Amazon is headed for court to contest the surprise decision to hand Microsoft the $10bn US Department of Defense JEDI IT supply contract.
Jeff Bezos' retail-cum-cloud empire alleges that Microsoft won because of "political influence" and "unmistakable bias". The company has also accused the US defence department of failing to run a fair procurement contest for the 10-year single-supplier deal.
Amazon's cloud biz, AWS, was perceived for a long time as the frontrunner in the race to win the Joint Enterprise Defense Infrastructure (JEDI) contract, ahead of Microsoft and Oracle. However, US president Donald Trump's long list of supposed enemies includes the Amazon CEO, mainly because he objects to coverage of the presidency by the Bezos-owned Washington Post.
The cloud giant has not yet filed papers in court, but has informed the US government and Microsoft of its intention to do so.
We got the following statement from Amazon:
AWS is uniquely experienced and qualified to provide the critical technology the US military needs, and remains committed to supporting the DoD's modernization efforts. We also believe it's critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence. Numerous aspects of the JEDI evaluation process contained clear deficiencies, errors, and unmistakable bias – and it's important that these matters be examined and rectified.
Under the massive contract, one company will shift the Pentagon to cloud-based platforms as part of the DoD Digital Modernization Strategy.
The JEDI deal has been dogged by difficulties. Observers complained that insisting on a single supplier for a contract of this scale effectively made it a two-horse race from the start given the security requirements and scale of services needed.
Oracle accused AWS of a variety of dodgy practices in order to tilt the competition in its favour.
And then late in the day Trump woke up to the fact that the deal was likely going to someone he's not fond of.
The prez claimed in his trademark style: "We're getting tremendous complaints from other companies. Some of the greatest companies in the world are complaining about it."
This led the the Department of Defense to re-examine how the competition was run.
A week before the winner was announced, US Secretary of Defence Mark Esper recused himself from the process because his son was working for one of the original bidders, IBM.
Responding to Amazon's announcement yesterday, Esper told a news conference in South Korea that he rejected any suggestion of bias in the Pentagon decision.
Oracle took repeated court action when it was ousted from the competition.
Big Red has a cosy relationship with the Trump administration. Co-CEO Safra Catz served on the transition team and was rumoured to be considered for treasury secretary.
Microsoft declined to comment.
One question still to be answered is: what will last longer and prove the most expensive? The 10-year, $10bn JEDI contract or the associated court action? ®