Being Smart with Military Spending

In the United States, companies are rewarded for being nimble and making changes on the fly. Apple and Google host new apps every day. You can’t look away from Facebook and Twitter since they never stop updating.

The pace of transactions is changing as well. Instead of checks that take weeks to clear, people pay instantly with plastic. Ten year leases used to be routine in commercial real estate. But now WeWork and others are making short term rentals the new norm.

The military appropriations process hasn’t caught on. It’s still based on the mid-20^th Century approach of issuing long contracts to service providers. For example, Amazon is in line to be awarded a $10 billion contract to handle all of the military’s cloud computing.

Luckily, lawmakers are beginning to push back against this cozy deal. This month, the House and Senate committees responsible for military funding included strong language in a military spending bill. It warns the Pentagon it won’t get any money to spend on cloud computing until 90 days after it meets certain conditions. These include:

• A plan that delivers transparency “for funds requested and expended for all cloud computing services procured by the Department and funds requested and expended to migrate to a cloud computing environment.”
• “A detailed description of the Department’s strategy to implement enterprise-wide cloud computing, including the goals and acquisition strategies for all proposed enterprise-wide cloud computing service procurements.”
• The “strategy to sustain competition and innovation throughout the period of performance of each contract, including defining opportunities for multiple cloud service providers and insertion of new technologies.”
• “An assessment of potential threats and security vulnerabilities of the proposed cloud computing strategy, and plans to mitigate such risks.”

It will be interesting to see how the military responds.

After all, lawmakers made a similar request in March. “There are concerns about the proposed duration of a single contract, questions about the best value for the taxpayer, and how to ensure the highest security is maintained,” they wrote. The Pentagon’s response to that was to come back with the guidelines that clearly favored Amazon.com as a single provider.

Working with multiple cloud providers, the military wrote in July, “could prevent DoD from rapidly delivering new capabilities and improved effectiveness to the warfighter that enterprise-level cloud computing can enable.” The Pentagon also warned that having several providers could slow the process down.

Oh, and speaking of a slow process: The Pentagon isn’t using the cloud yet.

It needs to start. But it needs to do so the same way that many companies are: by spreading its data across multiple cloud providers. Doing so helps to provide redundancy, scalability, security and competition (among cloud providers, which drives down prices).

So why isn’t the Pentagon doing this? It could be cronyism. Amazon is a massive lobbying presence in Washington, D.C. and may be trying to buy a long-term contract.

Bloomberg reports that Amazon has increased spending on lobbying by 400 percent over the last five years and “lobbied more government agencies than any other tech company, pressed its case on as many issues as Google, and outspent everyone in the industry except for the search giant.” In terms of lobbying, “They quietly went from Chihuahua to Great Dane in just a few years,” Bruce Mehlman, who worked in the George W. Bush administration, explains.

Amazon founder Jeff Bezos leaves few stones unturned. He is reportedly close to Defense Secretary James Mattis. He’s also bought the local paper and a massive home in the District, where he intends to throw parties for the Washington elite. He even kicked in $10 million for the “With Honor PAC,” which will aim to elect military veterans to public office.

That’s all legal. But the rest of us should be asking whether it will buy the best possible cloud environment for our military. The DoD could get more for less if it encourages competition and uses an open process.

It seems as if many lawmakers are getting serious about making sure that’s what happens. Good for them, and good for our military.