A legal victory for Amazon could effectively doom the Pentagon’s $10 billion “war cloud” initiative, defense officials told Congress in a stark memo Thursday that warned of a potentially bleak outcome in the bitter battle over one of the military’s most ambitious technology projects in decades.
The push to award the massive contract to consolidate much of the military’s scattered cloud computing services became a running soap opera in the Trump administration. Clashes with Amazon CEO Jeff Bezos, who also owns The Washington Post, could leave former President Donald Trump facing a legal deposition if Amazon’s challenge to losing the contract proceeds.
In the document first obtained Thursday by The Washington Times, Pentagon officials told lawmakers that they are bracing for a decision from the U.S. Court of Federal Claims in the next several weeks on key aspects of a legal challenge brought by Amazon Web Services. The company argues that it lost out on the 10-year Joint Enterprise Defense Infrastructure (JEDI) contract to Microsoft because of direct political interference by Mr. Trump.
Amazon’s internet services subsidiary had been widely seen as the clear favorite before the Defense Department announced Microsoft’s winning bid in October 2019.
A federal judge will rule on whether that allegation of improper interference, which the Defense Department vehemently denies, can remain a part of Amazon’s broader legal challenge. Amazon also claims that technical aspects of the Pentagon’s award process were deeply flawed.
If a judge allows the interference portion of the case to go forward, a lengthy, potentially ugly discovery process would follow and would force the federal government to turn over emails, memos and a trove of other documentation related to internal discussions about the JEDI contract.
It would also likely require depositions from Mr. Trump, former Defense Secretary James Mattis, former Defense Secretary Mark T. Esper and other top officials. The Pentagon says that outcome could spell the end of JEDI in its current form.
“This count will need to be substantively litigated and argument over other motions, in particular, a motion for discovery, which will include requests for depositions of senior officials at the White House and DoD, including former DoD and White House senior officials,” the memo reads in part. “These motions will be complex and elongate the timeline significantly.”
Lengthy legal delays, the memo added, “might bring the future of the JEDI Cloud procurement into question. Under this scenario, the DoD [chief information officer] would reassess the strategy going forward. Whatever the outcome, the department’s unsolved capability gaps would still remain for enterprise wide, commercial cloud services — at all three classification levels — stretching from the homefront to the tactical edge — at scale.”
The Pentagon memo to Congress also sketches out a world in which the court dismisses Amazon’s allegations of political interference. In that case, work on JEDI would remain paused until the court rules on all other aspects of Amazon’s challenge, but officials would expect a full resolution within just a few months.
The memo Thursday is the latest twist in a long-running political saga that carries deep implications for U.S. national security. While JEDI is not the Pentagon’s only cloud computing initiative, it is a massive “general purpose cloud,” that would hold information across all corners of the U.S. military worldwide.
The JEDI contract would cover the storage and processing of huge amounts of classified Pentagon data. Military insiders say the project is crucial for homeland defense and military operations abroad in the 21st century.
“Every day that goes by and the military doesn’t have this capability, you’re increasing the risk to the U.S. military,” said retired Army Lt. Gen. Thomas Spoehr, now director of the Center for National Defense at The Heritage Foundation.
“Everything you see the Department of Defense doing … kind of depends on this cloud service provider idea,” he told The Times in an interview. “The need, if anything, has only gotten greater in the last year or two.”
Microsoft has said it legitimately won the contract and is capable of performing all of the work required. Microsoft and Amazon also have traded claims over which company can do the work at a lower cost.
The $10 billion figure frequently used when describing JEDI is the absolute ceiling of the contract, and the actual value may never reach that level.
Since Microsoft’s surprise win in October 2019, Amazon has argued that the Pentagon acted at the indirect, or perhaps even explicit, urging of Mr. Trump.
Amazon Web Services “believes all of its protest grounds are timely and well-founded, and it’s important that the many evaluation errors and the political interference that impacted the JEDI award decision be reviewed,” the company said in a recent court filing.
The company points to what it says is clear evidence of Mr. Trump’s involvement. A top aide to Mr. Mattis, Guy Snodgrass, claimed in a recent book that Mr. Trump told Mr. Mattis to “screw Amazon” out of the award.
In July 2019, Mr. Trump spoke out publicly regarding the contract and the internal Pentagon process in unusually blunt terms for a sitting president.
“I’m getting tremendous complaints about the contract with the Pentagon and with Amazon. They’re saying it wasn’t competitively bid,” Mr. Trump said. “And I will be asking them to look at it very closely to see what’s going on because I have had very few things where there’s been such complaining.”
The Defense Department has steadfastly maintained that the White House did not interfere.
“The department remains confident in its award of the JEDI Cloud contract to Microsoft,” a defense official told The Times this week.
Ellen Lord, the Pentagon’s former undersecretary of defense for acquisition and sustainment, agreed.
“The president had a lot of interest on a few programs. I don’t think he influenced the programmatics,” she said last week, according to Defense News.
Numerous internal reviews of the contract award process have upheld the result. A Pentagon inspector general’s investigation found that the Defense Department followed proper procedures.
But Amazon and other critics say that investigation was fatally flawed because the government asserted “presidential communications privilege” and blocked interviews with top officials in the Pentagon and White House who were allegedly involved in the decision-making process.
Microsoft, meanwhile, has argued that Amazon is seeking a “do-over” after losing the contract fight fair and square.
“At the end of the day, putting the customer first is a good business strategy and one where Amazon has traditionally excelled,” Frank Shaw, Microsoft’s corporate vice president of communications, wrote in a blog post last year.
“In this case, I think about the customer not as a singular ‘DoD’ but as the individual soldier, sailor, airman or Marine who wants and deserves the very best tools to do their job. And the best way Amazon can put these customers first is to stand down on its litigation, stop asking for a do-over and let JEDI proceed.”