images)


This report was updated 10/29/21 at 3:32 PM ET to add a statement from an NSA spokesperson as well as expert analysis.

WASHINGTON: The Government Accountability Office said today that the National Security Agency needs to go back and rethink its selection of Amazon over Microsoft in a controversial multi-billion dollar contract, alleging the agency was at times “unreasonable.”

The decision from GAO sustains a protest from Microsoft against the NSA’s decision to award its WILDANDSTORMY single-award cloud contract to Amazon Web Services. The contract is reportedly worth $10 billion.

“GAO found certain aspects of the agency’s evaluation to be unreasonable and, in light thereof, recommended that NSA reevaluate the proposals consistent with the decision and make a new source selection determination,” the GAO statement said.

The WILDANDSTORMY contract would provide the NSA with classified and unclassified computing services. According to NextGov, the contract was awarded to AWS early in the summer, with Microsoft’s protesting the contract on July 21. The GAO’s full decision is classified and little is known about the details of the cloud contract itself.

The WILDANDSTORMY contract appears to be part of the intelligence community’s push to modernize its IT infrastructure. In November last year, the CIA awarded its Commercial Cloud Enterprise (C2E) contract, worth “tens of billions,” to five vendors.

Representatives for Microsoft and Amazon Web Services did not immediately respond to a request for comment. The GAO said it will release a public version of its decision after the NSA completes a review for classified information.

“NSA respects the oversight of the Government Accountability Office, and will work to ensure that these capabilities can be delivered to support the Agency’s mission in a manner consistent with the GAO findings,” an NSA spokesperson said. “The Hybrid Compute Initiative remains a priority for NSA, and we will continue to work through the source selection process to acquire this critical capability for the national security. The Agency has no further comment at this time.”

The NSA’s Hybrid Compute Initiative is part of its IT modernization effort. AWS has a continuing relationship with the IC, winning its first enterprise cloud contract back in 2013.

The GAO decision is not only another piece in the cloud saga between Microsoft and AWS, the top two cloud vendors for national security agencies, but another example of the government’s difficulties procuring high-dollar single-award cloud contracts. Both contractors also competed for the Defense Department’s single-award Joint Enterprise Defense Infrastructure contract, a long-delayed $10 billion cloud contract that the department awarded to Microsoft in October 2019. In July 2021, the department canceled the contract after a lawsuit filed by AWS further delayed the contract.

“The take away here is that clearly Microsoft and AWS are ready to go to the mat for these ‘must win’ cloud acquisitions that will lock in customers for possibly a decade,” said David Mihelcic, former CTO of the Defense Information Systems Agency. “C2E avoided these problems by going with a multi-award contract. In this case, that strategy does not appear to have been a viable option.”


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