DOD CIO JOHN SHERMAN: Good afternoon, everyone. John Sherman, DOD CIO here. It's good to have you on the call today. I want to provide you, as Russ indicated, with an update on the Joint Warfighting Cloud Capability or JWCC procurement we have underway.
Now, just by a little bit of background here, I last spoke with you all on this matter back on 6 July of last year when I was the acting CIO when we both announced the cancellation of the JEDI cloud procurement, and the launch of JWCC, the effort there.
And at the time, I told you we would be doing market research leading up to a direct solicitation effort and that did occur. And in early November, when I was actually in kind of my timeout after I had been nominated by the president for this position. The department did make direct solicitations to four of the U.S. hyperscale cloud service providers.
In no particular order here, they were Google, Oracle, Microsoft and Amazon Web Services. Those four. That was in early November. Now, since that time, engagement has been occurring. I want to tell you about -- and before I do, one other bit of background.
In terms of what it comprises, the JWCC, it is going to be a multi-cloud effort that will provide enterprise cloud capabilities for the Department of Defense at all three security classifications: unclassified, secret, and top secret. All the way from the continental United States here, out to the tactical edge.
Nothing in the department meets this requirement at the current time, what I just described to you. And it will be imperative for capabilities like Joint All-Domain Command and Control or JADC2 as well as the AI and Data Accelerator or ADA Initiative, and other key warfighting activities for the combatant commands and indeed all across the enterprise.
Also JWCC, just as a reminder, and I know a lot of you've been reporting on this. The idea, our plan is it'll be a three-year base with two one-year options. And then at the conclusion of this, we're going to be launching a full and open competition for a future multi-cloud acquisition.
So, that's what JWCC involves. So, back to the timeline here, we did in early November the direct solicitation of the four companies I've noted. And since that time, DISA's Hosting and Compute Center or HaCC organization used to be CCPO under CIO, but they're now under DISA, have been supporting Washington Headquarters Services or WHS, which is leading the procurement here with acquisition and sustainment oversight.
Have been engaging with the four companies looking at their proposals, having a lot of iterative dialogue, very robust, very good involvement from all involved here, but as we've gotten into this, we had noted earlier that we were hoping back in July when I announced this that we were aiming to make awards as soon as next month in April.
But as we've gotten into this and leaned into it with four vendors, we recognize that our schedule was maybe a little too ahead of what we thought and that now we're going to wrap up in the fall. And we're aiming to award in December. So, this is an update to our schedule. Everything is going very well. It's just a matter of the scale of this.
And as we lean into it and start doing all the back and forth with the vendors, having the questions answered, looking at the proposals, it's just going to take us a little bit longer than we thought. And for my CIO seat, I've told the team, we're going to make sure we do this right, take the time that they need. And so, we can stick the landing on this given the imperative of what JWCC is for the Department of Defense.
So, we want to give you an update on the schedule there, let you know how things are going. And I will not be able to discuss anything about any of the specific proposals from the vendors or any of the qualitative aspects other than say the engagement that our team is having with them has been robust and positive, and we're getting what we need, and we're working through the updated timeline I just articulated for you.
So with that, that is my opening statement. And I'll pause, and then I'll turn it to Russ for Q&A. So Russ, over to you.
MR. GOEMAERE: All right. Thank you, sir. First question goes to Lauren Williams with FCW.
Q: Hey, thanks for doing this. Actually, so, my initial question was to ask about the funding levels projected for 2023 and how they compare to bureau's overall cloud investment. So now, given your opening statement, I want to add, can you talk a little bit more about what challenges, this year you're coming up against that is causing this significant schedule shift?
MR. SHERMAN: It's just the amount of workload going between four proposals. And in terms, we've got a good team with all the right expertise on this, but doing the due diligence in an iterative back and forth, and doing some of this, some parallel, some serial, and I won't go into details of which vendor we're talking to at which time, but making sure we're conducting the due diligence with four vendors.
Frankly, Lauren, this is taking longer than we had projected when we announced this in July. So, there's no problem with anything, but it's just a matter of doing this really unprecedented enterprise cloud procurement here in the DOD. And as some would say, schedules are based off past activities, it's one of my favorite NASA quotes that they said. And so, because we don't have a past activity, I think we just underestimated the amount of time this was going to take. So, nothing wrong on it, but just needing to get through all the due diligence to get to the award phase here.
MR. GOEMAERE: Do you have a follow-up to that, Lauren?
Q: Yeah. I guess my follow-up is, since the strategy, I guess, with JWCC is just also novel somewhat, is this just kind of, are there different sort of like growing pains with taking this different route with this sizable acquisition? Is that also part of it?
MR. SHERMAN: The strategy is still solid. But as, in our timelines in terms of what's going to happen once the procurement occurs, we still stand by. But no, this is something that is unprecedented here in the department to have an enterprise multi-cloud activity. So, some of this, to your question, Lauren, I can tell you from the schedule what I just told you about December we're confident in.
And we're certainly confident in the overall strategy about what JWCC is going to bring to the fight and how we're going to leverage it. So, we are going to be on a, continuing to learn about this, but we feel solid about the overall way ahead with JWCC.
MR. GOEMAERE: Thank you, Lauren. The next question goes to Kate Conger with New York Times.
Q: Thank you. I wanted to ask about how you think the JWCC award will interoperate with the cloud products that the services have begun to contract and set up for themselves?
MR. SHERMAN: So, JWCC will be the first enterprise level capability we have, as I mentioned, across all three security fabrics that spans the entire enterprise. Now, what you're getting at, there are other cloud offerings right now in the military services such as Navy's Black Pearl, Air Force's Cloud One, Army's cARMY cloud activity.
We see JWCC as truly being the enterprise cloud capability that spans all the combatant commands in all of our mission areas. Now, the other clouds that I just named and others as well, Stratus at DISA and others are going to have their, fit for purpose needs, is the vernacular we use on that.
Now, as my colleague, Ms. Metz, and others have indicated in other interviews over time, we would expect workloads, software development, other activities to transition to JWCC. We're not going to be mandating this out of the gate. But as the JWCC utility is proven out, we would expect more and more of the service needs to transition to JWCC. And that's how we see the path forward going on this.
And I'll turn to my colleagues here. Danielle, would you like to add anything to that?
DEPUTY CIO DANIELLE METZ: You know, the other thing that is important to know is, the reason why the department is able to do a multi-cloud, multi-vendor approach is that both the department as well as the cloud services providers have evolved with their technology for data portability. And so, that's an option for us to be able to work through for current cloud load or workloads on current cloud contracts to be able to migrate and transition to the JWCC.
So, those are learning activities that we will have once we have the JWCC in place. But as Mr. Sherman said, this is an important step for the entire Department of Defense to have access to cloud infrastructure, cloud platform and cloud services that we do not have available today.
MR. GOEMAERE: Do you have a follow-up to that, Kate?
Q: Got it. Thank you. Yes, I wanted to ask about at the beginning of JWCC process, I believe what was said was that you anticipated some of this award going to AWS and some of it going to Microsoft. Do you see any changes to that plan now that you started talking to these vendors a little bit?
MR. SHERMAN: Well, so that's what we said early on that when we announced this in July of last year that our initial market research indicated AWS and Microsoft would have the necessary characteristics for our enterprise cloud needs. But subsequent market research that occurred between July and November revealed that Oracle and Google, also their cloud offerings, at that part of the research, which suggests that they will also be able to meet our needs now.
And then, the next step is, of course, proposals have come in, in late January, that our DISA HaCC team, I mentioned, is assessing and remembering that a direct solicitation and submission of proposal does not guarantee an award. So, that's important for us to note here.
But we did note early on, AWS and Microsoft in July. Subsequent market research reveals Google and Oracle as potentially having the bona fides that we need for enterprise capability. And now, all four companies' proposals are being reviewed by the DISA team in support of Washington Headquarter Service and that procurement process there.
MR. GOEMAERE: Thank you, sir.
Q: Thank you so much.
MR. GOEMAERE: Next question goes to Brandi.
Q: Thanks, Russ. And thank you all so much for doing this. Just a couple of questions for you all. When you first announced it, you mentioned that other vendors besides the four that you named could potentially compete. Do you plan to continue competition to allow the other vendors to get onboard down the line if they show promising capabilities? And how does that play into that three-year base option you mentioned?
MR. SHERMAN: No. There was one other U.S. hyperscale provider that was assessed during our market research part, a direct solicitation that we did not assess what have the capabilities to meet our needs, and that was IBM. So to your question, we've got the four proposals that we're assessing.
And again, the submission of proposals does not guarantee an award. But some subset of the four proposals we have now is where we're going to be heading on the award with this. So to your question, we do not see any on-ramping of additional vendors for this particular three-year plus two option year’s part of JWCC, but we would be looking as we do the full and open competition in several years potentially for other vendors to be able to compete at that time.
Q: Awesome. Can you please sort of speak to what cloud services through JWCC really means for the Pentagon in the context of this modern conflict landscape with a variety of existing and emerging threats?
MR. SHERMAN: Thank you. I’ll add a few things, I'm going to turn to my colleagues, both Ms. Metz and General Skinner. I'd like them to chime in on this as well. What it really means for us, when we talk about enterprise, that means spanning truly our entire ecosystem from here in the continental United States out to our combatant commands abroad, and really out to the tactical edge, where our women and men in uniform may be conducting operations.
Now, it is for warfighting, but it's also for other activities such as logistics, healthcare, other things that support the force, that out at the tactical edge, and all three security fabrics, unclassified, secret and top secret, to be able to fight in contested environments, to be able to get information to where it needs to be. That's what JWCC is going to bring.
Additionally, and my colleagues can chime in on this, as we look at what is going to be able to do, traditional compute workloads, software development, helping with artificial intelligence such as what our Chief Digital and AI office is pioneering here with the ADA Initiative to be able to provide the most modern, technologically capable cloud capabilities across the force, to be able to allow really joint collaboration among combatant commands throughout the department.
We talk a lot about joint warfighting. This is the key foundation to enable that joint type of war fight that we talked so much about here at DOD. Let me turn to Ms. Metz for her thoughts. Danielle?
MS. METZ: Another thing I would add is, what sets JWCC apart from the other current cloud service offerings that we have, is that this is going to be a direct partnership with a cloud service provider. So, it's going to enable us to be able to have commercial parity and to hold to account the cloud service providers from a cybersecurity perspective.
So, we'll be able to glean a lot and work closely with the cloud service providers, which will set the stage for our future acquisition activities when we do a full and open competition for Cloud Marketplace for the department.
MR. SHERMAN: Thank you, Danielle. General Skinner, anything to add? Okay.
DISA DIRECTOR LIEUTENANT GENERAL ROBERT J. SKINNER: Nothing to add. You covered it well Sir.
MR. SHERMAN: Thank you. Okay.
MR. GOEMAERE: Okay. Next question goes to Mike Stone with Reuters.
Q: Thanks for doing this. Can we talk about the initial award amount that's contemplated and if the multi-cloud structure would be, if there's a limit to the number of participants in that, and so therefore trying to break down, if you can, how much each, how much money is at stake per year for each one, each potential awardee?
MS. METZ: Sure. This is Danielle Metz. What we're projecting overall for the cloud contract ceiling is $9 billion. And that's what the three-year base plus two one-year option years. So, that's in effect we went through the full five years that would be the projection of $9 billion. The way that we're structuring this IDIQ is that it's going to be potentially up to four separate contracts.
And then, at the task order level is where the competition will take place. So, each of the cloud service providers that have received an award under JWCC will be able to compete each time our mission owner comes with requirements. And then, we execute a task order. So, that is really the overall structure of how we're going to go about doing the JWCC once awarded.
MR. SHERMAN: An IDIQ, indefinite duration indefinite quantity contract.
MS. METZ: Delivery.
MR. GOEMAERE: Delivery, excuse me.
MS. METZ: The acronym.
MR. GOEMAERE: So, okay. Mike, do you have a follow-up?
Q: So, the first JEDI plan was a billion a year, 10 year with all the options, and then 10 year duration, right? It's, going on memory. So, this seems like it nearly doubled the amount. Can you explain that capability difference there? Or why that, if I'm understanding that order of magnitude correctly?
MR. SHERMAN: We're talking about multi-clouds instead of one. That's the first thing. The second issue, I'll just say from my seat here, haveing been to this rodeo before on the intelligence community side. What we don't want to do is underestimate a ceiling. This was not a guess. This was based on actual workflows and anticipated workloads to the cloud. But that's why we came up with this $9 billion dollar ceiling.
And that's not a guaranteed amount by any stretch. It is just that a ceiling. But based on what we think with up to potentially four cloud service providers over a five-year period, and based on what we've seen and other use cases, talking to our IC partners and elsewhere, we believe that is a reasonable number for what we could expect if all four of the CSPs who submitted proposals are indeed awarded in December.
MR. GOEMAERE: Thank you for the question, Mike. Next question goes to Amanda.
Q: Hi. Thank you so much. If this is awarded in December, what's the timeline for it to be deployed?
MR. SHERMAN: Yeah. I'm going to turn to Danielle because she's got the numbers memorized on this. Danielle, please go ahead.
MS. METZ: Sure. So once we have a contract award, the expectation is that for unclassified. So, that's our commercial IL2 up through IL5, which would be at award. Sixty days after contract award would be IL6, which is our secret. And then, 180 days after contract award would be top secret and tactical edge.
GEN. SKINNER: No later than.
MS. METZ: No later than.
MR. SHERMAN: That was General Skinner saying, no later than.
Q: So, as it's awarded, then it's effective?
MS. METZ: Sure. I'll say it again. So when the JWCC is awarded, we expect to be able to have access to unclassified. That's IL2 through IL5. Sixty days after contract award is IL6, which is secret. And then 100 up to 180 days --
Mr. SHERMAN: No later than?
MS. METZ: No later than 180 days is top secret and tactical edge.
Q: Okay, thank you for that. And I just had --
MR. GOEMAERE: Do you have a follow-up, Amanda? Go ahead.
Q: Yes, sir. Just a clarifying one. When you were answering Mike's question, can you repeat the overall number again for total package, because we always associated 10 billion with JEDI? So, you know, for reporting purposes, what would be the closely aligned number, you know, to put in a headline?
MR. SHERMAN: Nine billion is the ceiling, underline ceiling. That does not mean how much is necessarily going to be spent. I know you all know this here, but I know these can also kind of become the headline on this. It is just based on up to four clouds, four cloud service providers, which is not guaranteed over a potentially five-year period.
And it may not be five years if we don't exercise the two options. Nine billion dollars is the overall ceiling, potentially for JWCC.
MR. GOEMAERE: Thank you, Amanda. Next question goes to Jared.
Q: Thanks, Russ. First of all, at the top, I just want to say we appreciate your willingness to be transparent on this. It's a very different experience than we had during the JEDI days, and it's very welcome. Is there, I'm trying to figure out how to phrase this in a way you can actually answer it.
Since November during all these engagements with the vendors, have you seen anything that would lead you to think it's likely that you'll make fewer than four awards?
MR. SHERMAN: Jared, unfortunately, sir, I can't really get into the qualitative aspects. All I can tell you is from the optic of, and I can turn to General Skinner here, the engagement has been what we need, has been robust and good commitment from the four vendors, but not getting into the qualitative assessments that we are currently, frankly, in the middle of right now, in terms of the iterative process we're in.
So unfortunately, I can't get to the essence I think of what you're getting out there, Jared.
Q: Yep, fair enough. It was worth a try. The follow up then would be, so on this current schedule, we're now looking at five years will have passed since the concept of enterprise cloud was first cooked up. What are you going to do with JWCC to make sure it hasn't outlived its relevance by that point, either on a conceptual basis or technological basis?
MR. SHERMAN: Good question. I would say that, first of all, working with these four CSPs -- And again, the proposals don't guarantee an award, have continued to modernize their technology as strong leaders in their industry here. And so, we're not buying yesterday's solutions for tomorrow. I mean, these are very modernized CSP offerings that we're assessing right now.
I would say going to JWCC itself last year was a step for the department going from a single-vendor single-cloud approach that had embodied JEDI to a potential multi-vendor multi-cloud approach that we're moving into. Very similar to our colleagues over in the intelligence community with the commercial cloud enterprise or C2E.
And in terms of what Ms. Metz brought up in one of the earlier questions about data portability and other things that we are aware of, are now able to leverage, that this is a modern solution, and is what is being driven by requirements, frankly, for our JADC2, for the ADA Initiative to have exactly what JWCC brings to the fight.
So, we are firmly confident that we are building a very modern or moving towards a modern solution for our modern warfighting needs against our pacing challenge and anybody or anything else that we need to confront as a department.
MR. GOEMAERE: Okay. Next question goes to Matt Beinart.
Q: Hi. Thank you. I just had three quick timeline questions just to clarify. So one, I believe you said the proposals from the four vendors were due in January. When in January was that submission deadline? And then two, at what point did you officially kind of come to the conclusion that awards in or making the awards in April wouldn't be feasible?
And then three, the plan to start the full and open competition down the road, I believe previously you said that could start around 2025, does this move to make these awards in December maybe push that second step out to 2026 we're starting that? Thank you.
MR. SHERMAN: So, let me work backwards. And Russ was scribbling on your questions here. So if I miss one, we'll re-attack here. Let's start with your last one first. The starting the full and open competition will be one year. We'll start that after the research and everything, the framing of that procurement will start one year after award.
So, on the timeline, we just articulated that would begin in December of 23. And that would be potentially an award then two years hence, give or take. So that pushes us into December 2025 or more likely to your point, early 2026. So, there's a bit of a shift here, but not a hugely significant one.
Now, I'm going to ask Russ for some help here. The other questions here.
MR. GOEMAERE: Go ahead and re-state those if you could there.
MR. SHERMAN: Oh, I remember one. Excuse me. The one about -- So, I'm going to go back to your first one. When we did get the proposals in for late January. January 26, I believe was the exact date we got the four proposals in. And then, fill in the blank on other questions if you could for me.
MR. GOEMAERE: Middle question, Matt. What was it?
Q: Yes, sure thing. When did you officially reach that conclusion that you decided making these awards in April would not be feasible?
MR. SHERMAN: It's been within the last, we don't have an exact date. But recently, the last couple few weeks here, because we've been working with the team. And that was why we wanted to reach out to you all now before we got into April. And also, frankly, to not do this a second time now that we're able to snap the chalk line on this.
And based on the corpus of knowledge we have of the engagement, we've been pretty decisively engaged. The team is deep into this now. So, it's been pretty recent that we had a suspicion once we started the lift on this that this is going to be quite a bit.
But it was pretty recently that we realized, and we had the team go back and based on the cadence we're on, the amount of iterative Q&A and everything going on with the vendors that we will start to put a ball on this in the fall timeframe, and aiming to be able to announce awards in December. So, that was the timeline there.
MR. GOEMAERE: I'm going to turn it over to Mr. Sherman if he has any closing comments.
MR. SHERMAN: First, my colleagues, anything you'd like to add?
MS. METZ: No. Thank you for your time. Really appreciate it.
MR. SHERMAN: Thank you. I just want to say thank you for your time and appreciate the questions and your understanding of why some of the details because of the procurement process we couldn't get into, but wanted to always be transparent on this. And I just also want to publicly thank the team that's doing all the hard work on this.
With the DISA team, we have our program manager, Mr. Ryan McArthur, there that recently left us at CIO and went to go work for General Skinner, really good individual there working for the HaCC under Ms. Sharon Woods. And again, in close partnership with Washington Headquarters Services, whom we're supporting.
And then, acquisition sustainment team with whom we work closely on this. And I think that's all we had to say, and appreciate the time with you today.
