Pentagon: Re-evaluation finds Microsoft's JEDI proposal still is best

[September 05, 2020]  By David Shepardson and Eric Beech

WASHINGTON (Reuters) - The U.S. Defense Department said on Friday it has completed a comprehensive re-evaluation of its $10 billion JEDI cloud computing contract proposals and determined that Microsoft Corp's <MSFT.O> submission still represents the best value for the government.

Despite the reaffirmed award, the result of a comprehensive re-evaluation by the U.S. Department of Defense, the contract remains on hold after a judge in February granted Amazon.com Inc's <AMZN.O> request to temporarily halt the deal from moving forward.

Amazon, which has argued the contract process reflected undue influence from President Donald Trump, said on Friday it would "not back down in the face of targeted political cronyism or illusory corrective actions, and we will continue pursuing a fair, objective, and impartial review."

The company called the Pentagon's "re-evaluation nothing more than an attempt to validate a flawed, biased, and politically corrupted decision" and said in the last review it "offered a lower cost by several tens of millions of dollars"

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

The Microsoft logo is pictured ahead of the Mobile World Congress in Barcelona, Spain February 24, 2019. REUTERS/Sergio Perez

Amazon closed down 2.2%.

Microsoft said it appreciated "that after careful review, the DoD confirmed that we offered the right technology and the best value. We’re ready to get to work."

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 aimed at making it more technologically agile.

The Amazon lawsuit said the 2019 Pentagon decision was full of "egregious errors", which it suggested were a result of "improper pressure from Trump, who launched repeated public and behind-the-scenes attacks" to steer the contract away from Amazon to harm Bezos.

As well as deriding the Amazon head, Trump has accused the Washington Post newspaper, owned by Bezos, of unfair coverage.

Defense Secretary Mark Esper has rejected that there was bias and said the Pentagon made its choice fairly.

(Reporting by Eric Beech and David Shepardson; Editing by Mohammad Zargham, Hugh Lawson and Sonya Hepinstall)

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