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Home / US / Following Trump's concern over Amazon's concerns, Secretary of Defense Mark Esper's Pentagon re-examines the $ 10 billion JEDI cloud contract process

Following Trump's concern over Amazon's concerns, Secretary of Defense Mark Esper's Pentagon re-examines the $ 10 billion JEDI cloud contract process




Defense Secretary Mark Esper gestures as he listens to President Trump's speech during a ceremony for Esper on Sunday at the Pentagon. (Jonathan Ernst / Reuters)

The White House has instructed newly appointed Defense Secretary Mark T. Esper to re-examine the military's massive cloud computing contract, fearing that the offer to Amazon officials Going near the decision-making process said. The intervention of the Oval Office at the eleventh hour takes place just weeks before the expected announcement of the knock-down bid and has now left an important military priority in the air, officials said on condition of anonymity, the process of closed Door to discuss freely. Last Sunday, the Department of Defense had defended its plans to acquire a single enterprise for the Joint Enterprise Defense Infrastructure (JEDI), a $ 10 billion contract that would rank among the government's most expensive IT contracts.

No decision has yet been made, officials said. However, some officials said the move to awarding the contract to more than one company was an option.

The president's directive represents a departure from what is usually a bureaucratic process in scripts. Trump has often spoken out against Amazon and its CEO Jeff Bezos. And at times Trump has reconciled Bezos' ownership of the Washington Post with Amazon's interests.

Amazon did not immediately return a request for comment.

Defense Secretary Mark Esper said he spoke with Defense in an interview with The Post Thursday Dana Deasy, the division's chief information officer, will discuss the contract with Paul Nakasone, director of the National Security Agency. Esper said he would not hurry to make a decision.

"I've heard of people in the administration, so I owe a new look to the new guy coming in, study it, and make sure I understand the different factors," Esper said. "I'll take a closer look, we will not make decisions soon until I agree and … then we will consider what adjustments we may need to make."

Contract awarded to more than one person Companies would be greeted by Oracle and IBM, whose business is threatened by Amazon, and they have sued unsuccessfully to block the award, and the Pentagon has said that only Amazon and Microsoft meet the minimum requirements for JEDI.

Oracle has Trump in this He aggressively criticized and hoped to appeal to Amazon as well as former Defense Secretary Jim Mattis, who angered the president as he resigned last year because of the government's foreign policy decisions, said Ken Glueck, executive vice president of Oracle, of the business for insurance policies in Washington, said he has a colorful A Flowchart titled "A Conspiracy to Establish a Ten-Year DoD Cloud Monopoly," Showing Connections Between Amazon Managers, Mattis, and Obama Administration Representatives

This graphic reached Trump's desk and led to a discussion between the President and his adjutants. In April of last year, Oracle co-CEO Safra Catz spoke directly to Trump at a White House dinner.

In an interview this week, Glueck said he plans to win Esper for the JEDI contract.

] "There is a new leadership in the Department of Defense, which is a chance," said Fortune. "There is a lot of debate in the Department of Defense as to whether [awarding the $10 billion contract to just one company] is the best approach. It is not over until it's over. "

Last month, the president told reporters at a press conference that he had asked staff members to investigate the JEDI contract, alleging complaints from companies competing with Amazon.

I get huge complaints about the contract with the Pentagon and with Amazon. … they say it was not competitive, "Trump said in a July 18 press review," some of the biggest companies in the world complain about what has to do with Amazon and the Department of Defense, and I'm going to ask them Look carefully to see what's going on. "

Trump's bid could blow the federal ambitions of Amazon Web Services, the market-leading cloud computing vendor, AWS is the only company with the highest IT certification Ministry of Defense (Impact Level 6), which allows him to process top-secret data, much of this benefit stems from a $ 600 million CIA contract signed in 2013.

The JEDI agreement aims to build a departmental cloud computing infrastructure that facilitates the sharing of sensitive information between the army and the navy: Marines and Air Force. The Department of Defense also sees this as an important building block for the integration of artificial intelligence algorithms into warfare.

"We have never created an enterprise cloud," Deasy told the Post in September. "It simply did not make sense to start with a number of companies while building a business ability." Additional companies would "double or triple their complexity," Deasy said.

Not the first time that Trump deals with procurement issues. The Pentagon and Lockheed Martin accused the president of having helped them reach a deal that raised $ 728 million from the cost of the F-35 Joint Strike Fighter program.

There are also precedents for Trump's attempt to dump Libra specifically against Amazon. In May of last year, Trump championed Postmaster General Megan Brennan to double the rate that the postal service charges Amazon and other companies for shipping parcels. The increase, which had to be reviewed by a regulatory commission, was never implemented.

Since the announcement of the JEDI contract in March last year, the allegation that the process was being compromised on Amazon has been continually raised by Oracle, IBM and Microsoft.

Oracle alleged in a lawsuit that the Ministry of Defense's bidding process was plagued by conflicting interests that would have helped Amazon. Oracle's attempt to block the award was rejected this month. But the judge in charge of the case asked in a long, unsealed document on Friday new questions on the Pentagon's legal argument for awarding a major contract.

Defense spokeswoman Elissa Smith said in a statement on Sunday that the judge also told the Pentagon that it was "reasonably justified" to award a single contract. Despite the "tensions" in the judge's ruling, the department felt that the court's decision to select a company for procurement had been upheld.

Her statement also contained harsh words to Oracle in a sign of how bitter the dispute over JEDI has become. Smith said Oracle has used "ill-informed and often manipulative speculation" to prevent the contract from going to Amazon.

IBM also protested to the Government Accountability Office. But his case was rejected.

Government officials said it would be inappropriate for a president to influence procurement when directing a contract to or from a particular company.

"Before awarding – if that's changed The Defense Department must change its acquisition strategy, it will have a lot of flexibility for it. And a new Secretary of Defense who is changing strategy is not inappropriate, "said Alan Chvotkin, vice president and general counsel at the Professional Services Council, a government-owned trading group. "The only thing that would bother me about the president's involvement is if he's involved in source selection."

Tom Davis, former representative of Virginia, now partner in contract law at Holland & Knight, said the president The intervention is likely to be the subject of litigation.

"He has the right to terminate the contract," Davis said. "But he can not say, do not pass it on to Amazon, give it to someone else." That would lead to legal issues. "

Missy Ryan and Jay Greene contributed to this report.


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