By John D. McKinnon
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 14, 2020).
WASHINGTON -- In a win for Amazon.com Inc., a federal judge
ordered the Pentagon on Thursday to halt work on the massive JEDI
cloud-computing contract awarded to rival Microsoft Corp.
Judge Patricia Campbell-Smith of the U.S. Court of Federal
Claims issued a preliminary injunction to block the Pentagon from
proceeding in response to a lawsuit from Amazon contending improper
influence from President Trump.
Mr. Trump, a Republican, 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, which recently sought to depose the president, 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]."
In a statement, the Pentagon said that the ruling further slows
the enterprise cloud project, which has been under development
"We are disappointed in today's ruling and believe the actions
taken in this litigation have unnecessarily delayed implementing
DoD's modernization strategy and deprived our warfighters of a set
of capabilities they urgently need," the Pentagon said. "However,
we are confident in our award of the JEDI cloud contract to
Microsoft and remain focused on getting this critical capability
into the hands of our warfighters as quickly and efficiently as
Amazon's suit -- and Thursday's ruling -- could add to the
questions being raised by critics about Mr. Trump's willingness to
weigh in on government business.
In a recent statement, Amazon said that "President 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 question is whether the president of the
United States should be allowed to use the budget of the DoD to
pursue his own personal and political ends."
The president called last summer for an investigation of the
Pentagon contract, before the award.
"I'm getting tremendous complaints about the contract with the
Pentagon and Amazon," Mr. Trump said at the time. "I will be asking
them to look very closely to see what's going on."
Mr. Trump also issued tweets in which he complained about the
process. The White House didn't respond to a request to comment
Amazon's complaint also cites a passage of a recent book by a
former speechwriter for then-Defense Secretary Jim Mattis.
Author Guy Snodgrass wrote in the book, "Holding the Line," that
Mr. Trump directed Mr. Mattis to "screw Amazon" out of the JEDI
contract by blocking its chance to bid on the deal. "Mattis
demurred," he said.
Steven Schooner, a George Washington University law professor,
said the judge's ruling on Thursday is unusual and could bode well
for Amazon's prospects.
"What is particularly significant is that...the court is
signaling that it is more likely than not that the plaintiff --
here, Amazon -- has pled a case in which it appears to be entitled
to a remedy and may ultimately prevail on the merits," Mr. Schooner
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.
The Defense Department recently filed a motion to dismiss
several of Amazon's claims concerning Mr. Trump's alleged
interference, contending that the company had waited too long to
Amazon didn't respond to a request to comment on Thursday.
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," Microsoft spokesman Frank X. Shaw said.
Development of the JEDI contract began in earnest in 2017
following a visit to Seattle and Silicon Valley by Mr. Mattis, who
met with Mr. Bezos among others on the trip. As the JEDI proposal
took shape, some potential bidders for the contract, including
Oracle Corp., began to complain the contract was tailored
specifically for Amazon.
Oracle executives and others also began digging into financial
and other connections between Amazon and several then-Pentagon
officials who had some involvement in various aspects of the
Defense officials ultimately sided with Amazon, concluding the
ties didn't affect the integrity of the procurement.
But the Pentagon ultimately ruled that Microsoft was more
qualified for the job. Amazon eventually filed suit to block the
contract in the U.S. Court of Federal Claims.
Joshua Schwartz, a co-director of George Washington University's
government procurement law program, said Amazon still faces an
uphill climb in its efforts to depose Mr. Trump.
But he said Amazon's complaint of undue political influence
could lead the court to pay more attention to the company's
separate allegations that the Pentagon unfairly changed some of its
criteria for deciding the JEDI award.
Mr. Schwartz said the department might have been wiser to start
the process over instead.
While companies often contest contract awards by the Pentagon
and other government departments, it is rare that they then sue or
secure a reversal of the initial decision, according to two lawyers
not involved in this case.
A 2018 study by Rand Corp, a think tank, said courts had changed
the previous decision in less than 10% of previous contested
The last big case involving the Pentagon saw Elon Musk's SpaceX
unsuccessfully challenge a longstanding contract award to a joint
venture between Boeing Co. and Lockheed Martin Corp. for military
space rocket launches.
Doug Cameron contributed to this article.
Write to John D. McKinnon at firstname.lastname@example.org
(END) Dow Jones Newswires
February 14, 2020 02:47 ET (07:47 GMT)
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