Amazon just made its first official challenge to Microsoft’s $10 billion JEDI cloud-contract win over claims of ‘unmistakable bias’ (AMZN, MSFT)
Category : entrepreneur
- Amazon made its first formal action against Microsoft’s victory in the battle for a $10 billion Pentagon cloud contract.
- The Pentagon selected Microsoft on October 25 for the contract to move the Department of Defense’s sensitive data to the cloud.
- The decision was an upset for front-runner Amazon Web Services and generally regarded by experts as “a huge feather in the cap for Microsoft” and a “black eye for Amazon and Bezos.”
- The bidding process for the contract was contentious and included involvement from tech titans such as Oracle and reported interference by President Donald Trump.
- For more of Business Insider’s coverage of the JEDI deal, click here.
Amazon has filed a protest in the US Court of Federal Claims in the Seattle-based company’s first formal action against Microsoft’s victory in the fierce battle for the $10 billion cloud contract with the Pentagon.
Microsoft was selected on October 25 for the controversial deal, called the Joint Enterprise Defense Infrastructure (JEDI) contract, to move the Department of Defense’s sensitive data to the cloud. It’s worth as much as $10 billion over a 10-year span.
“AWS is uniquely experienced and qualified to provide the critical technology the U.S. military needs, and remains committed to supporting the DoD’s modernization efforts,” an AWS spokesperson said in a statement. “We also believe 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. 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.”
Microsoft did not immediately respond to a request for more information.
The decision came as a surprise, as Amazon Web Services was considered the likely choice for the contract for reasons such as the cloud provider’s market-dominant position and high security clearance. It was generally regarded by experts as “a huge feather in the cap for Microsoft” and a “black eye for Amazon and Bezos.”
The bidding process was contentious and included involvement from tech titans such as Oracle and reported interference by President Donald Trump, who has publicly feuded with Amazon CEO and Washington Post owner Jeff Bezos.
Trump wanted to “scuttle” the bidding process for JEDI for fear that Amazon Web Services might win, according to CNN, and a forthcoming book also alleges Trump last year ordered former Defense Secretary James Mattis to “screw Amazon” out of the deal.
Oracle formally challenged the JEDI bidding process, arguing it was “riddled with improprieties” that largely favored Amazon — including undisclosed employment and bonus offers to Department of Defense officials — and that the Pentagon set unfair criteria.
A federal-claims judge ultimately rejected Oracle’s protest and denied the company’s bid to be reconsidered for the contract, finding “individual conflicts of interest did not impact the procurement.” Which is to say, the judge in the case acknowledged that there were conflicts but found that they didn’t unfairly tilt the playing field.
IBM also bid on the contract. Google withdrew from contention before making a formal bid, citing possible conflicts of interest with its corporate ethics policy, as well as a possible inability to meet the terms of the deal.