The US Defence Department has announced that it might reconsider the awarding of Microsoft Corp (NASDAQ:MSFT) the $10 billion cloud contract following protests from Amazon.com Inc. (NASDAQ:AMZN). Amazon had indicated that it lost following President Donald Trump’s interference.
DoD to re-evaluate award of JEDI contact
In a court filing, the department indicated that it would re-evaluate its decision to award the contract in response to technical issues identified by Amazon Web Services. Amazon had argued in a legal brief that the Pentagon incorrectly assessed its offerings and pricing. The Department of Justice requested the reconsideration, but the Department of Defence indicates that it will need 120 days to re-evaluate the process and will not have to engage Microsoft or AWS.
The contract in question is the Joint Enterprise Defense Infrastructure (JEDI) that involves the provision of cloud services for the storage of military data and technology. The contract is worth 410 billion and is expected to run over ten years.
Amazon, which is a cloud computing giants, was considers as the front runner to win the JEDI contract but surprisingly lost it to Microsoft’s Azure in October 2019. As a result, Amazon filed a lawsuit at the Court of Federal Claims seeking to overturn the awarding of the contract to Microsoft.
Move to award JEDI contract politically motivated
The company argued that the decision was politically-driven because of differences between Trump and Amazon founder Jeff Bezos who is also the owner of the Washington Post. Trump has been at loggerhead with the Washington Post because of its coverage of his administration. At the beginning of this month, the presiding judge on the case hinted that amazon was in a better position to overturn the decision based on the merits of the case.
In a statement, Amazon Spokesperson stated that the company was delighted that the Department of Defense was thinking of reconsidering its decision. He said that they had acknowledged legitimate and substantial issues that clouded the awarding of the JEDI contracts, and thus it was necessary to correct the same.