Amazon Blames Trump for Loss of $10 Billion Pentagon Deal

Amazon

In late October, the Department of Defense surprised investment markets with its announcement that it had awarded Microsoft Corp. a $10 billion contract to provide its Joint Enterprise Defense Infrastructure (JEDI) cloud computing network.

The contract was initially believed to be headed towards Amazon Inc., the largest cloud services provider in the world.

When Microsoft won the contract, Amazon was as surprised as investors and analysts. The company immediately vowed to fight the decision. In a newly unsealed lawsuit, Amazon has detailed how it believes the JEDI contract was illegally awarded to Microsoft.

Amazon Files Case with U.S. Court of Federal Claims

The Pentagon has denied any wrongdoing in selecting Microsoft for its multi-billion-dollar cloud infrastructure contract. On Monday, spokeswoman Elissa Smith said that the Department of Defense only selected Microsoft after all bids were considered by “an expert team of career public servants and military officers.” The Pentagon claimed that there was no external influence in their decision.

In Amazon’s legal filings, it says that the bidding process should be revisited because there were “substantial and pervasive errors” made. President Trump has been a frequent critic of CEO Jeff Bezos and his companies. Amazon says that it lost the deal because of a “personal vendetta against Mr. Bezos, Amazon, and the Washington Post.”

The lawsuit states that “Basic justice requires reevaluation of proposals and a new award decision. 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 says that its services were better suited to the JEDI project. The company argued that its network and hardware speed, as well as its experience in handling classified data through other projects, should have given it an advantage in the procurement process.

Lawsuit Won’t Delay JEDI Project

Despite the ongoing lawsuit, the Pentagon has said that work on the JEDI project will not be delayed. Microsoft is moving ahead with consulting and deployment.

Microsoft has been a long-time government contractor and arguably has more experience with the Pentagon than Amazon does. Microsoft’s Azure cloud platform is not as popular as Amazon’s offering, but many technical experts would argue that it is comparable and, in some ways, comes ahead.

Did President Trump unfairly influence the process? At this time, there’s no direct evidence to say that he did, but this will be an important story for investors to follow in the coming weeks.

 

The reports, research and newsletter are based on current and historical market data, as well as publicly available financial data.They are intended to be a starting point for investors. They do not provide every material fact about a company or industry, nor are they recommendations to buy or sell. The writers and the company make no warranties or representations as to the accuracy of these reports.   You should NOT rely solely upon the information or opinions read in the content. Rather, you should use the content as a starting point for doing independent research on the independent analysis and trading methods in the content. The content is impersonal and does not provide individualized advice or recommendations for any specific reader or individual portfolio. By accessing this website you have agreed to our disclaimers and privacy policy.

 

 

The reports, research and newsletter are based on current and historical market data, as well as publicly available financial data.They are intended to be a starting point for investors. They do not provide every material fact about a company or industry, nor are they recommendations to buy or sell. The writers and the company make no warranties or representations as to the accuracy of these reports.   You should NOT rely solely upon the information or opinions read in the content. Rather, you should use the content as a starting point for doing independent research on the independent analysis and trading methods in the content. The content is impersonal and does not provide individualized advice or recommendations for any specific reader or individual portfolio. By accessing this website you have agreed to our disclaimers and privacy policy.

 

You May Also Like