Score one for Amazon as the firm wins a legal bid to halt work on the Pentagon’s controversial $10 billion JEDI cloud program until its challenge to the procurement process has been deal with.
The ten year contract for the Joint Enterprise Defense Infrastructure (JEDI) had looked likely to be awarded to Amazon until an intervention by US President Donald Trump led to a last minute examination of the procurement by Defense Secretary Mark Esper. The contract winner was then announced to be Microsoft.
Amazon alleges that Trump influence the decision out of personal enmity towards Amazon CEO Jeff Bezos and has filed a request to depose the President, Esper and various other figures involved in the decision-making process to answer questions about their conduct during the procurement period. A decision on that is expected in a few weeks.
But with work due to begin on JEDI earlier this week, Amazon’s plea to suspend all activities until its legal plea can be heard found favor with Judge Patricia Campbell-Smith in the US Court of Federal Claims. The content of her opinion remains sealed for the time being, but her decision is:
The United States, by and through the Department of Defense, its officers, agents, and employees, is hereby PRELIMINARILY ENJOINED from proceeding with contract activities under Contract No. HQ0034-20-D-0001, which was awarded under Solicitation No. HQ0034-18-R-0077, until further order of the court.
Amazon has to put up a $42 million deposit "for the payment of such costs and damages as may be incurred or suffered in the event that future proceedings prove that this injunction was issued wrongfully”, but that’s a ‘petty cash’ risk that’s worth taking for the firm.
Nothing to see here?
The Pentagon insists that there is no impropriety to be found in examining how JEDI got to the position it’s in:
We are confident in our award of the JEDI Ccoud contract to Microsoft and remain focused on getting this critical capability into the hands of our warfighters as quickly and efficiently as possible.
For its part, Microsoft issued a restrained response:
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. 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.
Microsoft’s reaction has been carefully worded, while Amazon has yet to say a thing about what is a big win for it, albeit only a battle, not the war by any manner of means.
What is likely to be more unrestrained will be the political backlash that is certain to result from Amazon’s success in putting the brakes on the project. Department of Defense (DoD) CIO Dana Deasey has previously warned that a delay to the JEDI delivery timeline would slow down the program’s objective to develop next generation applications and systems for the defense and security of the United States.
That’s going to make for some bellicose and crowd-pleasing soundbytes in this election year. The DoD had warned in its own legal filings that such a delay would cost the US taxpayer up to $7 million per month, which would be “unrecoverable financial harm.”
The Pentagon has already stated that the decision will hurt US troops:
We are disappointed in today's ruling and believe the actions taken in this litigation have unnecessarily delayed implementing DoD's modernization strategy and put our nation's warfighters in harm's way.
Expect Trump’s comments to be considerably more colorful and Amazon to be painted as unpatriotic and disloyal. (It's worth remembering when the innuendo kicks off that Bezos has actually stated that “If big tech is going to turn their backs on the Department of Defense, this country is in trouble, that just can’t happen.' )
Still, this latest development might provide one topic of conversation for the President next week when he takes part in Oracle founder Larry Ellison’s ‘Golf Outing and Reception' fundraiser for Trump. Oracle has itself cried foul over the way the JEDI procurement was handled, with CEO Safra Catz accused by Amazon of warning Trump that the contract shouldn’t go to AWS alone.