Microsoft calls for acquisition reform amid JEDI battles

The year-long legal battle over JEDI, the Defense Department's $10 billion contract that was supposed to be its first major play for enterprise cloud, could be the impetus Congress needs to consider procurement reforms that help the military buy and field new technology faster.

"It is so important to move quickly," Brad Smith, president of Microsoft, told the Senate Armed Services Committee Feb. 23 during a hearing on emerging technology's impact on national security, "how do you move quickly when the protest process moves slowly."

But JEDI is languishing in court, and the Defense Department recently signaled it would consider alternatives in an "information paper" to Congress if a near-term resolution seemed unlikley.

"We have literally been frozen by a federal court on our performance under the JEDI contract for more than 12 months. We have never stopped working on it, not for one day," Smith said.

"We may never get paid, that's the risk we're running. The customer may never be able to use what we create but we have the confidence that what we are building will be of benefit to the United States some way, somehow."

Smith's comments were in response to a question from Sen. Thom Tillis (R-N.C.), about whether the committee should consider adding a provision to encourage government-backed risk taking for private companies to the upcoming must-pass defense authorization bill.

"Anytime we can have more risk taking in the private sector that's a good thing. And not every company can afford to do it. Microsoft can do things that a small business cannot" like building a manufacturing plant for the Army's augmented reality goggles before winning the contract and, of course, working on JEDI.

Lawmakers and tech experts agreed that more risk-taking, including on the procurement side, will be needed if the Department of Defense wants to make significant technological gains over China and Russia.

Herbert Carlisle, president and CEO for the National Defense Industrial Association, concurred adding that there was no "disincentive to protest...except for the consumer, the customer that's actually going to use the equipment, that is denied that equipment for an extended period of time."

Eric Schmidt, formerly CEO and executive chairman of Google and current chair of the National Security Commission on Artificial Intelligence, suggested the committee consider exempting four defense programs from the traditional procurement process in areas like personnel, missiles and satellites so that "by law state that they will not be run by using the normal procurement mechanisms," but by a congressionally appointed committee.

Microsoft's Smith said implementing tighter deadlines and legal reforms to enforce those deadlines, along with more infrastructure investments in cloud computing, data, storage and encouraging acquisition professionals to use other transaction and mid-tier acquisition authorities, should be considered.

"We don't think that others should be denied an opportunity to protest. Maybe for better and worse, that is a part of the American way to some degree. But it sure would be beneficial if it could move faster," Smith said.