AMZN Amazon.com Inc

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 (September 5, 2020).

WASHINGTON -- The Defense Department reaffirmed Friday its award of a multibillion-dollar cloud computing contract to Microsoft Corp., in another setback for Amazon.com Inc.

Amazon unexpectedly lost its bid last year for the project, known as Joint Enterprise Defense Infrastructure, or JEDI, and filed a bid-protest case alleging that the Pentagon improperly decided the award and considered improper factors, including political influence.

A federal judge in April stayed Amazon's bid-protest case while the Pentagon weighed changes to the project that could address some of Amazon's objections.

In a short statement, the Pentagon said it had "completed its comprehensive re-evaluation of the JEDI Cloud proposals and determined that Microsoft's proposal continues to represent the best value to the Government."

The statement added that work on the contract won't begin immediately because of the court order staying implementation.

Microsoft applauded the Pentagon's decision and said in a statement that it was "ready to get to work and make sure that those who serve our country have access to this much needed technology."

Amazon said in a statement that the Pentagon had intentionally ignored "the clear cost benefits" of its bid and that it would "continue to pursue a fair and impartial review, and ensure our country gets the best possible technical capability to protect itself."

In response to Amazon's bid protest, the Defense Department proposed a so-called remand of the project that would allow the Pentagon to reconsider certain aspects.

The Pentagon's review was expected to focus on certain pricing issues that Amazon said were applied unfairly, according to court filings.

Amazon had objected to the Pentagon's proposed remand, arguing that the Pentagon's reconsideration of the project should be much broader. Amazon contended that the Defense Department's proposed remand amounted to a "do-over" to help Microsoft preserve its win in the face of Amazon's protest.

Amazon was originally regarded as the favorite to win the JEDI contract, which is estimated to be worth as much as $10 billion over a decade.

Amazon contended in its bid protest that the Pentagon unfairly evaluated the two tech companies' proposals and that the process was influenced by President Trump's public criticisms of the JEDI project, Amazon itself and founder Jeff Bezos.

Mr. Trump has blamed Mr. 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.

Earlier this year the Defense Department inspector general issued a long-awaited report on the JEDI project that largely dismissed objections to the project from several disappointed bidders, including Amazon.

Write to John D. McKinnon at john.mckinnon@wsj.com

(END) Dow Jones Newswires

September 05, 2020 02:47 ET (06:47 GMT)

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