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Amazon blames Trump’s ‘improper pressure’ for losing $10 billion Pentagon contract

The Joint Enterprise Defense Infrastructure plan was the $10 billion military computing project that was eventually awarded to Microsoft

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By Associated Press


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Amazon CEO Jeff Bezos.

Amazon /zigman2/quotes/210331248/composite AMZN +1.10%   says President Donald Trump’s “improper pressure” and behind-the-scenes attacks harmed its chances of winning a $10 billion Pentagon contract.

The Pentagon awarded the cloud computing contract to Microsoft /zigman2/quotes/207732364/composite MSFT -0.08%   in October.

Amazon argues in a lawsuit unsealed Monday in the U.S. Court of Federal Claims that the decision should be revisited because of “substantial and pervasive errors” and Trump’s interference.

Amazon and its founder Jeff Bezos have been a frequent target of Trump, even before he became president. Bezos personally owns The Washington Post, which Trump has referred to as “fake news” whenever unfavorable stories are published about him.

Amazon said it lost the deal due to Trump’s “personal vendetta against Mr. Bezos, Amazon, and the Washington Post.”

Pentagon spokeswoman Elissa Smith said in a statement Monday the decision to select Microsoft “was made by an expert team of career public servants and military officers” and without external influence.

Formally called the Joint Enterprise Defense Infrastructure plan, or JEDI, the military’s computing project would store and process vast amounts of classified data. The Defense Department has said it will help speed up its war planning and fighting capabilities and enable the military to advance its use of artificial intelligence.

Amazon and Microsoft became the finalists after Oracle and IBM were eliminated in an earlier round of the contract competition. Oracle had also sued, arguing the bidding was rigged in Amazon’s favor. Trump publicly waded into the bidding process over the summer, saying he heard complaints and wanted the Pentagon to take a closer look.

“The department is confident in the JEDI award and remains focused on getting this critical capability into the hands of our warfighters as quickly and efficiently as possible,” Smith said.

The White House didn’t immediately return an emailed request for comment Monday. Microsoft also didn’t immediately return a request for comment but is intervening in the court case to defend its contract win.

Amazon makes the case in the lawsuit that its cloud services were a better fit for the project because of its speed, efficiency and experience securely handling classified government data. It says the Defense Department made errors in the procurement process that make little sense without taking into account Trump’s antipathy toward Amazon. Some of the lawsuit’s details are redacted for proprietary or security reasons.

“Basic justice requires reevaluation of proposals and a new award decision,” the lawsuit says. “The stakes are high. The question is whether the President of the United States should be allowed to use the budget of DoD to pursue his own personal and political ends.”

Amazon Web Services has been the industry leader in moving businesses and other institutions onto its cloud — a term used to describe banks of servers in remote data centers that can be accessed from almost anywhere. But Microsoft’s Azure cloud platform has been steadily catching up, as have other providers such as Google, in both corporate and government settings.

Mike Hettinger, a tech industry lobbyist focused on federal contracting, said a strong case could have been made for either Amazon or Microsoft winning the contract but it is hard for an outside observer to know what went into the government’s technical evaluations and whether Trump’s comments or actions influenced the outcome. Amazon is likely to use the case to seek more internal documents from the government.

“I don’t think anybody knows what happened behind the scenes,” Hettinger said. “I think that’s what this lawsuit is intended to find out.”

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