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Amazon Accuses Trump of ‘Improper Pressure’ on JEDI Contract


SAN FRANCISCO — Amazon said in a legal complaint unsealed on Monday that it had lost a $10 billion cloud computing contract with the Pentagon because President Trump used “improper pressure” to divert the contract from the company to harm its chief executive, Jeff Bezos.

The Defense Department reviewed outdated submissions from the company and overlooked key technical abilities, Amazon claimed, saying those errors tipped the scale in favor of Microsoft, which won the contract in October.

Amazon had been considered the front-runner for the Joint Enterprise Defense Infrastructure project, known as JEDI, in part because it had built cloud services for the Central Intelligence Agency. Also, its Amazon Web Services business, known as AWS, is the country’s biggest cloud computing provider.

But Mr. Trump said publicly that other “great companies” should have a chance at the contract. He said he would take “a very strong look” at the JEDI contract, noting that companies including Microsoft, IBM and Oracle had complained about the award process.

The Defense Department rejected the idea that Mr. Trump had meddled in the contracting process.

“This source 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 D.O.D.’s normal source-selection process,” said Elissa Smith, a spokeswoman for the Defense Department. “There were no external influences on the source selection decision.”

Janelle Poole, a spokeswoman for Microsoft, said: “We have confidence in the qualified staff at the Department of Defense, and we believe the facts will show they ran a detailed, thorough and fair process in determining the needs of the warfighter were best met by Microsoft.”

JEDI was formally opened to bids in July 2018. The project was designed to modernize the military, from the Pentagon out to the battlefield, by adding more security, connectivity and artificial intelligence to the nation’s arsenal. Because of the complexity of the work and the prestige of the client, it was considered the most important contract the cloud computing industry had seen to date.

Amazon did not detail new instances of Mr. Trump’s direct involvement in the process. The company relied on his public statements and Twitter posts, as well as those of his son Donald Trump Jr., and private comments reported in the press. Amazon argued that the president’s disdain for Amazon and Mr. Bezos was plain for everyone to see, including people directly involved in the procurement.

Amazon cited Mr. Trump’s removal of Jim Mattis as defense secretary as an example of direct interference in the JEDI decision. Mr. Trump directed Mr. Mattis’s replacement, Mark Esper, to review the JEDI bidding process. Mr. Esper had said he would conduct an independent review.

A speechwriter for Mr. Mattis said in a book published several weeks ago that Mr. Trump had wanted to give the contract to a company other than Amazon.

Amazon’s complaint said the Pentagon had begun preparing to award the contract to Microsoft on Oct. 17. But on Oct. 22, Mr. Esper said he was recusing himself from the process because his son worked for IBM, which had bid on the contract and been rejected.

The Defense Department announced a few days later that the JEDI contract would go to Microsoft.

Under pressure from Mr. Trump, the Pentagon “departed from the rules of procurement and complied — consciously or subconsciously — with its commander in chief’s expressed desire to reject AWS’s superior bid,” Amazon said in its complaint.

The company also said the Defense Department required Amazon to build new classified data centers to handle its material, rather than letting the company use its existing data centers that have been approved for classified use. This change, which Amazon said had come at “the 11th hour,” drove up the cost of its bid for the contract.

Amazon’s legal team includes Theodore B. Olson, a former solicitor general of the United States, who is now at the law firm Gibson, Dunn & Crutcher.

Microsoft’s victory in the contracting process has the potential to reshape the cloud computing industry, which Amazon dominates.

On Saturday, Mr. Bezos spoke at the Reagan National Defense Forum, an event to discuss the nation’s defenses, and reaffirmed Amazon’s commitment to working with the military. Workers at other large tech companies, such as Google, have protested their technology’s use in weaponry.

“My view is, if Big Tech is going to turn their backs on the Department of Defense, this country is in trouble. That just can’t happen,” Mr. Bezos said.

Karen Weise contributed reporting.





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