Bad news for Microsoft after US court grants Amazon request for halt on all work concerning the Pentagon’s JEDI cloud contract
Microsoft has been handed some bad news this week when a US court sided with Amazon, after it requested that all work cease on the US Department of Defense’s (DoD) JEDI cloud contract.
The US judge on Thursday granted Amazon’s request to temporarily halt the DoD and Microsoft from moving forward on the up-to-$10 billion cloud computing deal, Reuters reported.
In October last year, the Pentagon had officially awarded the JEDI contract to Microsoft, despite Amazon’s AWS cloud division being widely regarded as favourite to win the contract.
Essentially, the Pentagon aims to create a single cloud architecture across all the military branches and combatant commands. The idea is to allow a seamless workflow and information-sharing environment.
But Amazon was very unhappy at what it believed was political bias from US President Donald Trump, and in November 2019 it filed a complaint with the US Court of Federal Claims contesting that decision.
AWS CEO Andy Jassy had previously said in an interview that he believed the decision was not adjudicated fairly and called for the whole JEDI decision process to be reviewed.
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.
Amazon feels the Pentagon decision was politically motivated by President Trump’s dislike of Amazon CEO Jeff Bezos and the Washington Post, which Bezos owns.
And late last month Amazon filed a temporary restraining order with a US court to demand that Microsoft halt work on the US Department of Defense cloud contract.
And now Reuters confirmed that Judge Patricia Campbell-Smith has issued a preliminary injunction, but did not release her written opinion.
She also ordered Amazon to post $42 million in the event the injunction was issued wrongfully.
The Pentagon, which had planned to start work on the contract on Friday, reportedly said it was disappointed in the ruling.
Lieutenant Colonel Robert Carver, a Defense Department spokesman, was quoted by Reuters as saying that the Pentagon believed “the actions taken in this litigation have unnecessarily delayed implementing DoD’s modernization strategy and deprived our warfighters of a set of capabilities they urgently need.”
It added it remained “confident in our award of the JEDI Cloud contract to Microsoft.”
Defense Secretary Mark Esper previously denied there was bias and said the Pentagon made its choice fairly and freely without external influence.
“We have confidence in the Department of Defense, and we believe the facts will show they ran a detailed, thorough and fair process,” Microsoft reportedly said.
Amazon did not immediately respond to requests for comment, Reuters said. The White House declined comment.
Amazon is reportedly seeking to depose President Trump and Esper in its lawsuit over whether the president was trying “to screw Amazon” over the contract.
It is fair to say that the JEDI contract was blighted by a highly acrimonious bidding process.
In July President Donald Trump said that he was “looking very seriously” at the Pentagon cloud contract, and that it should be investigated.
The President said he would direct aides to investigate the pending military contract, saying he had heard multiple complaints about an allegedly unfair bidding process.
The project was then briefly placed on hold, until Defense Secretary Mark Esper could ‘review’ the program.
In the end, there were only two bidders for the contract, namely Amazon and Microsoft, with Azure being the eventually winner.
AWS had been considered the clear favourite to win the contract, as AWS already provided some cloud services to the DoD, and in 2013 won a $600m cloud contract with the CIA.
A book by the speech writer for former Defense Secretary Jim Mattis alleged that Trump had asked Mattis in the summer of 2018 to “screw Amazon” out of a chance to bid on the contract.
The Department of Defense for its part has said that the acquisition process “was conducted in accordance with applicable laws and regulations.”
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