WASHINGTON – The Pentagon’s surprise decision to turn to Microsoft for the backbone of its cloud computing infrastructure is likely to fuel an already raging dispute, as a last-minute White House intervention raises new questions about the fairness of the process, government contracting attorneys and analysts say.
Amazon, which had long been seen as a front-runner, has several options it can pursue if it wants to delay or overturn the award.
The fight over the lucrative $10 billion contract could also play out in Congress. Lawmakers will get their chance to press the Defense Department on the the issue Tuesday at the confirmation hearing of Dana Deasy, the agency’s chief information officer.
In its announcement, the Pentagon said all bidders had been treated “fairly and consistently,” pointing out that the procurement strategy has already survived two bid protests and a lawsuit.
Deasy said there is an urgent need to move forward with the contract.
“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,” Deasy said in a 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.”
The Joint Enterprise Defense Infrastructure contract, known as JEDI, is meant to simplify the Pentagon’s computing systems under a commercially operated cloud computing infrastructure, in which agencies can rent computing services from specialized providers. Military officials say they need access to such a system in order to modernize the military’s disparate computing systems and take advantage of next-generation artificial intelligence tools.
Amazon Web Services, which pioneered this approach in the business world, has long been seen as a front-runner for the JEDI contract. It already has several years of experience managing classified data for the Central Intelligence Agency under the terms of an earlier $600 million contract. And it is also the only company that holds the highest-level Defense Department IT certification.
Amazon founder Jeff Bezos owns The Washington Post.
Looming over the procurement is a direct intervention by President Donald Trump, who asked Secretary of Defense Mark Esper to review the contract based on concerns that it would go to Amazon, people familiar with the matter told The Post in late August. Trump has spoken out against Amazon and Bezos on multiple occasions. He has attacked the Washington Post for its coverage of him, conflating the newspaper with Amazon’s interests, accusing it of publishing “fake news” and operating as a “lobbyist newspaper” for the company.
Trump’s intervention prompted Esper to initiate his own review of the Defense Department’s winner-take-all approach in early September. That review culminated in an Oct. 22 announcement that Esper would recuse himself from any decisions on the JEDI contract because his son works for IBM, one of the initial bidders. Days later, it was announced that the contract would go to Microsoft.
Sen. Mark Warner, D-Va., has already criticized Trump for interfering in the bidding process, tweeting in August that the president’s use of his office to punish media critics “would be a complete abuse of power.”
Alan Chvotkin, executive vice president and counsel for the Professional Services Council, a trade group for government contractors, said he thought it would be in Amazon’s interest to request what is called an “enhanced debriefing” with Pentagon officials in charge of the procurement. Such an action could put an automatic stay on the procurement while more information is gathered.
“It may all be aboveboard, but there’s going to need to be an inquiry into how they handled the procurement,” Chvotkin said. “What were the briefings that Esper was provided during his review? Why did he recuse himself? It raises a lot of questions.”
Amazon has not commented on how it will proceed.
If Amazon wants to stay in the running for the JEDI contract, it will need to protest the award to Microsoft. There are a few steps the company would need to take to do that.
First, Amazon can ask for a debriefing from the Defense Department to understand the agency’s rationale for awarding the contract to Microsoft. Amazon declined to say whether it would ask for such a debriefing.
Then Amazon has two avenues to legally challenge the award. It could formally protest the award with the Government Accountability Office. A year ago, the GAO chimed in on the JEDI contracting process, ruling against a bid protest filed by Amazon rival Oracle, which challenged the Defense Department decision to go to a single company for the lucrative contract. The second option is that Amazon could file a lawsuit over the contract award.