The Insider

Jilted cloud company expresses 'disappointment' over reduced DOD contract 

March 7, 2018 at 1:30 PM

REAN Cloud says it is disappointed with the Pentagon's decision to dramatically reduce the scope of its nearly $1 billion contract for cloud migration services, blaming “the old guard” of defense contractors for holding back the U.S. military from harnessing innovative technologies.

On Monday, the Pentagon said it was reducing the potential ceiling of a production agreement with REAN Cloud from $950 million to just $65 million, limiting the services under the award to U.S. Transportation Command rather than the entire Defense Department.

In a statement provided to Inside Defense today, REAN Cloud managing partner Sekhar Puli expressed the company's “disappointment” with the reduced scope and said many agencies are still interested in buying the services. 

“REAN Cloud has not been made aware of the basis for the DOD’s recently stated intention to reduce the contract ceiling to $65 million,” Puli said in the statement. “However, it is clear that many DOD agencies wish to procure these services. Based on the threat of legal action and protest by the old guard, the only winners in this delay are those large companies that stand to lose money if the DOD proceeds with innovation. In the meantime, the cost of maintaining antiquated government infrastructure has not subsided.”

Oracle America protested the REAN Cloud award on Feb. 20.

In early February, DOD awarded the $950 million production agreement as a follow-on to a successful prototype project initiated last year by the Defense Innovation Unit Experimental and TRANSCOM. The prototype award was made competitively through an other transaction agreement, meaning DOD could award the follow-on production contract without further competition. While the prototype work was specific to TRANSCOM, the Pentagon said the production agreement made REAN's cloud migration services available to all DOD agencies.

The agreement generated controversy, however, because REAN Cloud is an Amazon Web Services premier partner, and the Pentagon's cloud executive steering group is in the midst of orchestrating a department-wide cloud services competition.

REAN Cloud says its offerings “can automate all stages of the cloud adoption lifecycle such as pre-migration assessment, migration, testing, compliance documentation, operations and more,” and it points to awards the DIUx project won by saving costs and accelerating implementation of cloud environments.

“We are honored to be performing work for the U.S. military,” Puli said. “We look forward to continuing productive discussions with entities across the DOD who still plan to migrate their IT infrastructure.”

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