Amazon’s bid for $10B Pentagon cloud deal faces friction as it battles with Microsoft

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Amazon CEO Jeff Bezos speaking at the Economic Club of Washington, D.C. in 2018. (Economic Club of Washington, D.C. Photo / Gary Cameron)

Amazon and Microsoft are locked in a battle for a massive contract to build cloud infrastructure for the Department of Defense. Amazon has long appeared to be the frontrunner in the competition but its bid is bogged down in conflict-of-interest allegations.

Background: The Pentagon’s procurement process has been slowed by a lawsuit filed by Oracle, an early contender for the cloud project, dubbed Joint Enterprise Defense Infrastructure (JEDI). Oracle sued after DoD announced its intention to award the contract to a single vendor, claiming the project was tailor-made for Amazon. The lawsuit points to an executive who left the Pentagon to go work for Amazon. A hearing in the case is scheduled for Wednesday.

Fuel to the fire: Over the weekend, The Wall Street Journal reported on emails that show a meeting between then-Defense Secretary Jim Mattis and Amazon CEO Jeff Bezos occurred in 2017. The emails also shed light on other meetings between Amazon and Pentagon representatives. Members of Congress, including Sen. Chuck Grassley, have called for the bidding process to be restarted. Other federal lawmakers are also scrutinizing the process.

Yes, but: Mattis had contacts with other tech executives with ties to companies in the running for JEDI.

What Amazon says: “These meetings had nothing to do with the JEDI procurement, and those implying otherwise either are misinformed or disappointed competitors trying to distract with innuendo vs competing fairly with their technical capabilities,” a spokesperson said in a statement. “The DoD deserves access to the best technology, and from day one, we’ve competed for JEDI on the breadth and depth of our services, and their corresponding security and operational performance.”

Why it matters: The JEDI prize will position one company at the center of the Pentagon’s defense and warfare technology infrastructure. It has become one of the most closely-watched and controversial procurement processes in recent history. The Pentagon says it plans to award the contract by the end of August.

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