Amazon urges judge to set aside $10 billion cloud contract award to Microsoft

[December 16, 2020]    By David Shepardson

WASHINGTON (Reuters) - Amazon.com urged a U.S. judge to toss out the Pentagon's $10 billion JEDI cloud computing contract award after the Defense Department said in September a court-ordered re-evaluation had determined Microsoft Corp's proposal still represented the best value for the government.

 The Amazon logo is pictured outside the company's JFK8 distribution center in Staten Island, New York, U.S. November 25, 2020. REUTERS/Brendan McDermid/File Photo

The company's Amazon Web Services (AWS) unit said in a redacted Oct. 23 court filing unsealed on Tuesday that the award to Microsoft must "be invalidated because it is the product of systematic bias, bad faith, and undue influence exerted by President Trump to steer the award away from" the company. It called it a "flawed and politically corrupted decision."

The White House declined to comment, referring questions to the Justice Department. The Pentagon did not immediately comment.

Microsoft said in a statement Tuesday "career procurement officials at the DoD decided that given the superior technical advantages and overall value, we continued to offer the best solution."

It added "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."

AWS said in a statement Tuesday that as a result of the Pentagon revision in September "the pricing differential swung substantially, with AWS now the lowest-priced bid by tens of millions of dollars."

A judge in February granted Amazon's request to temporarily halt the deal from moving forward; that remains in place.

The court is considering motions to dismiss Amazon's amended complaint that have been filed by the government and Microsoft. The motions have not been made public and it is not clear when the judge might rule.

Amazon, which had been seen as a front-runner to win the contract, filed a lawsuit in November 2019 after the contract was awarded to Microsoft. Trump has publicly derided Amazon head Jeff Bezos and repeatedly criticized the company.

Amazon's new filing said Trump and his administration "intensified a campaign of interference and retribution against those in DoD perceived as disloyal to the president or capable of reaching conclusions at odds with his personal interests."

The company argued the latest Pentagon review was "riddled with errors even more egregious than those that plagued the initial award," and that the Pentagon "manipulated its evaluations to a degree that belies any facade of rationality."

The Joint Enterprise Defense Infrastructure Cloud (JEDI) contract could reach as much as $10 billion and is part of a broader digital modernization of the Pentagon.

Then-Defense Secretary Mark Esper said the Pentagon made its choice fairly. Trump fired Esper last month.

(Reporting by David Shepardson, Editing by Rosalba O'Brien, Sonya Hepinstall and Raju Gopalakrishnan)

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