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Pentagon IG says giant cloud computing contract properly went to Microsoft

But inspector general said he could not "definitively determine" if White House unduly influenced the selection

Amazon CEO Jeff Bezos, center, is pictured in the Capitol in 2016.  His company has sued to protest the awarding of a Pentagon computing contract to rival Microsoft.
Amazon CEO Jeff Bezos, center, is pictured in the Capitol in 2016. His company has sued to protest the awarding of a Pentagon computing contract to rival Microsoft. (Tom Williams/CQ Roll Call file photo)

A top Pentagon watchdog said Wednesday that the Defense Department acted properly when it awarded a potential $10 billion contract for cloud computing to Microsoft over Amazon and other competitors.

The contract is known in Pentagon circles as the JEDI — the Joint Enterprise Defense Infrastructure Cloud, or JEDI Cloud.

The Defense Department Inspector General released a 313-page report summarizing the findings of the 10-month investigation that began in June 2019. The report concluded that the Pentagon’s October 2019 decision to award the contract to Microsoft and no other contractors was “consistent with applicable law and acquisition standards.”

The contract, which is potentially worth up to $10 billion over a 10-year period, allows the Defense Department to obtain cloud computing services and overhaul its old computer systems. 

However, the report did not provide an unvarnished exoneration of the procurement process. Amazon accused President Donald Trump in December last year of applying “improper pressure” on the Pentagon to keep the contract away from Amazon Web Services, and the inspector general’s office concluded that it could not “definitively determine the full extent or nature” of any White House influence on the contract process.

Amazon was previously considered to be a favorite for the contract, but according to a New York Times story from August 2019, “aggressive” lobbying by rival firm Oracle helped to derail its chances, as did Trump’s well documented animosity toward Amazon CEO Jeff Bezos. 

Bezos also owns The Washington Post, which the president has frequently accused of incorrect and biased reporting on his administration, as he has of many media outlets. 

[On cloud computing contract no Jedi contract tricks]

One allegation of undue influence provided in the report cites a book by a former staffer for then-Defense Secretary James Mattis, which said that the president explicitly requested that Mattis “screw Amazon” out of the contract in 2018.

Amazon has formally protested the contract award and launched a lawsuit to stop it. A federal judge in February halted work on the contract while the suit goes through the courts.

An Amazon Web Services spokesperson criticized the inspector general’s report, telling CQ Roll Call that the White House refused to cooperate with the investigation. “This report doesn’t tell us much. It says nothing about the merits of the award, which we know are highly questionable based on the [federal] judge’s recent statements and the government’s request to go back and take corrective action. And, it’s clear that this report couldn’t assess political interference because several DoD witnesses were instructed by the White House not to answer the IG’s questions about communications between the White House and DoD officials. The White House’s refusal to cooperate with the IG’s investigation is yet another blatant attempt to avoid a meaningful and transparent review of the JEDI contract award.”

Some ethical misconduct

The Pentagon OIG also found a handful of instances of misconduct in the procurement process, despite its conclusion that the contract was ultimately awarded lawfully.

The report said that the OIG “substantiated allegations of ethical misconduct” against two Pentagon officials: Deap Ubhi, who left the Defense Department in 2017 to join Amazon, and Stacy Cummings, the principal deputy assistant secretary of Defense for acquisition.

According to the report, however, neither of their ethical lapses rose to the level of affecting “the conduct or outcome of the JEDI Cloud source selection.”

You can read the full report here.

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