Trump steps into the Pentagon's $10 billion Jedi cloud controversy - all bets are off?

Profile picture for user slauchlan By Stuart Lauchlan August 2, 2019
Summary:
It wasn't entirely a surprise, but the President's eleventh hour intervention throws everything up in the air.

trumpclimate

When President Donald Trump last week started talking about “great companies…complaining about it”, it seemed entirely plausible that he was about to stage an intervention in the Pentagon’s controversial $10 billion cloud procurement for its Jedi project.

Yesterday that came to pass as the Trump administration’s new Defense Secretary Mark Esper announced that he is to review the contract award process and that “no decision on the program” will be made until that review is completed.

The Jedi (Joint Enterprise Defense Initiative) contract has been mired in controversy for over a year. Oracle in particular has objected to the procurement process which is based around appointing a sole provider rather than dividing the project up among multiple cloud vendors.

IBM also lodged a formal objection last year, while Google pulled out after employee activism, citing ethical concerns.

The choice has currently been drilled down to two options - Amazon Web Services and Microsoft. Last month a legal challenge levelled by Oracle was rejected by US Senior Judge Eric Bruggink, who rejected alleged conflict of interest claims centered on the Pentagon and AWS:

We conclude as well that the contracting officer’s findings that an organizational conflict of interest does not exist and that individual conflicts of interest did not impact the procurement were not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

This was a decision welcomed by the Pentagon and the Department of Defense, which hoped to make a final decision mid-August. But that was before President Trump decided to make a highly unusual intervention, seemingly on the back of pleas made by other vendors. He said last week that:

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.

DoD decision 

An official statement was issued by the Defense Department yesterday:

Keeping his promise to Members of Congress and the American public, Secretary Esper is looking at the Joint Enterprise Defense Infrastructure (JEDI) program. No decision will be made on the program until he has completed his examination.

In an interview with The Washington Post, Esper appeared to open up the prospect of an eleventh hour alteration to the contract, potentially paving the way for appointing multiple providers rather than the sole contractor preferred by the Pentagon:

I’ve heard from folks in the administration, so I owe, as the new guy coming in, a fresh look at it, study it, make sure I understand all the different factors. I’m going to take a hard look at it. We’re not going to be making any decisions soon until I’m comfortable with where it is and . . . then we’ll look at what adjustments we need to make, if any.

If last minute changes are made, it’ll be a significant victory for Oracle. The company’s co-CEO Safra Catz is reported to have raised the issue directly with Trump during a dinner at the White House.

Amazon has yet to comment. The firm’s CEO Jess Bezos has been a long-time recipient of Twitter-rage by Trump, who regularly attacked Bezos-owned Washington Post as one of the worst publishers of “Fake News”

My take

Trump’s intervention was predictable, but will still raise eyebrows. Republican members of the House Armed Services Committee wrote an open letter to the President following his comments on Jedi, essentially warning him not to get involved:

Our committee has conducted oversight of this contract from the beginning. While it is understandable that some of the companies competing for the contract are disappointed at not being selected as one of the finalists, further unnecessary delay will only damage our security and increase the costs of the contract.

What happens now? Who knows? The political rulebook hasn’t so much been torn up these days as put through the shredder and the resulting strips torched for good measure.

As I've said before, I have some sympathy with the objections to the 'single supplier' approach to such a mega-contract. It smacks of 'Big IT' of the worst kind. That said, a moving of the goalposts at this late stage of the Jedi procurement would be highly unusual, but feasible if that's what Esper concludes he (and the President) wants.

But the 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.