In a significant development, the US Department of Defense announced on Tuesday that Pentagon has cancelled $10 billion JEDI (Joint Enterprise Defense Infrastructure) contract that was given to Microsoft in 2019, leaving the favourite Amazon out of the race during the Donald Trump administration.

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Washington:

According to a report in CNBC, the Pentagon said that "due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs."

The JEDI contract was meant to modernise the Pentagon's IT operations for services rendered over 10 years. After Microsoft was awarded the decade-long contract in October 2019, Amazon Wed Services (AWS) which is the Cloud arm of Amazon, filed a bid protest directly to DoD, challenging the decision.

The Pentagon said in a statement it still needs enterprise-scale cloud capability and has announced a new multi-vendor contract known as the ‘Joint Warfighter Cloud Capability'.

The agency said "it plans to solicit proposals from both Amazon and Microsoft for the contract".

Amazon and Microsoft did not respond immediately to the Pentagon decision. The Microsoft shares went down after the decision was made public.

Microsoft had said that it won the JEDI contract because the US Department of Defense found that it offered "significantly superior" technology at a better price.

A year after Microsoft was awarded the $10 billion JEDI cloud computing contract, Amazon in December last year decided to pursue its legal battle challenging the decision, asking a US judge to set aside the award to Microsoft.

After Microsoft was awarded the decade-long contract, Amazon cloud computing business arm, Amazon Web Services (AWS), filed a bid protest directly to the Department of Defense (DoD), challenging the decision.

The company vowed to continue its protests after the Department of Defense reaffirmed in September that it did a re-evaluation of the contract proposals and found that Microsoft has won the contract.

AWS in a court filing attacked the re-evaluation process.

Amazon believed that the re-evaluation process was highly flawed, and subject to undue pressure from the US President Trump.

AWS said that the DoD's re-evaluation is "nothing more than an attempt to validate a flawed, biased, and politically corrupted decision."