Amazon Strikes Back at Pentagon JEDI Deal With Microsoft

November 15, 2019

E-commerce giant Amazon has reportedly filed a sealed complaint against the Department of Defense after the company lost a bid to develop the Joint Enterprise Defense Infrastructure (JEDI) project to Microsoft. Amazon contends the government's decision process for the contract, worth up to $10 billion, had errors and "unmistakable bias."

The surprise rejection of Amazon Web Service's bid on October 25 raised eyebrows because the company had appeared to be the frontrunner thanks to its extensive experience with cloud computing.

Defense Secretary Mark Espers, who allegedly recused himself from the process three days before the contract was awarded due to his son's employment with another bidding company, denied that there was pressure to bias the process.

“I am confident that it was conducted freely and fairly without any type of outside influence,” said Espers about the allegations on Friday.

However, comments made by President Trump over the summer raised questions about whether the White House played any role in the decision to accept Microsoft’s bid, especially because Trump’s antagonism toward Amazon founder and CEO Jeff Bezos is well documented.

"We’re getting tremendous complaints from other companies," Trump told the White House press pool on July 18, when the competition had been whittled down to just Microsoft and Amazon. “Some of the greatest companies in the world are complaining about it.”

Concerns about the potential for presidential intervention in the bidding process had actually been raised more than a year before Trump hade those comments. Then-Press Secretary Sarah Sanders said in April of 2018 that the president would have had no such role in the JEDI decision.

"I think if it's found that the White House had any input whatsoever into which company wins the contract — below the level of telling Esper ‘You need to review this’ — it's going to raise significant questions about whether this procurement could move forward," Aaron Gregg, Defense Industry Reporter at The Washington Post, told Cheddar in October.

Adding to the Pentagon's woes, the Defense Department faces a separate legal challenge from Oracle, one of the original bidders for the JEDI contract. In an ironic twist, Oracle is appealing a ruling against them after the company complained that the competitive process was biased in favor of Amazon, according to Fortune.