The Pentagon on Monday dramatically reduced the value of a nearly $1 billion contract it awarded last month to Virginia-based REAN Cloud — an Amazon Web Services partner — to provide cloud computing services to the Defense Department.
The Pentagon will reduce the size of the contract from $950 million to $65 million. The revision will limit its use to only U.S. Transportation Command rather than the entire Defense Department.
The decision, announced by Pentagon spokesman Col. Robert Manning in an off-camera press briefing, comes after intense scrutiny and pushback from tech companies — including a bid protest from Oracle — that are concerned over Amazon Web Services’ growing dominance in government and the Defense Department. Amazon Web Services, Amazon’s most profitable business, stood to gain more ground through REAN Cloud’s unique production contract before it was tweaked, as reported by Nextgov last week. REAN Cloud also can provide migration services to other cloud infrastructure providers, such as Microsoft’s Azure.
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