Amazon refuses to yield to Microsoft on Defense contract

The fight over the Pentagon’s $10 billion “war cloud” is now about much more than data.

Microsoft and the Pentagon say they are primed to move ahead with work on the massive Joint Enterprise Defense Infrastructure (JEDI) contract, a central pillar of the military’s 21st-century strategy and an initiative that analysts say is crucial to America’s long-term national security.

But Amazon Web Services — which unexpectedly lost out to Microsoft in a two-company race to secure the coveted 10-year deal — has shown no signs of backing down, and the Jeff Bezos-led firm is portraying itself as a righteous warrior standing up to a corrupt administration and a spiteful President Trump.

Amazon alleges that Mr. Trump, a vocal critic of the company, personally interfered and directed the Pentagon to award the contract to Microsoft. The White House and Pentagon vehemently deny those charges.

Military officials say the Pentagon’s data storage capabilities have fallen badly behind the times, preventing various arms of the military — and even various units on the battlefield — from drawing on the same secure pool of data when making decisions. Amazon won a similar cloud contract for U.S. intelligence services and was considered the leader in the field before Microsoft was accepted.

Late last week, the Defense Department completed a comprehensive reevaluation of the October 2019 award and again said it was clear that Microsoft is the best choice. The announcement prompted Amazon to vow that it will continue the fight, arguing that there are deeper principles at stake.

“The question we continue to ask ourselves is whether the president of the United States should be allowed to use the budget of the Department of Defense to pursue his own personal and political ends,” the company wrote in a blog post late Friday. “Throughout our protest, we’ve been clear that we won’t allow blatant political interference, or inferior technology, to become an acceptable standard.

“Although these are not easy decisions to make, and we do not take them lightly, we will not back down in the face of targeted political cronyism or illusory corrective actions, and we will continue pursuing a fair, objective, and impartial review,” Amazon wrote.

The company argues that it is simply a better, more affordable and more reliable option to perform the vast amount of cloud computing required by JEDI. Microsoft contends it is more than capable of handling the work in a safe, effective fashion.

But as the battle drags on, Amazon may run the risk of being seen by some as a stubborn corporate behemoth standing in the way of military progress. Pentagon officials and Microsoft stress that work on the JEDI contract is essentially ready to begin and is being held up only because of Amazon’s challenge in federal court.

“We appreciate that after careful review, the DoD confirmed that we offered the right technology and the best value,” a Microsoft spokesperson told the outlet Nextgov 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.”

Indeed, the Pentagon also took a subtle shot at Amazon in a statement last week, stressing that it wants to get JEDI up and running as soon as possible.

“The department has completed its comprehensive re-evaluation of the JEDI Cloud proposals and determined that Microsoft’s proposal continues to represent the best value to the government,” the Defense Department said. “The JEDI Cloud contract will make a full range of cloud computing services available to the DoD. While contract performance will not begin immediately due to the preliminary injunction order issued by the Court of Federal Claims on Feb. 13, 2020, DoD is eager to begin delivering this capability to our men and women in uniform.”

Hazy road ahead

It’s unclear when that court challenge will be resolved.

Amazon’s lengthy statement last week suggests the company is prepared to commit vast amounts of time and money toward the fight. Specifically, the company is trying to secure depositions from Mr. Trump and other top administration officials, along with all relevant emails and documents detailing any possible communication between the White House and Pentagon about JEDI.

Amazon also has cited the president’s public comments in making its case. Among other things, Mr. Trump has accused the company of avoiding federal taxes and profiting off of cheap delivery of goods by the U.S. Postal Service — charges Amazon strongly disputes.

Mr. Trump also routinely refers to the “Amazon Washington Post” in disputes with the newspaper, a nod to Mr. Bezos’ ownership.

Amazon also is clinging to an accusation by Guy Snodgrass, a top aide to former Defense Secretary James Mattis, who claimed in a recent book that Mr. Trump told Mr. Mattis to “screw Amazon” out of the award. Both the White House and Pentagon deny that claim.

A Pentagon inspector general’s investigation this year found that the Defense Department did nothing illegal in the JEDI award process.

The Pentagon also has stood firm against lawmakers and other critics who believe the administration should split JEDI into several smaller contracts rather than allow one company to oversee all of the military’s data needs. Defense analysts say that while that move could provide an exit ramp and allow both Amazon and Microsoft to have a role in JEDI, it would make the project more complicated and would introduce unnecessary problems into the equation.

“Industry has been trying to compel the [Defense Department] to open the competition to multi-vendor awards and to broaden the contract criteria to allow for different cloud solutions,” said retired Army Lt. Gen. Thomas Spoehr, now director of the Center for National Defense at the conservative Heritage Foundation. “The Pentagon, to their credit, has been steadfast in their pursuit of a single vendor to reduce complexity and has also not compromised in their desire for a secure, U.S.-based cloud environment.

“This is not the end, as the Court for Federal Claims must still rule on Amazon Web Services’ lawsuit,” he said. “But this decision brings the Pentagon another step closer towards securing a secure cloud based computing environment which is critical for the achievement of their goal for all-domain integration of warfighting efforts.”