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Microsoft’s $10bn JEDI cloud contract “sets dangerous precedent”, says AWS

 Oscar Williams 23 hours ago

US President Donald Trump (L) and Microsoft CEO Satya Nadella (C) listen to Amazon CEO Jeff Bezos (R) during an American Technology Council roundtable at the White House in Washington, DC, on June 19, 2017.

Amazon Web Services (AWS) has launched an extraordinary attack on the US government after defence officials announced they would not row back on their decision to award a controversial $10bn cloud contract to Microsoft.

The Department of Defense (DoD) confirmed on Friday that, following a “comprehensive re-evaluation of the JEDI [Joint Enterprise Defense Infrastructure] Cloud proposals”, it had “determined that Microsoft’s proposal continues to represent the best value to government”.

In a blogpost published shortly after the announcement, Amazon called the single-supplier framework award “politically corrupted” and claimed it lost out on the deal due to interference by Donald Trump and “numerous material evaluation errors”.

The company also vowed to press ahead with its legal challenge against the deal. A judge said in March that Amazon’s appeal was likely to succeed on a technicality.

When Microsoft secured the deal last October, analysts predicted it could help the company play catch up in the cloud computing race, which to date been dominated by AWS.

But in remarks that emphasise AWS’s hostility to Trump, who has threatened to take antitrust action against its parent company, the cloud computing giant said “there is a recurring pattern to the way President Trump behaves when he’s called out for doing something egregious”.

“First he denies doing it, then he looks for ways to push it off to the side, to distract attention from it and delay efforts to investigate it (so people get bored and forget about it). And then he ends up doubling down on the egregious act anyway.”

AWS said that the award “sets a dangerous precedent” and  that it was concerned about a “growing trend where defense officials act based on a desire to please the President, rather than do what’s right”.

It added: “This was illustrated by the refusal to cooperate with the DoD Inspector General, which sought to investigate allegations that the President interfered in the JEDI procurement in order to steer the award away from AWS. Instead of cooperating, the White House exerted a ‘presidential communications privilege’ that resulted in senior DoD officials not answering questions about JEDI communications between the White House and DoD.”

According to the speechwriter Guy Snodgrass’s book, Holding The Line: Inside Trump’s Pentagon with Secretary Mattis, Trump urged the ex-defence secretary James Mattis to “screw Amazon” out of an opportunity to compete for the contract. Mattis, the book states, told his team after the call that the deal would be “done by the book, both legally and ethically”.

The DoD inspector general’s report cast doubt on claims that Trump’s personal hostility to Amazon had influenced the outcome. In a statement, the DoD inspector general said in April: “The evidence we received showed that the DoD personnel who evaluated the contract proposals and awarded Microsoft the JEDI Cloud contract were not pressured regarding their decision on the award of the contract by any DoD leaders more senior to them, who may have communicated with the White House.”

However, the report noted that Pentagon officials were blocked from answering certain questions regarding their discussions with White House officials about the contract.

The report also highlighted that a defense department official who had previously worked for AWS and was negotiating a return to the company had helped to draft the procurement exercise. It said this did not affect the result, however.

In the blogpost, AWS claimed that “this time”, it offered a lower cost than Microsoft “by several tens of millions of dollars”. “The DoD’s decision to intentionally ignore the clear cost benefits offered by AWS, reinforces the fact that this corrective action was never meant to be fair,” the company protested.

Meanwhile, the DoD said in its statement that “the JEDI Cloud contract is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract that will make a full range of cloud computing services available to the DoD.” It added: “While contract performance will not begin immediately due to the Preliminary Injunction Order issued by the Court of Federal Claims on February 13, 2020, DoD is eager to begin delivering this capability to our men and women in uniform.”

Trump and Amazon’s CEO Jeff Bezos are engaged in one of the world’s most high-profile feuds. The US president has referred to the Amazon founder as “Jeff Bozo” and described the Washington Post, which Bezos acquired in 2013, as Amazon’s “chief lobbyist”, an allegation its publisher has strenuously denied. Trump has also threatened to take antitrust action Amazon, which he holds responsible for financial pressures on the US Postal Service.Categories: Cloud

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