Secretary of Defense Awarding of Pentagon Contract to Microsoft Over Amazon Was Done ‘Freely and Fairly’

November 15, 2019 Updated: November 15, 2019

Defense Secretary Mark Esper said Friday he is certain that the awarding of a $10 billion cloud-computing contract to Microsoft instead of Amazon was done fairly.

The Pentagon awarded the contract to Microsoft in late October, and Amazon said there was “unmistakable bias” on the government’s part and it intended to challenge the decision in court.

“I am confident that it was conducted freely and fairly without any type of outside influence,” Esper said at a news conference in Seoul, South Korea.

Amazon’s competitive bid for the “war cloud” project drew criticism from President Donald Trump and its business rivals. The project, formally called the Joint Enterprise Defense Infrastructure, or JEDI, pitted leading tech titans Microsoft, Amazon, Oracle, and IBM against one another. The latter two were eliminated before the Department of Defense eventually chose Microsoft last month.

In a statement Thursday, Amazon said “numerous aspects” of the bidding process involved “clear deficiencies, errors, and unmistakable bias.” It did not elaborate on those allegations but said: “it’s important that these matters be examined and rectified.”

Microsoft did not respond to a request for comment. A Department of Defense spokeswoman would only say that the Pentagon won’t speculate on potential litigation.

JEDI will store and process vast amounts of classified data, allowing the U.S. military to use artificial intelligence to speed up its war planning and fighting capabilities.

This combination of file photos shows the logos for Amazon, top, and Microsoft. (Richard Drew and Ted S. Warren, File/AP Photo)

Esper Recused Himself

Esper recused himself from the JEDI decision last month because of his son’s employment.

A spokesman said the recusal was because Esper’s adult son works for IBM.

“Although not legally required to, he has removed himself from participating in any decision making following the information meetings, due to his adult son’s employment with one of the original contract applicants. Out of an abundance of caution to avoid any concerns regarding his impartiality, Secretary Esper has delegated decision-making concerning the JEDI Cloud program” to Deputy Secretary David Norquist, the spokesman said in a statement.

“The JEDI procurement will continue to move to selection through the normal acquisition process run by career acquisition professionals.”

An IBM spokesman said in a statement Esper’s son started as a digital strategy consultant in February and that he was not involved in IBM’s attempt to secure the JEDI contract.

Trump previously criticized the process, telling reporters in July: “I’m getting tremendous complaints about the contract with the Pentagon and with Amazon. They’re saying it wasn’t competitively bid. This is going on for a long time—I guess, probably, before this administration. And we’re looking at it very seriously.”

“It’s a very big contract. One of the biggest ever given having to do with the cloud and having to do with a lot of other things. And we’re getting tremendous, really, complaints from other companies and from great companies. Some of the greatest companies in the world are complaining about it, having to do with Amazon and the Department of Defense,” he added.

“And 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. So we’re going to take a look at it. We’ll take a very strong look at it.”

The Associated Press contributed to this report.

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