REAN Cloud Says 'Old Guard' Protest Of DoD Cloud Contract Will Further Delay Defense IT Modernization

REAN Cloud, which lost the lion's share of a lucrative federal contract after its close ties to AWS provoked an official protest from Oracle, said Wednesday the U.S. Department of Defense had not explained its basis for slashing the contract for cloud services.

REAN managing partner Sekhar Puli, in a prepared statement, said the threat of legal action and protest "by the old guard" would further delay modernization of defense infrastructure, benefitting "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," he said.

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

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The Premier AWS partner based outside of Washington D.C. announced the five-year contract, capped at $950 million, on Feb. 7, for a full cloud migration involving a custom solution for automating the military's procurement of cloud resources.

Soon after, Oracle lodged its official protest through the Government Accountability Office.

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

On Monday, a Pentagon spokesman said REAN's deal had been reduced to cover only a pilot U.S. Transportation Command project, with a maximum price set at $65 million.

REAN's work on that pilot project began almost two years ago. Since then, the scope has twice been expanded, the company said.

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

But REAN is commonly associated with Amazon's ecosystem, and AWS is the only hyperscale infrastructure provider it lists as a partner.

That led Oracle, which declined comment, to argue the selection was a de facto deal with AWS at the expense of other cloud providers.

REAN's prototype for USTRANSCOM was awarded the 2017 DoD CIO Cyber and IT Excellence Award.

REAN's original contract called for working with the Defense Innovation Unit Experimental (DIUx), which looks to implement commercial technologies beneficial to the U.S military. The project was 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.

"Many DoD agencies wish to procure these services,’ Puli said Wednesday. He declined a live interview with CRN.