UPDATED 13:16 EDT / DECEMBER 09 2019

POLICY

In court filing, Amazon charges pressure from Trump, ‘egregious errors’ led to loss of Pentagon’s $10B JEDI contract

In a court filing newly unsealed today, Amazon.com Inc. provided more details on its charge that “improper pressure” from President Donald Trump was behind the Defense Department’s decision to pass it over for the lucrative JEDI cloud computing contract and choose rival Microsoft Corp. instead.

Moreover, Amazon’s cloud company Amazon Web Services Inc. detailed a litany of “egregious errors” on the part of the DOD, including last-minute changes to the JEDI request for proposal that overlooked unique AWS capabilities and also had the effect of raising AWS’ presumed price closer to Microsoft’s.

As a result, the company is calling for a do-over of the JEDI procurement process. “The award must be terminated, and DoD must reevaluate the proposals fairly and free of any direct or indirect improper influence.”

The Joint Enterprise Defense Infrastructure program will be worth as much as $10 billion over 10 years. Amazon’s court filing, which was made public today in a redacted form, was submitted last month as part of a lawsuit that the company is pursuing against the DOD in the U.S. Court of Federal Claims. The company charges that the department’s procurement process for JEDI was undermined by political bias because of interference from Trump, who has been quoted repeatedly criticizing Amazon Chief Executive Jeff Bezos — who also personally owns the Washington Post, which has run numerous articles critical of the president. 

Trump “launched repeated public and behind-the-scenes attacks to steer the JEDI Contract away from AWS to harm his perceived political enemy — Jeffrey P. Bezos,” Amazon contends in the complaint. “The stakes are high. The question is whether the President of the United States should be allowed to use the budget of DoD to pursue his own personal and political ends.”

Amazon cited multiple statements and tweets from Trump to back up its case, including a July speech during which Trump said that he was looking “very seriously” at intervening in the JEDI provider selection process. Another source the company drew on in the complaint is a recently published book by former Defense Secretary James Mattis’ head speechwriter. The book claims that Trump told Mattis while the DOD secretary was at the the helm of the department to “screw Amazon” out of the JEDI contract. 

“Irrespective of any artificial steps the Administration might have taken to sterilize the record, it was impossible to shield DoD from the bias exhibited and undue influence exerted by President Trump and others,” Amazon contends in the complaint. “That improper and unlawful intervention contributed directly to an arbitrary and capricious award that is contrary to procurement law and contrary to the interests of our national security.”

Amazon further charges that the DOD made last-minute changes to the contract specifications in the spring of 2019 that placed an “artificial limitation on technical solutions, without any justification.” The company alleges that the modifications drove up the price of its bid, but the exact dollar value was redacted from the complaint. Not redacted was Microsoft’s evaluated price: $678,517,417.38.

One example the company cited as changing AWS’ evaluated price is a late change that rejected Amazon’s plan to use existing data centers — even those that are certified for handling classified information — to fulfill contract requirements.

The lawsuit fleshes out what AWS has been saying for weeks.

“It’s very risky for the country,” AWS CEO Andy Jassy told SiliconANGLE in an interview just before last week’s annual AWS re:Invent conference in Las Vegas. “It’s risky for democracy. It’s risky for making the right decisions for the country. Our national defense is critical for this country but not just for this country. It’s critical for the world. So when you need very significant modernization where the ramifications are high, the decision must be made in a completely objective way that’s clear from political interference.”

Amazon was widely seen as the front-runner to nab JEDI while the DOD was still evaluating bids. The company faced off against not only Microsoft but also IBM Corp. and Oracle Corp., which both dropped out earlier in the competition. Oracle filed a lawsuit of its own against the government over the rejection of its bid, claiming that the DOD unfairly favored the competition, and is currently pursuing the case in the U.S. Court of Appeals for the Federal Circuit after losing an earlier appeal.

Microsoft, for its part, has intervened Amazon’s Federal Claims lawsuit to defend the DOD. Microsoft president Brad Smith said over the weekend the compamy was “working every day” before JEDI was awarded to improve its platform and has since only stepped up the pace. “In any technology race, if you think that you’re so far ahead that you can’t possibly lose, you’re probably going to lose,” he told CNBC. “That’s what we’ve learned time and time again.”

“There’s a second lesson that applied to ourselves — never conclude that you’re so far behind that you can’t catch up if you work harder than your competitor. So we put more and more engineers working pretty much 7 days a week for 13 months to constantly create a better product.”

The department has itself also pushed back claims of bias in the procurement process. Defense Secretary Mark Esper told reporters in Seoul last month that “I am confident it was conducted freely and fairly, without any type of outside influence.”

DOD spokeswoman Elissa Smith declined to comment on AWS’ claims but defended the decision to award JEDI to Microsoft. “This source selection decision was made by an expert team of career public servants and military officers from across the Department of Defense and in accordance with DOD’s normal source-selection process,” she said in a statement. “There were no external influences on the source selection decision. The department is confident in the JEDI award and remains focused on getting this critical capability into the hands of our warfighters as quickly and efficiently as possible.”

The JEDI contract calls for the creation of a unifying cloud network across the DoD that will host both classified and unclassified data. As part of the deal, the Pentagon is also ordering ruggedized edge computing devices that can be used “for the full range of military operations” and “modular, rapidly deployable data centers.”

Photo: gregwest98/Flickr

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