Grants AWS’ request for an injunction while its lawsuit challenges $10 billion contract proceeds
The Defense Department’s controversial JEDI cloud project has been put on hold while cloud giants Amazon and Microsoft continue to battle over the legitimacy of the government’s awarding of the $10 billion contract to Microsoft.
The Lowdown: U.S. Judge Patricia Campbell-Smith this week issued a preliminary injunction that had been requested by Amazon Web Services (AWS), which in November filed suit against the DoD. Microsoft Azure was scheduled to start work on the Joint Enterprise Defense Infrastructure (JEDI) project this week.
The Details: As part of her order, Campbell-Smith ordered Amazon to post $42 million in case the injunction is ruled to be incorrect. The documents around the injunction remain sealed.
The judge’s decision comes days after Amazon’s request to have President Trump and Defense Secretary Mark Esper testify regarding the awarding of the contract to Microsoft became public. Amazon has noted Trump’s highly public and continuous criticism of Amazon CEO and Washington Post owner Jeff Bezos over the past several years and claims his bias against Bezos influenced the decision to give the JEDI contract to Microsoft. Amazon officials also have said the president has shown a pattern of using his position to interfere with government business to help push forward his own political agenda.
DoD officials have criticized Amazon’s actions since the 10-year contract was awarded to Microsoft in October, a move that stunned AWS, the world’s largest public cloud service provider that had been the perceived front-runner for the JEDI work. They have said the lawsuit is unnecessarily delaying its efforts to modernize its military capabilities.
Microsoft officials have said that the contract would give its Azure business – which is a distant second behind AWS – a significant boost.
The Impact: The injunction is sure to have a ripple effect beyond delaying the start of work on the project, which involves the Pentagon migrating its infrastructure, applications, and data to the cloud. As has been noted, it also will likely impact the business of Microsoft’s partners in the federal government space.
Background: The JEDI contract has been mired in controversy from the outset. IBM and Oracle both complained that the contract requirements that were released in 2018 appeared to favor AWS and Azure, and Oracle sued after it and IBM were dropped from consideration. The lawsuit was eventually dismissed. There also were questions raised in some quarters – including by Google Cloud – about the decision to go with a single cloud provider for such a massive and complex project.
Politics also found its way into the mix, with several Republican senators questioning the Defense Department decisions during the process for awarding the contract. Trump also said he wanted his administration to look into the contract process and former Defense Secretary James Mattis said in a book that the president wanted to “screw Amazon” out of the contract.
The Buzz: “While we are disappointed with the additional delay, we believe that we will ultimately be able to move forward with the work to make sure those who serve our country can access the new technology they urgently require,” Microsoft officials said in a statement. “We have confidence in the Department of Defense, and we believe the facts will show they ran a detailed, thorough, and fair process in determining the needs of the warfighter were best met by Microsoft.”
“The Department of Defense (“DoD”)’s award of the Joint Enterprise Defense Infrastructure (“JEDI”) Contract suffers from myriad, highly unusual anomalies and outright errors that prejudiced AWS on nearly every evaluation factor,” AWS wrote in court documents submitted last month. “While these errors reveal a process that was fatally flawed and highly unusual, the clear and lengthy public record of President Donald J. Trump’s interference in the JEDI procurement, and how President Trump’s actions, comments, and directives were communicated to, understood by, and ultimately affected DoD decision makers, raise grave concerns that these errors and the ultimate award decision were based on bias and bad faith.”