UPDATED 20:44 EDT / OCTOBER 22 2019

CLOUD

Defense Secretary Mark Esper pulls out of JEDI cloud computing contract review

U.S. Secretary of Defense Mark Esper has removed himself from the review process of the Pentagon’s highly lucrative Joint Enterprise Defense Infrastructure cloud computing contract after it was revealed that one of his adult sons is working at onetime bidder IBM Corp.

“Out of an abundance of caution to avoid any concerns regarding his impartiality, Secretary Esper has delegated decision making concerning the JEDI cloud program to Deputy Secretary [David] Norquist,” said Chief Pentagon Spokesperson Jonathan Rath Hoffman in a statement today. “The JEDI procurement will continue to move to selection through the normal acquisition process run by career acquisition professionals.”

Although not named, the son in question is widely assumed to be Luke Esper, who has been employed by IBM since February. IBM was one of several companies that initially bid on the JEDI contract, only to see its proposal rejected.

“Secretary Esper’s son has been a digital strategy consultant with IBM Services since February,” IBM said in a statement to media. “His role is unrelated to IBM’s pursuit of JEDI.”

Under the JEDI contract, the Pentagon will spend up to $10 billion over 10 years on cloud infrastructure and services. The pool of bidders has since been narrowed down to a choice of just Amazon Web Services Inc. and Microsoft Corp., and whichever wins will be tasked with building a cloud and related services to analyze and process swaths of classified and sensitive military data.

Hoffman added in his statement that Defense Secretary Esper was not legally required to recuse himself from the JEDI review process, but has done so to avoid any potential conflicts of interest. It’s seen as a wise move, since the procurement process has been mired in controversy with claims that some of those involved in the decision-making favor Amazon above the other bidders. The Pentagon has already prevailed in two court appeals by IBM and Oracle Corp., whose initial bids were rejected.

“The JEDI selection process has had enough twists and turns to produce a few seasons of a TV series,” Constellation Research Inc. analyst Holger Mueller told SiliconANGLE. “And just when you think it is over, it comes back. Secretary Esper is doing the right thing to recuse himself this time, the only question is, why not earlier? But still it’s better to do the right thing late than never at all.”

In July, U.S. President Donald Trump said he was “looking into” the JEDI contract after hearing of “tremendous complaints” from companies, including Microsoft, Oracle and IBM.

Esper had been in charge of evaluating Amazon’s and Microsoft’s bids since August when he was sworn in as defense secretary.

Photo: chiefngb/Flickr

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