In a new legal filing Monday, Amazon claimed President Donald Trump's "repeated public and behind-the-scenes attacks" led the Pentagon to choose a lesser bid from Microsoft for a lucrative cloud computing contract.
The ecommerce giant's protest of the $10 billion, 10-year contract, a redacted version of which was unsealed Monday morning, alleged that Trump's stated efforts to "screw Amazon" led the agency to opt for a proposal from Microsoft with "clear failures."
"Basic justice requires reevaluation of proposals and a new award decision," Amazon wrote. "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 founder Jeff Bezos also owns The Washington Post.)
The filing cited direct intervention from Trump in early August. At the time, Amazon alleged that Trump directed the new Defense Secretary Mark Esper "to conduct an 'independent' examination" of the cloud-contract award, citing several news articles."
"President Trump's improper direct intervention, its upending of the procurement, and the President's personal goal of preventing AWS from receiving the JEDI Contract were widely reported at the time," Amazon's filing alleges.
The JEDI contract, which stands for Joint Enterprise Defense Infrastructure, was awarded to Microsoft on Oct. 25 after more than a year of speculation that Amazon was the only capable bidder.
Whether or not a high-level intervention by Trump caused Amazon to lose the award is at the center of Amazon's attempts to wrestle the award out of Microsoft's hands. In recent weeks Amazon executives have repeatedly referenced "unmistakable bias" and "political influence" in relation to Trump's role in JEDI. Defense Department spokespersons have repeatedly said Trump did not "order" Esper to award the contract to any particular bidder, arguing the process was conducted in accordance with procurement law.
The e-commerce giant formally filed its protest in the U.S. Court of Federal Claims on Nov. 8. Amazon is seeking a declaration from the court that the award was 'arbitrary and capricious' or otherwise not in accordance with the law, according to a conference call made public this week. The company also seeks a permanent injunction preventing the award from moving forward with Microsoft, and a directive that would force the Defense Department to start the bidding process over.
Microsoft didn't immediately respond to a request for comment.
Since it filed suit, the company has openly criticized how the process was handled. In comments at an Amazon Web Services conference in Las Vegas this week, AWS chief executive Andy Jassy said an objective procurement process could not have arrived at Microsoft, arguing that AWS' technical capabilities more advanced by far.
"If you do a truly objective, detailed, apples-to-apples comparison with the platforms, you don't end up in a spot where the decision was made," Jassy said of the comparison between Amazon Web Services and Microsoft's cloud offering, known as Azure.
"You ended up with a situation where there was significant political interference," he said, "when you have a sitting president who is willing to share openly his disdain for a company and the leader of that company, it makes it really difficult for government agencies, including the Defense Department, to make an objective decision without fear of reprisal. I think it's really risky for the country and for democracy."
Amazon Web Services pioneered the prevailing model of commercial cloud computing, in which businesses rent computing power and storage from Amazon rather than operate their own servers. Competitors including Microsoft, IBM, Google and Oracle have since spun out cloud products of their own. But AWS still leads the market by a long shot. It holds a 48 percent market share, according to the market research firm Gartner, far ahead of Microsoft's 15.5 percent.
It also has a head-start in the national security sector thanks to an earlier $600 million contract that made it the primary cloud provider for the CIA. That contract - which effectively subsidized its development of advanced cybersecurity capabilities needed to protect classified data - made it the only cloud provider that holds the Defense Department's highest-level cloud computing certification, known as Impact Level 6. Microsoft's certification is one level below that.
The JEDI contract could be worth up to $10 billion over ten years. It is meant to create a powerful, centralized computing system for military agencies to build new systems on top of. Defense Department chief information officer Dana Deasy, who managed JP Morgan's networks in his last job, said JEDI will help do away with the Pentagon's current fragmented, haphazard approach to holding secret data.
The contract immediately became a competitive lightning-rod within the commercial cloud computing industry thanks to a Pentagon decision to award it to just one provider. Although JEDI will not be the Pentagon's only cloud, it will be its largest by far. And because it will effectively become the Defense Department's primary cloud computing operating system for so-called "tactical edge" devices - connected technologies designed to operate in far-flung war zones - it could give Microsoft a degree of influence over the direction the Pentagon's cloud-based technology moving forward.
The surprise award to Microsoft follows more than a year of fierce lobbying by Amazon's competitors, culminating in a high-level intervention by president Trump.
Amazon's complaint is the fourth legal change to the Pentagon's JEDI approach since the project was announced early last year. Throughout all of it, the Defense Department has refused to walk back its decision to award JEDI to a single company.
Oracle and IBM separately challenged the Defense Department's single-provider approach with the Government Accountability Office last year before awards were even submitted. After both of those protests failed to block the procurement, Oracle, assuming the award would go to Amazon, brought new allegations that Amazon had fixed the process for itself through a series of inappropriate relationships with Defense officials. Those conflicts are now the subject of a not-yet-released investigation by Defense Department's the Inspector General.
Court of Federal Claims Judge Eric Bruggink issued a ruling in late July that rejected Oracle's accusations and cleared Amazon of the 'organizational conflict of interest' that could have excluded it from the competition. Oracle's case is now under appeal.
Bruggink has declined to preside over the current case because of an unspecified conflict, attorneys involved in the case said in a recent conference call. Bruggink owns some Microsoft stock, according to a disclosure form reviewed by the Washington Post. The American Bar Association's judicial cannon holds that a judge should disqualify himself when "the judge's impartiality might reasonably be questioned." The cannon further specifies this to include cases in which the judge "has a financial interest in the subject matter in controversy or in a party to the proceeding."
None of those legal challenges succeeded in halting the award. They did, however, manage to delay it for more than a year as defense officials' time was occupied responding to litigation.
Throughout its litigation Oracle was been criticized for its role in delaying what officials have described as a crucial national security priority. Some of that criticism came from Amazon.
"It is kind of a status quo in government that everything gets protested," AWS public sector vice president Theresa Carlson said at a recent conference, adding: "which is kind of sad, because it delays innovation." (Carlson's comments came before her company filed its own bid protest)
The procurement took an unexpected turn in late July when Trump asked Defense Secretary Mark Esper to reexamine the Pentagon's approach to JEDI, citing concerns that the contract would go to Amazon, people familiar with the matter told the Post at the time. The directive came soon after he said in a televised news conference that he had received "tremendous complaints" about the contract from Amazon's competitors, citing Microsoft, Oracle and IBM. Soon afterward, the President retweeted a link to a Fox News segment that referred to JEDI as the "Bezos bailout."
The Post and CNN reported at the time a colorful flow chart depicting Defense officials and various Bezos-linked individuals landed on the president's desk. The flowchart had originated from Oracle's D.C. lobbying shop.
Around that time Sen. Marco Rubio, R-Fla., whose campaign has received donations from Oracle co-founder Larry Ellison, asked that the contract be delayed in separate letters to the Pentagon and the White House. Rubio lobbied the president directly on the matter and spoke with Trump about it by phone, a member of his staff told the Post.
A book by a retired Navy Cmdr. Guy Snodgrass, who worked as a speechwriter for former defense secretary Jim Mattis, noted that Trump had sought to "screw" Amazon out of the contract and that Mattis had demurred. Snodgrass' claims have not been independently verified.
The Defense Department also faces unresolved questions about a surprise decision by Esper to recuse himself from the procurement process just days before the award. In statements to the press on the matter, Defense Department spokespersons have said Esper recused himself because his son works for one of the initial bidders, but have not offered an explanation for why he waited more than two months to recuse himself.
Aside from its complaint Amazon submitted four videos as evidence. They were submitted on a CD-Rom even though they all exist on the internet without a paywall.
In four videos Amazon provided to the court on a CD-Rom showing Trump's thoughts on the matter. The first is a February, 2016 campaign rally in which then candidate Donald J. Trump said Amazon would "have problems" if he were elected, citing Bezos' ownership of the Washington Post. The second is a televised news conference from July 18, in which Trump said he would direct aides to investigate Amazon's role in the JEDI procurement. The fourth is the Fox News segment that referred to JEDI as the "Bezos Bailout."
The fourth piece of video evidence buttressing Amazon's complaint is footage from CIO Deasy's October hearing. In the hearing, Deasy has argued that there is a two-tracked process in which Esper's review of JEDI's overall approach was separate from the team that was responsible for reviewing bids. He said the source selection team had made the decision to award the contract to JEDI and that, to his knowledge, they had not been contacted by the White House.