Federal partners could get caught in crossfire as AWS ups challenge to Microsoft winning $10 billion Pentagon contract
Amazon Web Services asked federal courts to halt all work on the $10 billion JEDI cloud computing contract awarded to Microsoft. Whether or not it gets an injunction, AWS’ efforts to win the massive Pentagon deal through legal measures will likely impact the sales and revenue of Microsoft federal partners.
The Lowdown: AWS wants the courts to order all work on JEDI — otherwise known as the “Joint Enterprise Defense Infrastructure” Cloud program — to stop until its challenge of the contract award is resolved. Microsoft is in the early phase of planning and preparing to work on the JEDI contract, which intends to unify the Department of Defense under a common cloud computing framework and infrastructure. Microsoft and the Pentagon agreed to pursue the “go-slow” approach until Feb. 11, giving AWS time to protest the contract award.
The Details: Amazon says it’s going to court to compel the government to follow established common practice of not implementing a contract until resolving all protests. Amazon believes government officials did not properly award the JEDI contract due to political pressure. A part of the protest rests on the ongoing feud between President Donald Trump and Amazon founder Jeff Bezos, who also owns The Washington Post — a newspaper critical of the Trump administration. Trump administration officials and the Pentagon deny that politics played any role in the process.
The Impact: Microsoft partners have high hopes that the massive JEDI project will lead to subcontracting work and complementary application sales. Further, Microsoft partners view the JEDI award as validation of the Azure cloud platform and ecosystems, which will lead to further contracts and sales down the line. The Amazon protest will slow down not just the JEDI project, but other supporting systems work. The protest, Microsoft partners fear, will delay or disrupt their federal revenue.
Background: In October 2019, the Pentagon handed the JEDI contract to Microsoft over rivals AWS and Oracle. Oracle was always seen as a long shot for the deal. AWS, though, was widely thought to have an edge given the size and maturity of its cloud computing business, existing contracts with the government and Department of Defense, and strong connections in Washington, D.C. Microsoft, however, has equally strong connections in political circles and deep penetration in government systems.
The Buzz: “It is common practice to stay contract performance while a protest is pending, and it’s important that the numerous evaluation errors and blatant political interference that impacted the JEDI award decision be reviewed,” said Amazon Web Services in a statement.