Sen. Elizabeth Warren, D-Mass., is urging the Department of Defense (DoD) to prioritize competition and guard against market consolidation in its procurement of artificial intelligence (AI) and cloud computing technologies.
In a May 28 letter to Defense Secretary Pete Hegseth, Warren called on the Pentagon to ensure that its acquisition strategies “encourage competition and avoid consolidation that can lead to higher prices, concentration of risk, and the stifling of innovation.”
The senator’s query to DoD falls in line with the Protecting AI and Cloud Competition in Defense Act legislation that she reintroduced last month that aims to make sure contracting for AI and cloud computing tools prioritizes resiliency and competition.
Warren emphasized the significant influence of DoD’s purchasing power on the broader technology market. The U.S. Federal government is the largest buyer of goods and services globally, with the DoD accounting for over half of all Federal contract spending. According to Warren, this places the department in a unique position to shape the competitive landscape of critical technology sectors.
“With potentially tens of billions of dollars in Federal spending over the coming years, it could have repercussions far beyond just the agencies that use it,” Warren wrote.
DoD has already committed substantial funding toward AI and cloud computing. In December 2022 DoD awarded a $9 billion Joint Warfighting Cloud Capability (JWCC) contract to tech giants Google, Oracle, Microsoft, and Amazon to build a unified cloud infrastructure. The Defense Information Systems Agency is planning to roll out a follow-on vehicle – dubbed “JWCC Next” – to provide access to other cloud providers as well.
In addition, the DoD requested $1.8 billion for AI programs in its fiscal year 2025 budget proposal.
Warren cautioned that while these investments are vital to national security, they must be executed in a way that avoids entrenched vendor dominance.
“Contracting without protections against vendor lock-in can drive up costs for Federal agencies and taxpayers, while entrenching dominant AI and cloud computing companies and discouraging competition and innovation,” she wrote. “The [DoD] benefits from competition in the [AI] and cloud computing sectors, rather than being hindered by costly and anticompetitive practices.”
To support her concerns, Warren pointed to recent guidance from the White House Office of Management and Budget (OMB), which advises Federal agencies to consider vendor sourcing, data portability, and long-term interoperability to avoid dependencies on single vendors.
While national security systems are exempt from OMB directives, Warren suggested that DoD could draw on the memo’s principles.
Warren requested a detailed explanation of how the Pentagon intends to align its procurement policies with the OMB’s goals. Specifically, she asked how DoD plans to address vendor lock-in, intellectual property rights, and the handling of government data in its acquisition process.
Among the questions posed in her letter:
- How does DoD plan to update its acquisition practices to mirror OMB’s guidance on avoiding vendor lock-in?
- What changes will be made concerning intellectual property rights and the use of government data?
- How will DoD ensure that vendors collect and retain agency data only when necessary for the contract’s purpose?
- What evaluation criteria will be used to assess whether vendor practices impact long-term competition?
Warren asked that Hegseth deliver answers to the following questions by June 11. The DoD has not yet publicly responded to Warren’s letter.