Pentagon’s review of controversial $10B contract was a sham, Amazon claims


we’re not through —

Amazon says DOD actions were “political cronyism” and review was “illusory.”

Kate Cox

Sprawling concrete building surrounded by enormous parking lot.

Enlarge / The Pentagon in its natural habitat—Arlington, Virginia—in 2018.

Amazon is continuing to fight the Department of Defense over a $10 billion contract, as the Pentagon has completed its review of the deal and determined once again that it was correct to award the entire project to Microsoft.

The DOD launched bidding for the Joint Enterprise Defense Infrastructure (JEDI) project, a massive cloud-computing contract, in 2019. By April of that year, the shortlist was down to two finalists: Amazon AWS and Microsoft Azure. Amazon was widely considered the favorite, and many industry watchers expressed surprise when Microsoft ultimately landed the deal in October 2019.

Amazon filed suit, alleging that the decision was politically motivated and quoting President Donald Trump’s alleged intention to “screw Amazon.” In February of this year, a federal judge agreed to order an injunction on the deal pending the outcome of the case.

The DOD launched its own initial investigation of the contract process. That review, which concluded in April, determined that the DOD did nothing wrong in awarding the contract to Microsoft—even though the White House stonewalled investigators and refused to provide witnesses for the probe.

The agency this spring also launched a reconsideration of specific parts of the contract. That review concluded just before the Labor Day holiday weekend, with the Pentagon reaffirming that “Microsoft’s proposal continues to represent the best deal to the government.” Work on the contract, however, cannot begin while the injunction is in place.

Microsoft applauded the DOD’s decision. “We appreciate that after careful review, the DoD confirmed that we offered the right technology and the best value,” the company said in a statement. “We’re ready to get to work and make sure that those who serve our country have access to this much needed technology.”

Amazon, in a scathing corporate blog post, strongly rejected the agency’s findings.

“Taking corrective action should have provided the DOD an opportunity to address the numerous material evaluation errors outlined in our protest, ensure a fair and level playing field, and ultimately, expedite the conclusion of litigation,” Amazon wrote. “Unfortunately, the DOD rejected that opportunity.”

Amazon’s bid for JEDI came in “tens of millions of dollars” lower than Microsoft’s, the company alleges, and the “review” was effectively just for show. Why? Because of President Trump, Amazon says:

There is a recurring pattern to the way President Trump behaves when he’s called out for doing something egregious: first he denies doing it, then he looks for ways to push it off to the side, to distract attention from it and delay efforts to investigate it (so people get bored and forget about it). And then he ends up doubling down on the egregious act anyway. On JEDI, President Trump reportedly ordered former Secretary [of Defense James] Mattis to “screw” Amazon, blatantly interfered in an active procurement, directed his subordinate to conduct an unorthodox “review” prior to a contract award announcement and then stonewalled an investigation into his own political interference. “Corrective action” was used as a way to halt our litigation, delay further investigations and incorrectly give the appearance that only one issue needed to be fixed while giving the impression that the DoD was actually going to fix something… This corrective action changed nothing, wasted five months that could have been spent getting to the bottom of these serious concerns, and was designed solely to distract from our broader concerns and reaffirm a decision that was corrupted by the President’s self-interest.

Amazon intends to keep pursuing its legal action against the Department of Defense, the company added.

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