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UPDATE 1-Microsoft wins Pentagon's $10 bln cloud computing contract

Phil Stewart

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WASHINGTON, Oct 25 (Reuters) - Microsoft Corp. has won the Pentagon's $10 billion cloud computing contract, the Defense Department said on Friday, beating out favorite Amazon.com Inc.

The Joint Enterprise Defense Infrastructure Cloud (JEDI) contract is part of a broader modernization of the Pentagon's information technology systems meant to make the Defense Department more digitally agile.

But the contracting process had long been mired in conflict of interest allegations.

Oracle Corp had expressed concerns about the award process for the contract, including the role of a former Amazon employee who worked on the project at the Defense Department but then recused himself, then later left the Defense Department and returned to Amazon Web Services.

In a statement announcing Microsoft as the winner, the Pentagon noted that it had awarded more than $11 billion across 10 separate cloud contracts over the past two years.

"As we continue to execute the DOD Cloud Strategy, additional contracts are planned for both cloud services and complementary migration and integration solutions necessary to achieve effective cloud adoption," the Pentagon said. (Reporting by Phil Stewart; Editing by Cynthia Osterman and Sonya Hepinstall)