Amazon Challenges $10B Cloud Contract Award To Microsoft

Amazon Challenges $10B Cloud Contract Award To Microsoft December 24, 2019
COFC bid protest Cloud Contract

On November 14, 2019, Amazon announced it planned to protest the Pentagon’s surprise decision last month to award the Joint Enterprise Defense Infrastructure (JEDI) cloud-computing contract to Microsoft. On November 22, 2019, Amazon filed suit in the U.S. Court of Federal Claims (COFC), but declined to comment beyond the announcement of the official filing.

Award of JEDI Project

On October 25, 2019, the U.S. Department of Defense (DoD) announced Microsoft won its JEDI cloud contract, worth up to $10 billion over a period of 10-years. With this, Microsoft will provide infrastructure and platform services for both the Pentagon’s business and mission operations. The JEDI contract seeks to unify United States military agencies’ disparate computing systems and lay a framework for advanced artificial-intelligence tools.

Microsoft beat out Amazon in the final round for this lucrative contract after the two cloud giants beat out other competitors like IBM and Oracle in an earlier competition round. Most experts considered Amazon to be the front runner to win the deal.

“The National Defense Strategy dictates that we must improve the speed and effectiveness with which we develop and deploy modernized technical capabilities to our women and men in uniform,” DoD Chief Information Officer Dana Deasy said in a related statement. “The DoD Digital Modernization Strategy was created to support this imperative. This award is an important step in execution of the Digital Modernization Strategy.”

Government Contracts Influenced by Politics?

In a statement, an Amazon spokesperson, Drew Herdener, suggested that political motivations were at the center of the JEDI project being awarded to Amazon. “It’s critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence," said Herdener.  “Numerous aspects of the JEDI evaluation process contained clear deficiencies, errors and unmistakable bias — and it’s important that these matters be examined and rectified,” he continued.

At the Amazon Web Services (AWS) re: Invent in Las Vegas conference on December 4, 2019, Andy Jassy, the CEO of AWS said that there was “significant political interference” in the JEDI process and that Trump’s disdain for the company makes it hard for government agencies to “make an objective decision without fear of reprisal.”

Amazon CEO Not Popular With Trump Administration

Amazon and its founder Jeff Bezos are a frequent target of the Trump Administration. Bezos personally owns The Washington Post, and President Trump has called the newspaper “fake news” after it published unfavorable stories about him.

Amazon had been considered the front-runner for the contract, partly because it had built cloud services for the Central Intelligence Agency, and also because it’s the country’s biggest cloud computing provider. But Trump previously stated that other “great companies” should have a chance at the contract. On July 18, 2019, well before the Pentagon announced its decision, Trump also told reporters that the administration would “take a very long look” at JEDI. The president cited “tremendous complaints” he said he had heard about the award and how the terms of the bid seemed to favor Amazon.

Court Proceedings Begin

Amazon is calling for a court order directing the DoD to either re-evaluate the proposal or re-open discussion and make a new determination, the judge further said. At a November 26, 2019, COFC hearing, Judge Patricia Campbell-Smith repeated for the record Amazon’s arguement that the Pentagon didn’t award the cloud deal to Microsoft on the basis of a fair evaluation of the companies’ bids.

Amazon “contends that the procurement process was compromised and negatively affected by the bias [against Amazon] expressed publicly by the president and commander in chief, Donald Trump,” Campbell-Smith said in a recording of a status hearing released on December 5, 2019 by COFC in Washington.

Defense Secretary Mark Esper defended the Pentagon’s handling of the bidding process, saying it was done fairly and without outside influence. Microsoft is also intervening in the case to defend its contract win.

The complaint was filed under seal and when Amazon “released” its complaint to the public, on Dec. 9, 2019, it was nearly entirely redacted. Additionally, the proceeding judge issued an information protective order on the case. On Tuesday, December 10, 2019,  Department of Justice and DoD attorneys filed an unusual objection with the COFC, saying a “large quantity” of Amazon’s redactions from its publicly released complaint were unjustified and ran afoul of court rules that demand a presumption of public access to judicial records. They also accused Amazon of trying to create an “information imbalance” in what the public knows about the case, and that the information that the company held back from the public version went far beyond what’s required by the protective order Judge Campbell-Smith issued.

“The public version of the complaint redacts material that does not qualify for protection under the court’s protective order, under the law, or under the rules of this court,” they wrote. “As such, the United States respectfully requests that the court reject AWS’ overbroad redactions and direct that AWS refile a redacted version of its complaint redacting only material properly warranting protection.”

 

Tags: COFC Bid Protest

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