Federal Judge Halts Pentagon Cloud Contract, in Win for Amazon

Date : 02/13/2020 @ 8:30PM
Source : Dow Jones News
Stock : Microsoft Corporation (MSFT)
Quote : 159.61  9.91 (6.62%) @ 5:55PM
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Federal Judge Halts Pentagon Cloud Contract, in Win for Amazon

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By John D. McKinnon 

WASHINGTON -- A federal judge ordered the Pentagon to halt work on the massive JEDI cloud-computing contract, handing Amazon.com Inc. an early win in its efforts to overturn the award to rival Microsoft Corp.

Judge Patricia Campbell-Smith of the U.S. Court of Federal Claims issued the preliminary injunction on Thursday to block the Pentagon from proceeding with the contract, "until further order of the court," according to a court docket entry. The judge's order itself remains sealed temporarily.

Amazon's cloud unit, AWS, was long considered the favorite to win the Joint Enterprise Defense Infrastructure, or JEDI, contract, which is valued at as much as $10 billion over the next decade. The company's bid was clouded by conflict-of-interest allegations, however, which are still under investigation by the Pentagon's inspector general.

Amazon filed suit to block the contract award in December, contending that the Pentagon's choice of Microsoft was improperly influenced by President Trump's public complaints about Amazon.

Mr. Trump has blamed Amazon founder Jeff Bezos for unfavorable coverage of his administration in the Washington Post, which Mr. Bezos bought in 2013. The Post says its editorial decisions are independent.

Amazon recently has sought to depose Mr. Trump as well as other administration officials over their actions.

Amazon said in its motion that Mr. Trump "made crystal clear -- both to the public at large, and by clear implication to senior [Pentagon] officials (including his political appointees) -- that he did not want his administration to award the contract to [Amazon]."

Amazon said in a recent statement that Mr. Trump "has repeatedly demonstrated his willingness to use his position as president and commander in chief to interfere with government functions -- including federal procurements -- to advance his personal agenda."

The Defense Department is fighting the case. It has said it "remains confident in the JEDI award. Our team's duty and sole focus must remain on equipping our warfighters for an increasingly complex and challenging battlefield environment."

The Pentagon previously has said the "selection decision was made by an expert team of career public servants and military officers from across the Department of Defense and in accordance with DOD's normal source-selection process."

In a statement, Microsoft said it was confident it would ultimately prevail and retain the contract.

"While we are disappointed with the additional delay, we believe that we will ultimately be able to move forward with the work to make sure those who serve our country can access the new technology they urgently require," said the statement from Frank X. Shaw, corporate vice president of communications for Microsoft.

Write to John D. McKinnon at john.mckinnon@wsj.com

 

(END) Dow Jones Newswires

February 13, 2020 15:15 ET (20:15 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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