REAN Cloud's $950M Pentagon Contract Crumbles After Oracle Lodges Opposition To Amazon Partner

A systems integrator's close alliance with Amazon Web Services resulted in a massive Department of Defense contract falling apart after Oracle argued the selection unfairly benefited its cloud rival.

REAN Cloud, a Premier AWS partner, had announced the five-year contract, capped at $950 million, on Feb. 7 for a large cloud migration that involved implementing a custom solution for automating the procurement of cloud resources for the military while maintaining price stability.

Last month, Oracle lodged an official protest through the Government Accountability Office. REAN's deal was subsequently reduced, a Pentagon spokesman said Monday, to cover only a project for the U.S. Transportation Command on which the born-in-the-cloud solution provider had already worked, with a maximum price set at $65 million.

[Related: AWS Superstars Join Forces: REAN Cloud Buys 47Lining To Gain Big Data, Machine Learning Expertise]

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Oracle argued the procurement process violated government procedures to ensure competitive bidding because the Defense Department selected an implementation partner before deciding on the cloud provider that would host those workloads.

A spokesperson for REAN said the company, and CEO Sekhar Pauli, aren't commenting on the Pentagon backtracking from the contract.

When REAN won the contract last month, the company said it would "provide a platform of options that lets agencies migrate legacy applications to a government-approved, commercial cloud environment of their choice."

Oracle didn't see it that way.

While REAN works with many technology vendors and is widely recognized for its DevOps expertise, AWS is the only hyperscale infrastructure provider it lists as a partner, and REAN is most commonly associated with the cloud leader.

REAN's original contract involved working with the Defense Innovation Unit Experimental (DIUx), which looks to implement commercial technologies beneficial to the U.S military. It involved a project to speed procurement times to help the Pentagon achieve what it has identified as an important priority for maintaining a military edge over rival superpowers—embracing the cloud.

The systems integrator based in Herndon, Va., was to implement an automated procurement system with Firm Fixed-Pricing, helping DoD agencies achieve efficiencies in running their IT infrastructure, developing applications and handling highly sensitive data. REAN would also offer consulting services to the agencies as they worked to meet complex and mission-critical infrastructure needs.

REAN had completed a prototype last year for the Transportation Command, called USTRANSCOM. That DoD infrastructure assessment and cloud migration project won the 2017 DoD CIO Cyber and IT Excellence Award.

REAN Cloud scaled its business rapidly in just a few short years to become a powerhouse AWS partner, making some big acquisitions along the way, including DevOps-focused Opex Software and big data specialist 47Lining.