Pentagon reconsiders $10B cloud contract as Trump sounds alarm over alleged Amazon favoritism

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The Pentagon. (Flickr Photo / David B. Gleason. Licensed under CC BY-SA 2.0)

The Department of Defense announced Thursday it is reviewing a $10 billion, 10-year contract to build the military’s war cloud. Amazon and Microsoft are the last contenders in the contest, which has been plagued by lawsuits and accusations of favoritism. The Pentagon was expected to announce a winner this summer but now its future is less certain.

The Defense Department’s new secretary, Mark Esper, will look into the project, called the Joint Enterprise Defense Infrastructure (JEDI). It is a massive overhaul of DoD’s technology infrastructure that will allow different branches of the military to share sensitive information in the cloud and incorporate artificial intelligence technology.

“Secretary Esper is committed to ensuring our warfighters have the best capabilities, including Artificial Intelligence, to remain the most lethal force in the world, while safeguarding taxpayer dollars,” said DoD spokesperson Elissa Smith. “Keeping his promise to Members of Congress and the American public, Secretary Esper is looking at the Joint Enterprise Defense Infrastructure (JEDI) program. No decision will be made on the program until he has completed his examination.”

Oracle has been the loudest critic of the process since losing out on the deal in 2018 when the Pentagon announced it would award JEDI to a single vendor. Oracle sued over that decision, arguing that the contest had been tailor-made for Amazon and claiming conflicts of interest gave the Seattle tech giant a leg up.

A federal judge shot down Oracle’s protest so company executives took their grievances to President Donald Trump, according to The Washington Post, which first reported on DoD’s review of the contract. Earlier this month, Trump told reporters that he would instruct DoD to review JEDI because “companies like Microsoft, Oracle, and IBM,” had raised concerns.

“I’m getting tremendous complaints about the contract with the Pentagon and with Amazon … they’re saying it wasn’t competitively bid,” Trump said.

Though it is unusual for a president to get involved in a federal agency’s procurement process, Trump’s involvement is not out of character. He is a frequent critic of Amazon and its CEO Jeff Bezos. The president has pressed the U.S. Postal Service to raise the rates it charges Amazon.

Amazon has long been seen as a frontrunner for JEDI; the company’s cloud arm, Amazon Web Services, has the highest level of security certification from the federal government. But the Defense Department’s review of the procurement process could throw a wrench in things.

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