Aerospace & Defense

Amazon Protests Trump's Role in $10 Billion Federal Contract Award to Microsoft

The inevitable protest by Inc. (NASDAQ: AMZN) of the U.S. Department of Defense’s decision to award a $10 billion cloud services contract to Microsoft Corp. (NASDAQ: MSFT) is coming soon to the U.S. Court of Federal Claims. That’s the word from a spokesperson for Amazon’s AWS cloud services business in a statement issued Thursday.

The contract, awarded on October 25 to Microsoft, had already seen its share of protests. Oracle Corp. (NASDAQ: ORCL) and International Business Machines Corp. (NYSE: IBM) had already filed (and lost) protests related to the way the contract was written and how the Defense Department had put its thumb on the scale in favor of Amazon.

The $10-billion, 10-year deal, known as the Joint Enterprise Defense Infrastructure (JEDI) contract, is expected to modernize decades-old systems that have resisted efforts to make them communicate with one another.

That Amazon would win the award was widely expected right up until the company lost.

In a statement, AWS spokespersone Drew Herdener said:

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. 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.

The last two sentences summarize what Amazon’s full protest will rely on. It is no secret that President Trump has no love for The Washington Post or, by extension, its owner, Jeff Bezos, founder and CEO of Amazon. When asked in July about the failure of the protests from Oracle and IBM, Trump answered:

They’re saying it wasn’t competitively bid. I never had something where more people are complaining. I will be asking them to take a look at it very closely to see what’s going on because I have had very few things with so much complaining.

In a book published in late October, Guy M. Snodgrass, a retired Navy officer who had served as a speechwriter and communications director for then-Defense Secretary James Mattis, alleged that Trump wanted to “screw” Amazon by preventing the company from bidding on the JEDI contract.

While that did not happen, Trump in July directed newly confirmed Secretary of Defense Mike Esper to review the contract. Esper, whose son works for IBM (which with Oracle had already been excluded from competing further for the contract), recused himself from the award process a few weeks before the announcement that Microsoft had won.

The Federal Times reported Thursday that AWS CEO Andy Jassy told an all-hands meeting that the company would “push the government to shine a light on what really happened.” Jassy also said:

I think when you have a sitting president who’s willing to publicly show his disdain for a company and the leader of a company, it’s very difficult for government agencies including the DoD to make an objective decision without fear of reprisal.

Amazon’s filing of a notice to protest with the Court of Federal Claims is sealed and the company will submit a detailed formal protest in the weeks ahead.

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