Amazon alleges that the Pentagon's decision to give the $10 billion JEDI cloud contract to Microsoft is 'the product of an increasingly corrupt environment under the Trump administration'

By Ashley Stewart

Amazon Web Services latest complaint in its lawsuit over the Pentagon's decision to award a cloud computing contract worth as much as $10 billion to Microsoft became public Tuesday.

In the filing, AWS alleges that political interference played a role in the decision, and that the Pentagon's recent decision to stand by awarding the contract to Microsoft is "the product of an increasingly corrupt environment under the Trump administration."

The Department of Defense last year chose Microsoft for its Joint Enterprise Defense Infrastructure (JEDI) deal, a colossal cloud project around storing and managing sensitive military and defense data.

Amazon challenged the decision in court, alleging political interference from President Donald Trump, a frequent critic of the online retailer and its CEO, Jeff Bezos. Bezos is the owner of the Washington Post newspaper, which has published reporting critical of the president.

In the course of the dispute, a federal judge found Amazon could likely prove the Department of Defense made at least one error, related to a storage requirement, in evaluating an aspect of Microsoft's proposal — and that the mistake affected the outcome.

The Department of Defense requested to remand the case in April to reconsider that aspect of the award but by September upheld its decision to award the contract to Microsoft. The Pentagon said in a public statement at the time that it completed a "comprehensive re-evaluation of the JEDI cloud proposals" and ultimately "determined that Microsoft's proposal continues to represent the best value to the government."

In response, Amazon said that it would continue fighting the decision, and that it "remains deeply concerned that the JEDI contract award creates a dangerous precedent that threatens the integrity of the federal procurement system." 

AWS says that after the reevaluation was resolved, its own bid was actually lower than that of Microsoft by a factor of tens of millions of dollars.

"The fact that correcting just one error can move the needle that substantially demonstrates why it's important that the DoD fix all of the evaluation errors that remain unaddressed, and ensure they are getting access to the best technology at the best price," an Amazon spokesperson said in a statement on Tuesday. 

Amazon in the complaint alleges the reevaluation "is riddled with errors even more egregious than those that plagued the initial award," and "faced with the untenable combination of Microsoft's technical inferiority and now-higher price, DoD manipulated its evaluations to a degree that belies any facade of rationality."

In a statement, Microsoft corporate VP of communications Frank Shaw said that Amazon Web Services took the opportunity of the reassessment to "[amend] aspects of their bid to achieve a lower price," and that the Pentagon simply "decided that given the superior technical advantages and overall value, we continued to offer the best solution."

Shaw also said "it is time we moved on and got this technology in the hands of those who urgently need it: the women and men who protect our nation." You can read the full statement below.

Representatives for the Trump administration were not immediately available for comment.

The Pentagon inspector general said in April that an investigation turned up no evidence of political interference in the the Defense Department's decision to award Microsoft the contract. However, at the same time, the inspector general said that the team couldn't fully investigate Amazon's allegation about Trump's role in the process because the White House barred key witnesses from cooperating.

"I can't think of another procurement ever where the nonstop litany of inappropriate ethical behavior and conflicts of interest produced such a steady drumbeat," George Washington University professor and procurement law expert Steven Schooner told Business Insider earlier this year of the process.

Read Microsoft's full statement:

"Amazon seems to be saying the only way they can ever lose is if the procurement isn't fair. But every month, the market tells them that's not true. Large and sophisticated customers regularly choose Microsoft over AWS. They do this because of the strength of our technology, our understanding of complex projects, and our overall value.
 
"As the losing bidder, Amazon was informed of our pricing and they realized they'd originally bid too high. They then amended aspects of their bid to achieve a lower price. However, when looking at all the criteria together, the career procurement officials at the DoD decided that given the superior technical advantages and overall value, we continued to offer the best solution. We also know what it takes to serve the DoD having worked with them for more than forty years.
 
"The DOD's independent IG report found there was no evidence of actual procurement interference so it is time we moved on and got this technology in the hands of those who urgently need it: the women and men who protect our nation."

Are you an Amazon Web Services employee? Contact this reporter via email at astewart@businessinsider.com, message her on Twitter @ashannstew, or send her a secure message through Signal at +1-425-344-8242.

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