Amazon files legal challenge to Microsoft’s Pentagon cloud contract win


On Friday, Amazon’s Web Services (AWS) announced that it filed a lawsuit objecting to the outcome of the recent U.S. Department of Defense contract bidding process. In late October, Microsoft secured a $10 billion, 10-year deal to provide cloud computing services to the Pentagon. However, the Bezos-led company alleges that the federal government showed bias in its selection process.

Amazon’s Legal Objection

Amazon has filed its suit regarding the loss to Microsoft with the U.S. Court of Federal Claims. Notably, the corporation is keeping the specifics of its objection under wraps. It asked the court for a protective order due to the disclosures involved in the contract bidding process.

“The Complaint and related filings contain source selection sensitive information, as well as AWS’s proprietary information, trade secrets, and confidential financial information, the public release of which would cause either party severe competitive harm,” read Amazon’s court documents.

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Despite the secrecy surrounding the claim, industry watchers have anticipated the e-commerce company’s lawsuit for almost a month.

Amazon and Microsoft were two of many large technology companies that bid for the Defense Department’s Joint Enterprise Defense Infrastructure (JEDI) project. The Pentagon wants one web services vendor to build out its enterprise cloud. Because of the size of the initiative, most of America’s leading cloud vendors sought the contract.

As AWS is the nation’s leading cloud services provider, its success seemed assured. Then, the Pentagon unexpectedly went with a provider that only has a 16 percent share of the enterprise cloud market. When the Defense Department announced that Microsoft won the contract in October, an Amazon spokesperson said the company found its rival’s victory surprising.

Since then, Amazon has moved from surprise to anger regarding its loss of the $10 billion contract.

‘Unmistakable Bias’

Earlier this month, The New York Times reported that the firm intended to challenge the federal government’s selection in court. Amazon spokesman Drew Herdener told the publication, “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.”

Herdener’s mention of “unmistakable bias” refers to President Trump’s objection to Amazon winning the contract. In the past, the Commander-in-Chief publicly stated that another firm should serve as the Pentagon’s cloud vendor.

Furthermore, in his new book, Guy Snodgrass, a former screenwriter for ex-defense secretary James Mattis claims that Trump took an active role in denying Amazon the JEDI contract. However, the writer also claims that Mattis rejected the order and worked to ensure the fairness of the government’s final selection.

If the court determines that Sondgrass’s account lines up with reality, Amazon might lose its case. Then again, the firm might argue that attempted presidential intervention is only part of the reason it lost a contract it should’ve won.

Regardless of how the court rules regarding Amazon’s claim, Microsoft’s work on JEDI will be affected. Daniel Ives, managing director for Wedbush Securities, told The New York Times that the e-commerce giant’s challenge would prompt a Pentagon investigation. As a result, Microsoft will delay its work on the Pentagon’s cloud buildup by 60 to 90 days.