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News Link • Military Industrial Complex

Pentagon's $1 Billion Cloud Deal May Signal New Era in Government Buying

• By Frank Konkel

In early February, a small Virginia-based company—REAN Cloud—that partners with Amazon Web Services announced a nearly $1 billion deal to provide cloud computing services for the Defense Department.

The contract caught many industry players by surprise, in part due to the $950 million value and partly because it was awarded without a traditional government procurement. This deal may be a harbinger for how the Defense Department plans to purchase certain technologies moving forward.

Using buying powers quietly imbued by Congress over the past three years, U.S. Transportation Command made the award to REAN Cloud under an other transaction production contract based on a prototype project last year to migrate military applications to Amazon Web Services' GovCloud region. The contract is a type of other transaction authority, commonly called an OT or OTA.

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