Amazon sues Pentagon over $10bn Jedi contract

Complaint alleges ‘escalating and overt pressure’ from Trump denied firm contract

Amazon’s complaint alleges that the company’s cloud computing division AWS would have won the Jedi contract but for flaws in the procurement process. Photograph: Emmanuel Dunand/AFP via Getty Images

Amazon’s complaint alleges that the company’s cloud computing division AWS would have won the Jedi contract but for flaws in the procurement process. Photograph: Emmanuel Dunand/AFP via Getty Images

 

Amazon was denied a $10 billion US defence contract because of “escalating and overt pressure” from President Donald Trump designed to hurt the company’s chief executive, Jeff Bezos, the company claimed in a lawsuit.

The tension between the two men, which stems from Mr Trump’s hostility towards the Bezos-owned Washington Post media group, took on a legal dimension with a court filing in which Amazon claimed the president improperly leaned on officials at the department of defence. The department later awarded the so-called Jedi contract to a rival bid from Microsoft.

The complaint, filed in federal court in Washington on November 22nd but made public on Monday, alleged Amazon’s cloud computing division AWS would have won the contract but for flaws in the procurement process. It claimed the flaws could be explained by the president’s vendetta.

“These errors . . . were not merely the result of arbitrary and capricious decision making,” the company said in the filing. Mr Trump launched “repeated public and behind-the-scenes attacks to steer the Jedi contract away from AWS to harm his perceived political enemy”.

The president has regularly clashed with Amazon and Mr Bezos, not least over coverage of Mr Trump in the Washington Post, which the Amazon founder has owned since 2013.

In October, the Pentagon picked Microsoft to run the Jedi project, which allows the company to handle some of the US military’s most sensitive data and communications in the cloud.

Encrypt data

Many experts had expected the contract to go to Amazon, which is the only company able to encrypt data to the “top secret” level the military requires.

Microsoft and Amazon were the only technology companies to be shortlisted and the bidding process had already triggered one legal challenge, from Oracle, one of the unsuccessful bidders.

Just weeks before the contract was due to be announced, Mr Trump warned “great companies” had complained about the process. His words were interpreted as an attack on Amazon, as he named Oracle, IBM and Microsoft – the other three bidders – as the complainants.

A spokesperson for the defence department said the contract decision was made by career public servants and military officers in accordance with the department of defence’s normal processes.

“There were no external influences on the source selection decision,” the spokesperson said. “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.”

The White House did not respond to a request to comment.

As President Trump continued to tweet and speak about Mr Bezos and Amazon, the company alleged that the Pentagon made a series of decisions to ignore key elements of Amazon’s Jedi bid.

The complaint claimed Mr Trump’s public fights with Amazon and its chief executive were enough to weigh on the Pentagon’s decision “consciously or subconsciously”.

A former Pentagon official’s book, released this year, claimed Mr Trump wanted to “screw” Amazon by denying it the Jedi contract – something Amazon explicitly referenced in its lawsuit.

The complaint said the defence department’s “substantial and pervasive errors” were “hard to understand and impossible to assess separate and apart from the president’s repeatedly expressed determination to, in the words of the president himself, ‘screw Amazon’.” – Copyright The Financial Times Limited 2019