Did Trump interfere with the $10 billion JEDI Pentagon cloud deal? "No question," says Amazon

Profile picture for user slauchlan By Stuart Lauchlan February 11, 2020
Summary:
Amazon wants Donald Trump in court to answer questions about alleged interference in the Pentagon's multi-billion dollar cloud contract.

Donald Trump

Amazon’s protests over the $10 billion JEDI cloud contract with the Pentagon have dramatically escalated with demands to depose President Donald Trump to answer questions about his alleged interference in the procurement process.

Procurement for the 10 year Joint Enterprise Defense Infrastructure (JEDI) contract kicked off in 2018 with the intention of naming a provider later that year. In the event, the procurement quickly became bogged down as the stated intention to appoint a sole contractor attracted protests. IBM and Google dropped out of the running while Oracle was excluded when it was decided that its bid didn’t meet the contract requirements, an assertion the firm contests.

Amazon was widely regarded as the likely winner of the deal, but in October last year the contract ended up being given to Microsoft, weeks after Trump told reporters:

I will be asking them to look at it very closely to see what’s going on because I have had very few things where there’s been such complaining. Not only complaining from the media — or at least asking questions about it from the media — but complaining from different companies like Microsoft and Oracle and IBM. Great companies 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.

Amazon immediately cried foul, but Dana Deasy, CIO at the Department of Defense, told the Senate Armed Services Committee in October last year that the White House could not have interfered in the process:

We have kept the identities of every member of the source selection team anonymous throughout this process. In my discussions with the Deputy Secretary of Defense and the Secretary of Defense, at no time throughout this process have I ever shared any proprietary source information with them, nor have I ever divulged, when we got to the conclusion, who the awardee was.

That wasn’t good enough for Amazon which filed a legal protest in November, alleging “unmistakeable bias” in the awarding of the contract. Now court documents released yesterday reveal some very specific allegations aimed at Trump, former Defense Secretary James Mattis and his successor Mark Esper among others. Although redacted in places, the filing pulls no punches, stating bluntly:

President Donald J. Trump has repeatedly demonstrated his willingness to use his position as President and Commander in Chief to disrupt the orderly administration of government functions -including federal procurements- to advance personal motives. There is no question he did so here.

It goes on to highlight Trump’s personal antipathy towards Amazon CEO Jeff Bezos as a “matter of public record”, citing:

Even before taking office, President Trump campaigned on a promise that Amazon would "have problems" if he became President. When it came time for DoD to select a cloud-services provider to fulfill the important JEDI Conti-act, the President made crystal clear-both to the public at large, and by clear implication to senior DoD officials (including his political appointees} that he did not want his Administration to award the contract to AWS. In addition to his public tweets and statements criticizing Amazon and Mr. Bezos, he directed DoD to "screw Amazon" out of the JEDI Contract….When then-candidate Trump made his foray into the political sphere, he made clear that if he became President he would use his power to disadvantage Amazon and the WashingtonPost: ‘Believe me, if I become President, oh do they have problems. They’re going to have such problems.'

The Amazon court filing also pulls Oracle into its allegations, claiming that Trump was “emboldened by allies who also were Amazon's competitors”:

For instance, in early 2018, President Trump held a private dinner with Safra Catz, co-CEO of AWS-competitor Oracle and a member of President Trump's presidential transition team. During that dinner, Ms. Catz advocated against awarding AWS the JEDI Contract. In the days surrounding his dinner with Ms. Catz, President Trump increased his negative public rhetoric toward Amazon. President Trump's discussions with Ms. Catz and his advisors culminated in the summer of 2018, when he ordered his then-Secretary of Defense James Mattis to "screw Amazon" out of the JEDI Contract.

Mattis reportedly protested. Trump fired him 6 months later and installed Mark Esper as his replacement. Esper is a dyed-in-the-wool Trump supporter who has publicly stated that as Commander-in-Chief, the President has "every right, authority and privilege to do what he wants to do”. He has also stated that he “absolutely” follows the President’s instructions. According to the Amazon complaint:

The inference is clear-Secretary Esper followed President Tump's clear directives by intervening at the eleventh hour to halt the award when it appeared imminent that AWS was likely to win the JEDI Contract.

How? 

So if the Amazon allegations of inappropriate interference are true, how did the various parties at the heart of this ‘rig’ the decision to their own ends? The DoD made a series of errors, insists Amazon, including:

relying on an outdated, superseded version of AWS's proposal; contradicting its own earlier factual determinations; misstating facts from AWS's proposal; downplaying gross deficiencies and failures in Microsoft's proposal and demonstrations; and fabricating areas of superiority in the final stages of evaluation to favor Microsoft. These errors ultimately resulted in DoD awarding the JEDI Contract to a technologically inferior proposal that did not present the best value to the Government.

Clearly there’s an inevitable element of ‘they would say that, wouldn’t they’, coming from a company that lost the bid. But Amazon’s complaint makes the case that Trump has form for “repeated intervention in the full spectrum of governmental functions to make a point to his perceived critics or to advance some personal agenda. In just the procurement space alone, President Trump has interfered in a series of significant government  contract awards.

The filing cites the US Army Corps of Engineers' award of a $400 million border wall construction contract to Fisher Industries in December 2019, which it alleges Trump personally backed, and the General Services Administration's tender to move FBI headquarters away from the nearby Trump International Hotel in downtown Washington to a new campus in suburban Maryland or Virginia. Although this move had been planned for a decade, it was aborted after Trump took office, with Amazon arguing that this meant that the Washington site would not be redeveloped by potential competitors to the Trump hotel.

Amazon is also seeking an injunction to halt meaningful work on JEDI until its legal case is heard. A decision on that is expected later this week.

Meanwhile the Pentagon has said it plans to start work on the project tomorrow.

My take

Let’s start with the obvious - there’s not a hope in hell of getting Trump on the stand to be grilled about his role in this. Amazon basically acknowledges that when it says in its filing:

AWS acknowledges that there are sensitivities with deposing President Trump. While it is clear that a President can be subject to judicial process while in office…AWS will work with the Court and the Department of Justice to develop appropriate protocols and safeguards, including to evaluate alternative methods, to ensure that the testimony is procured in a manner sensitive to the unique position of the Executive Office of the President.

Yes, well, good luck with that. But it’s clear that Amazon isn’t going to let the controversy around this project award go. We said back in October 2018 that JEDI was shaping up to be a textbook example of how not to handle a public sector procurement, concluding at the time:

This is a very messy procurement - and it’s only likely to get messier. Badly done, DoD, badly done.

Little did we know then what was to come. Or indeed what is yet to come now. As we noted last August:

Department of Defense 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 would be an ‘interesting’ angle to have to spin as the 2020 Presidential Election race hots up.