Amazon Urges Rethink On JEDI Contract Award

Amazon claims Microsoft cloud contract award was down to political interference, but Microsoft alleges that Amazon retrospectively adjusted its bid pricing

Amazon continues to protest the decision by the US Department of Defence to award a cloud contract to Amazon.

According to Reuters, a court filing unsealed on Tuesday revealed that Amazon Web Services (AWS) unit has urged a US judge to toss out the Pentagon’s $10 billion JEDI cloud computing contract award to the bitter rival of AWS.

The Pentagon had in October 2019 officially awarded the JEDI contract to Microsoft, despite Amazon’s AWS cloud division being widely regarded as favourite to win the contract.

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JEDI background

Straight away Amazon protested, with AWS CEO Andy Jassy saying that he believed the decision was not adjudicated fairly and called for the whole Jedi decision process to be reviewed.

AWS in November 2019 filed a complaint with the US Court of Federal Claims contesting that decision.

Amazon has essentially argued that politics got in the way of a fair contracting process, and in December 2019 Amazon officially named President Trump in its court complaint, and accused him of exerting “improper pressure” and bias.

Then in January this year Amazon filed a temporary restraining order with a US court to demand that Microsoft halt work on the US Department of Defense cloud contract.

In February a US judge granted Amazon’s request to temporarily halt the DoD and Microsoft from moving forward on the up-to-$10 billion cloud computing deal.

That court order remains in place.

In April this year, the US Department of Defense Office of Inspector General was unable to rule out if President Trump’s White House had influenced the decision.

But in September 2020 the Pentagon concluded that Microsoft was the best value for money for the contract – a decision that AWS lambasted and promised at the time that it would “continue to protest this politically corrupted contract award.”

Court filing

But Reuters reported this week that AWS in a redacted 23 October court filing unsealed on Tuesday said that the award to Microsoft must “be invalidated because it is the product of systematic bias, bad faith, and undue influence exerted by President Trump to steer the award away from” the company.

It also called it a “flawed and politically corrupted decision.”

The White House declined to comment, referring questions to the Justice Department, Reuters reported.

AWS was quoted by Reuters as saying in a statement Tuesday that as a result of the Pentagon revision in September “the pricing differential swung substantially, with AWS now the lowest-priced bid by tens of millions of dollars.”

Microsoft response

Microsoft however told Silicon UK that Amazon had only lowered its pricing when it had realised it had bid too high.

“Amazon seems to be saying the only way they can ever lose is if the procurement isn’t fair,” said Frank X. Shaw, CVP at Microsoft Communications. “But every month, the market tells them that’s not true. Large and sophisticated customers regularly choose Microsoft over AWS. They do this because of the strength of our technology, our understanding of complex projects, and our overall value.”

“As the losing bidder, Amazon was informed of our pricing and they realised they’d originally bid too high, “Shaw told Silicon UK. “They then amended aspects of their bid to achieve a lower price. However, when looking at all the criteria together, the career procurement officials at the DoD decided that given the superior technical advantages and overall value, we continued to offer the best solution. We also know what it takes to serve the DoD having worked with them for more than forty years.”

“The DOD’s independent IG report found there was no evidence of actual procurement interference so it is time we moved on and got this technology in the hands of those who urgently need it: the women and men who protect our nation,” Shaw concluded.

The court is reportedly considering motions to dismiss Amazon’s amended complaint that have been filed by the government and Microsoft.

The motions have not been made public and it is not clear when the judge might rule.