AWS claims “unmistakeable bias” in JEDI lawsuit

Profile picture for user jbowles By Jerry Bowles November 18, 2019
Summary:
Amazon files legal challenge claiming it was sabotaged by President Trump’s hatred of Jeff Bezos. anyone surprised?

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For anyone who has been following the long and nasty battle between America’s cloud giants vying to become the single source provider of the Pentagon’s potential $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud contract, it will probably not surprise you to learn that the official award of the deal to Microsoft on October 25 has not ended the controversy.  Not even a little bit.

The  Federal Times reported on Friday that Amazon Web Services (AWS) has filed a legal challenge to the Pentagon’s decision with the U.S. Court of Federal Claims claiming that the whole acquisition process was tainted by “unmistakeable bias.”  The context of that claim is President Donald Trump’s unhidden animosity toward its founder/CEO Jeff Bezos, who—not coincidentally—owns the Washington Post, a fierce Trump critic that he has labeled “fake news.”  

Amazon spokesman Drew Herdener said in a statement:  

It’s critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence,” he said. “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.

AWS CEO Andy Jassy was even more direct at an all-hands company meeting on November 14:

I think when you have a sitting president who’s willing to publicly show his disdain for a company and the leader of a company, it’s very difficult for government agencies including the DoD to make an objective decision without fear of reprisal.

He added:

We feel pretty strongly that it wasn’t adjudicated fairly. I think that if you do any thorough, apples-to-apples, objective comparison of AWS versus Microsoft you don’t come out deciding that they’re comparable platforms. Most of our customers will tell us that we’re about 24 months ahead of Microsoft in functionality and maturity.

The troubled history of JEDI

The giant JEDI project, first announced in March 2018, has been plagued by controversy virtually since day one. Four companies — Oracle, IBM Corp., Amazon and Microsoft — were initially allowed to bid for the winner-take-all contract.  

The decision to use a single provider for a centralized system that would make up roughly 80 percent of the military’s cloud applications angered all of AWS’ smaller cloud rivals who believed the competition was rigged to favor AWS.  

  • Shortly after the DoD finalized the JEDI RFPs in July 2018, Oracle filed a pre-award protest with the Government Accountability Office claiming the Pentagon’s decision to choose a single-cloud provider favored AWS and was anti-competitive. Oracle further claimed AWS had conflicts of interest in the bidding process.  
  • In October, IBM also challenged the single provider requirement by filing a pre-award bid protest with the Government Accountability Office.     
  • In November 2018, the GAO ruled that the DoD had followed regulations and statutes governing competition. Oracle then took its case to the Court of Federal Claims, beginning a long court battle involving AWS as a defendant.
  • That claim was rejected in April 2019 when the DoD found no conflict in the acquisition process, but did uncover some potential ethical violations,  which It directed to the inspector general for further investigation. 
  • That set up an investigation of the whole process by the DoD’s IG that may or may not have been completed before the contract was awarded  
  • President Trump, who has been tweeting bad things about Jeff Bezos and Amazon for nearly three years, involved himself directly in the controversy in July of this year when he surprised the industry by openly questioning whether the contract was being competitively bid:

I’m getting tremendous complaints about the contract with the Pentagon and with Amazon.  Some of the greatest companies in the world are complaining about it, having to do with Amazon and the Department of Defense, and I will be asking them to look at it very closely to see what’s going on.

  • He directed the new Defense Secretary Mark Esper to take a fresh look the contract.  Esper put the contract on hold on August 1.
  • Microsoft was awarded the contract on October 25, three days after Secretary Esper recused himself from the process on the grounds that his son worked for IBM.

My take

The long-delayed JEDI project looks like it is going nowhere fast.  Not only has AWS filed a legal challenge to the award, Oracle has appealed the Court of Federal Claims JEDI Decision that rejected its previous claim.

The whole series of unfortunate events highlights how murky the procurement process has become in a business climate that seems to get increasingly politicized by the day.  The JEDI episode may become the textbook example of how not to get it right.  Enterprises seeking taxpayer-funded projects should consider themselves duly warned.