The Trump administration has reportedly ordered newly-appointed Defense Secretary Mark T Esper to re-examine the bidding process for the military’s 10-year, $10billion cloud-computing contract amid concerns that it could go to Amazon.
The winning bid for the Defense Department’s Joint Enterprise Defense Infrastructure Cloud, or JEDI, was expected to be announced in the next few weeks but could be delayed due to 11th-hour intervention by the White House, sources close to the negotiations told The Washington Post this week.
Amazon and Microsoft are both finalists to receive the massive contract with the Pentagon, which would be one of the government’s most expensive information technology procurements ever.
On Sunday, DoD officials revealed they had not yet picked a winner and said Amazon and Microsoft were the only companies that fit the minimum requirements, but suggested the contract could be split between the two.
The president’s instruction to review the bidding process is unusual given that it typically follows a tight script.
Amazon and Microsoft declined to comment when approached by the Post.
The Trump administration has reportedly ordered newly-appointed Defense Secretary Mark T Esper (above with the president on July 25) to re-examine the bidding process for the military’s 10-year, $10billion cloud-computing contract amid concerns that it could go to Amazon
Trump has been an outspoken critic of Amazon and its founder, Jeff Bezos, in the past.
Billionaire Bezos also owns The Washington Post, and Trump has criticized the paper’s coverage of the administration.
Last week reports emerged that tech giant Oracle had lobbied President Donald Trump to scuttle Amazon’s chances of securing the contract with the aid of a flowchart outlining a ‘conspiracy’.
The chart, titled ‘A Conspiracy to Create a Ten Year DoD Cloud Monopoly’, shows a web of arrows with dollar signs and hearts connecting a number of former Pentagon officials, current Amazon employees and executives, and consultants working on behalf of Amazon, according to a copy shared by Axios reporter Jonathan Swan.
It was reportedly compiled by top Washington lobbyist Kenneth Glueck an executive vice president at Oracle.
Glueck told the Post that he planned to lobby Esper on the JEDI contract.
‘There’s new leadership at the DoD, which is an opportunity,’ Glueck said. ‘There’s very much a debate in the DoD over whether [awarding the $10 billion contract to just one company] is the best approach. It isn’t over until it’s over.’
Trump is a frequent critic of Amazon, the e-commerce retailer owned by Jeff Bezos (above)
Oracle was eliminated from the bidding competition for JEDI in April, a move the company has bitterly protested.
Oracle’s CEO, Safra Catz, served on Trump’s transition team, has dined at the White House and was once under consideration for a job in the administration.
Meanwhile, Amazon is believed to be one of the targets of a sweeping Justice Department probe into possible anti-competitive and monopolistic practices in big tech.
Earlier this month Trump said that the administration will ‘take a very long look’ the JEDI contract, citing ‘tremendous complaints’ he’s heard about the bidding process.
Trump said during an unrelated event at the White House that companies that are no longer in the running to land the deal have lodged complaints about the process.
Republican lawmakers troubled by the Pentagon’s handling of the contract also took their concerns directly to the president.
‘I’m getting tremendous complaints about the contract with the Pentagon and with Amazon,’ Trump said when he was asked about the matter during an Oval Office appearance with the Dutch prime minister. ‘They’re saying it wasn’t competitively bid.’
‘We’re looking at it very seriously,’ the president said. ‘It’s a very big contract, one of the biggest ever given having to do with the cloud and having to do with a lot of other things.’
Trump said some of the ‘greatest companies in the world’ were among those complaining about Amazon, and he said the administration will look ‘very closely’ at the contract because ‘I have had very few things where there’s been such complaining.’
Trump’s interference has injected uncertainty into a project the Defense Department has said is vital to maintaining the US military’s technological advantage over adversaries.
Whichever company wins the contract will have the monumental task of storing and processing vast amounts of classified data. The Pentagon says it will enable troops to advance the use of artificial intelligence in warfare.
Oracle and IBM were eliminated from an earlier round of competition, leaving Amazon and Microsoft as the two finalists.
A federal judge tossed out a second challenge by Oracle alleging that the bidding process was rigged in Amazon’s favor, and some in Congress have expressed concerns about potential conflicts of interest.
Republican Sen Marco Rubio of Florida sent a letter last week to White House national security adviser John Bolton asking that the Pentagon delay awarding the contract, contending that the process suffered from a ‘lack of competition’ and the use of ‘arbitrary criteria and standards for bidders’ that could waste taxpayer dollars and ‘fail to provide our warfighters with the best technology solutions.’
Rubio had also expressed concerns about plans to award the contract to a single vendor.
The Pentagon has said it plans to award the contract as soon as August 23.
Rep James Langevin, a Rhode Island Democrat who sits on the House Armed Services Committee, said last week he has full confidence in the Defense Department’s cloud strategy and that it’s important that the project be allowed to move forward.
Langevin said in an emailed statement that it would be ‘wholly inappropriate’ for Trump or any member of Congress to interfere in the procurement process, especially since the courts and the Government Accountability Office – the watchdog for Congress – have rejected challenges to the Pentagon’s plans.
Daniel Goure, vice president of the Lexington Institute, a defense-oriented think tank based in Virginia, said it’s not unusual for Trump to publicly raise concerns about a defense equipment contract, as Trump did weeks before he took office over the contract with Boeing for an updated version of Air Force One.
But Goure said it’s rare for Trump to actually reverse a Pentagon decision, especially one backed by a legal opinion.
‘I would be incredibly surprised if the president decided to unilaterally cancel this,’ said Goure, whose institute receives funding from Amazon. ‘I think once he sees the process, or the process is explained to him and the document is explained to him, I think this will all go away.’