Amazon to challenge Pentagon’s ‘war cloud’ decision in federal court

Amazon is taking the battle over the Pentagon’s $10 billion cloud-computing contract to federal court. 

Amazon’s cloud-computing arm plans to challenge the Pentagon’s surprising decision to award the contract to Microsoft in the U.S. Court of Federal Claims, an Amazon Web Services (AWS) official told The Hill on Thursday. 

“Numerous aspects of the JEDI evaluation process contained clear deficiencies, errors and unmistakable bias – and it’s important that these matters be examined and rectified,” the official said in a statement, referring to the Joint Enterprise Defense Infrastructure (JEDI) contract.

Last week, Amazon filed paperwork declaring it will challenge the decision in the U.S. Court of Federal Claims, which hears monetary claims against the government. 

The development was first reported by The Federal Times, which obtained a video of AWS CEO Andy Jassy telling employees at an all-hands meeting that the company plans to “protest the decision and push the government to shine a light on what really happened.”

“AWS is uniquely experienced and qualified to provide the critical technology to the U.S. military needs, and remains committed to supporting the DoD’s [Defense Department’s] modernization effort,” the AWS official said. “We also believe it’s critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence.”

Amazon’s comments make it clear that the company’s complaints will revolve around whether the Pentagon’s decision to award the contract to Microsoft was swayed by President Trump, who publicly called on the Department of Defense to investigate the contract over the summer. Trump questioned if the process unfairly favored Amazon, which was widely seen as the front-runner.

A challenge from AWS alleging that the president improperly intervened in the contract process would be unprecedented, experts told The Hill last month.

“We’ve had other contracts that have had major issues which were fought out in the public but none of which I’m aware where the president is alleged to have somehow tried to influence the procurement process,” Dave Drabkin, a former top procurement executive at the General Services Administration, said at the time.

Amazon is the No. 1 player in the cloud-computing space with an approximately 48 percent market share. The military has given AWS, which provides cloud-computing for the CIA, its highest data management certification.

But the Pentagon surprised industry watchers when it awarded the lucrative cloud-computing contract to Microsoft last month. 

Microsoft did not immediately respond to The Hill’s request for comment about Amazon’s action on Thursday. 

Over the summer, Trump publicly questioned whether the JEDI contract was written with Amazon in mind, touting the argument that had been circulated for months by Amazon’s cloud-computing rival Oracle and a procession of Republican lawmakers. 

The president’s public remarks about JEDI, paired with his open antagonism toward Amazon CEO Jeff Bezos, has raised serious questions over whether Trump weighed in on Microsoft’s behalf in order to burn a rival.

A speechwriter for Defense Secretary James Mattis alleged in a new book that Trump wanted to “screw” Amazon by giving the contract to another company.

Several outlets have reported that Trump interfered in the process behind the scenes to scuttle Amazon’s chances of receiving the contract.

It’s technically legal for a president to be involved in a federal contracting process, but it goes against well-established norms and federal regulations that state government agencies cannot consider factors other than what is laid out in the original proposal when awarding a contract.

Shortly after Trump publicly raised concerns about JEDI, the newly appointed Pentagon chief Mark Esper ordered a review into the contract, delaying the award of JEDI for several months.

The JEDI contract will allow Microsoft to develop cloud-computing infrastructure for the U.S. military for up to 10 years, ending in October 2029, though it begins at only two. The deal could add at least $10 per share to Microsoft’s stock, and bolsters its position in the multi-billion dollar cloud-computing “wars.” Though Amazon is the industry leader, Microsoft is a close second.

Pentagon officials have touted the cloud-computing contract as an effort to modernize the department, which uses a set of outdated computer systems, and improve “lethality” on the battlefield. Having one powerful cloud infrastructure will allow the DOD to store enormous amounts of data as it steps up its use of artificial intelligence, drones and other technologies.

Updated at 6:07 p.m.