‘Improper pressure’: Amazon says Trump played big role in it missing out on $14.6b Pentagon contract

Amazon said in a legal complaint unsealed Monday that it had lost a multibillion-dollar cloud computing contract with the Pentagon because President Donald Trump used “improper pressure” to divert it from the company to harm its chief executive, Jeff Bezos.

The Defense Department reviewed outdated submissions from the company and overlooked key technical capabilities, Amazon claimed, saying those errors tipped the scales in favour of Microsoft, which won the contract in October.

Donald Trump with Microsoft CEO Satya Nadella and Amazon boss Jeff Bezos.
Donald Trump with Microsoft CEO Satya Nadella and Amazon boss Jeff Bezos.Credit:AP

Amazon had been considered the front-runner for the Joint Enterprise Defense Infrastructure project, known as JEDI, in part because it had built cloud services for the CIA. Its Amazon Web Services, or AWS, business is also the country’s biggest cloud computing provider.

But Trump said publicly that other “great companies” should have a chance at the $US10 billion ($14.6 billion) contract. Trump said he would take “a very strong look” at the JEDI contract, noting that companies including Microsoft, IBM and Oracle had complained about the award process.


Trump has openly criticised Bezos, who owns The Washington Post. The president has accused the paper of spreading “fake news.”

In its complaint, filed in the US Court of Federal Claims in Washington, Amazon said that Trump attacked the company behind the scenes to hurt Bezos, “his perceived political enemy.”

It would be improper for a president to intervene in the awarding of a contract, according to experts on federal contracting.

The department “failed to acknowledge the numerous instances in which AWS’s demonstrated capabilities vastly exceeded performance requirements — while ignoring instances where Microsoft necessarily failed to demonstrate its solution met the technical requirements,” Amazon wrote.

“The blatant, inexplicable errors,” Amazon argued in the complaint, make it clear that “President Trump’s message had its intended and predictable effect.”

The Defense Department rejected the idea that Trump had meddled in the contracting process.

“This source selection decision was made by an expert team of career public servants and military officers from across the Department of Defense and in accordance with DOD’s normal source-selection process,” said Elissa Smith, a spokeswoman for the Defense Department. “There were no external influences on the source selection decision.”

A spokeswoman for Microsoft did not immediately return requests for comment.

Amazon did not detail new instances of Trump’s direct involvement. Instead, the company relied on his public statements and tweets, as well as those of his son, Donald Trump Jr., and private comments reported on in the press. Amazon argued that Trump’s disdain for Amazon and Bezos was plain for everyone to see, including people directly involved in the procurement.

Amazon cited Trump’s removal of former Secretary of Defense Jim Mattis as an example of direct interference in the JEDI decision. Trump directed Mattis’ replacement, Mark Esper, to review the process by which the bids for JEDI were being reviewed. Esper had said that he would conduct an independent review.

A speechwriter for Mattis, the former defense secretary, says in a book published several weeks ago that Trump had wanted to give the contract to a company other than Amazon.

Amazon’s complaint says that the Pentagon began preparing to award the contract to Microsoft on October 17. But on October 22, Esper said he was recusing himself from the process because his son worked for IBM, which had bid on the contract and been rejected.

The Defense Department announced a few days later that the JEDI contract would go to Microsoft.

Under pressure from Trump, the Pentagon “departed from the rules of procurement and complied — consciously or subconsciously — with its Commander in Chief’s expressed desire to reject AWS’s superior bid,” Amazon argued in its complaint.

The company also said that the Defense Department required Amazon to build new classified data centers to handle its material, rather than letting the company use its already-existing data centers that have been approved for classified use. This change, which Amazon said came at “the eleventh hour” drove up the cost of its bid for the contract.

The JEDI contract, which could extend for as long as a decade, is significant for the military, which frequently operates on outdated computer systems. The Defense Department has spent billions of dollars on modernisation efforts.

Microsoft’s victory in the contracting process has the potential to reshape the cloud computing industry, in which Amazon is the dominant player.

Bezos spoke at the Reagan National Defense Forum on Saturday and reaffirmed Amazon’s commitment to working with the military, in light of employee protests against Pentagon contracts.

“My view is, if big tech is going to turn their backs on the Department of Defense, this country is in trouble. That just can’t happen,” Bezos said.

The New York Times

Most Viewed in Business

Source: Thanks smh.com