Inside money, markets, and big tech

Microsoft could lose its $10B US gov ‘war cloud’ contract to Amazon

The DoD is going to reconsider its decision

The US Defense Department will reconsider its awarding of a $10 billion cloud computing contract to Microsoft over Amazon, following claims president Trump had potentially interfered with the selection process, New York Times reports.

Dubbed the Joint Enterprise Defense Infrastruture (JEDI), the contract sees its awardee build and maintain the US government’s “war cloud,” handling the processing and storing large amounts of classified war-related data. It also includes an artificial intelligence system to assist with war planning.

[Read: Amazon confirms a Seattle-based employee has contracted coronavirus]

Amazon’s lawyers argue the White House had swayed Pentagon officials into awarding JEDI to Microsoft over Amazon, citing widely publicized beef between Amazon CEO Jeff Bezos and president Trump. Microsoft was originally awarded the contract in 2019 after a year-long courtship.

They even submitted evidence claiming Trump had told then-defense secretary John Mattis he wanted to “screw” Amazon out of the contract.

Last month, Hard Fork reported that a US federal judge had sided with Amazon by temporarily blocking the contract, suspending all related work until the case has been litigated.

Trump’s beef with Bezos worth $10 billion to Amazon

All this is not to say that this JEDI saga is nearly over. For one, this re-consideration won’t conclude whether Trump actually interfered with the deal. Instead, it will discover whether the Pentagon had incorrectly assessed the costs associated with granting the contract to Amazon, and how this influenced the decision.

It’s also a process that has dragged on considerably. As noted by New York Times, defense secretary Mark T. Esper had previously told reporters it was time to abandon the challenges and get on with building the cloud, claiming that American national security was at stake.

In response to the news of reconsideration, a Microsoft spokesperson reportedly maintained that the US got it right the first time. On the other hand, an Amazon rep noted the company was pleased that the Defense Department had recognised ‘substantial and legitimate’ issues with the process.

As for what’s next, the Defense Department is expected to soon be granted 120 days to reassess the decision, meaning it’s likely it’ll be at least four more months before anyone starts working on JEDI.

Published March 13, 2020 — 17:11 UTC