Another Hurdle For JEDI Project -- WSJ
March 14 2020 - 3:02AM
Dow Jones News
By John D. McKinnon
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 14, 2020).
WASHINGTON -- The Pentagon's star-crossed JEDI cloud-computing
project has taken yet another turn, raising the potential for
further delays.
A federal judge has already halted work on the Joint Enterprise
Defense Infrastructure over allegations of contract irregularities.
Now the Pentagon is seeking a halt to court proceedings, saying it
wants time to rethink some aspects of the project.
The Pentagon awarded the contract, expected to be worth up to
$10 billion over a decade, to Microsoft Corp. -- triggering a
lawsuit challenging the decision by rival bidder Amazon.com
Inc.
The Pentagon's move to pause the court proceedings opens the
door to possible changes in the deal.
But lawyers for rival Amazon.com Inc. plan to oppose the move,
according to court documents filed this week by the Department of
Defense as part of its move to pause court proceedings. Amazon is
worried that it might ultimately serve only to allow the Pentagon
to shore up its case for letting Microsoft proceed with the
contract, worth up to $10 billion over a decade.
Amazon said it was pleased by what it said was the Defense
Department's acknowledgment that the contracting process was
flawed.
"We look forward to complete, fair and effective corrective
action that fully insulates the re-evaluation from political
influence and corrects the many issues affecting the initial flawed
award," an Amazon spokesman said.
Meanwhile, the Pentagon's proposed reconsideration of parts of
the contract represents the latest in a series of complications and
delays for the controversial JEDI project, which has been in
development since at least 2017.
Amazon's cloud unit, Amazon Web Services, or AWS, was long
considered the favorite to win the huge contract, but lost out to
Microsoft in a decision that Amazon contends was tainted by
political influence from President Trump.
In response to Amazon's bid protest, a judge of the U.S. Court
of Federal Claims decided last month to halt work on the massive
project.
Judge Patricia Campbell-Smith said that Amazon was likely to
prevail on one of its arguments -- that the Pentagon had improperly
evaluated the two companies' price proposals for certain
information storage, giving Microsoft an unfair advantage.
AWS is expected to file a response explaining what it says is
its concern that the re-evaluation may not adequately address all
of the other errors, bias and deficiencies it has raised.
In contrast, Microsoft lawyers said they would not oppose the
Pentagon's proposal, according to the Defense Department
motion.
"We believe the Department of Defense made the correct decision
when they awarded the contract," said Microsoft spokesman Frank
Shaw.
"However, we support their decision to reconsider a small number
of factors as it is likely the fastest way to resolve all issues
and quickly provide the needed modern technology to people across
our armed forces."
The Pentagon said it disagreed with the court's decision last
month, but that it must "address the findings in the court's order
with the intent of ensuring our warfighters will get this urgent
and critically needed technology as quickly and efficiently as
possible"
The Pentagon says the contract award was fairly determined.
In addition to the complaint over the disputed pricing factor,
Amazon's complaint alleges a number of technical errors by the
Pentagon in considering the two firms' bids.
Mr. Trump has blamed Amazon founder Jeff Bezos for unfavorable
coverage of his administration in the Washington Post, which Mr.
Bezos bought in 2013. The Post says its editorial decisions are
independent.
Another frustrated bidder, Oracle Corp., had alleged before the
award that Amazon benefited from conflicts of interest among some
Pentagon officials that worked on the deal. The Pentagon as well as
another Federal Claims Court judge concluded that those alleged
issues had no material impact on the outcome. But some of the
issues remain under investigation by the Pentagon's inspector
general.
(END) Dow Jones Newswires
March 14, 2020 02:47 ET (06:47 GMT)
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