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Pentagon pulls the plug on controversial Trump-era ‘JEDI’ contract



As a rule, federal contracting disputes don’t serve as great click-bait, but yesterday marked the end of an interesting Trump-era controversy. NBC News reported:

The Department of Defense announced Tuesday it’s calling off the $10 billion cloud contract that was the subject of a legal battle involving Amazon and Microsoft. The JEDI, or Joint Enterprise Defense Infrastructure, deal has become one of the most tangled contracts for the Department of Defense. In a press release Tuesday, the Pentagon said that “due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer meets its needs.”

For those who may need a refresher, let’s back up and revisit our earlier coverage to review how we arrived at this point.

Early on in Donald Trump’s term, Axios spoke to five sources close to the White House who said the Republican was eager to “go after” Amazon and its CEO, Jeff Bezos. Referring to Trump, one source said at the time, “He’s obsessed with Amazon. Obsessed.” The article added, “The president would love to clip CEO Jeff Bezos’ wings.”

It was against this backdrop that the Pentagon was reportedly prepared to announce a decision on the JEDI contract, at which point Trump announced that he was looking “very seriously” at intervening in the contracting process because unnamed people had told him “it wasn’t competitively bid.”

Even at the time, the comments were odd: There was a competitive bidding process, and no company had secured the contract.

Nevertheless, on the heels of the then-president’s comments, then-Defense Secretary Mark Esper said he intended to review the contract. According to a Washington Post report, the Pentagon chief’s reexamination was the result of White House instructions and “11th-hour Oval Office intervention.” There were “concerns” in the West Wing, the article added, that the lucrative contract “would go to Amazon.”

Soon after, the contract went to Microsoft. Amazon sued, claiming that the Trump White House interfered with the contracting process for petty, political reasons. The online retailer bolstered the argument by citing Trump’s own rhetoric: the initial court filing noted a Fox News segment, which Trump promoted via Twitter, that criticized the JEDI contract as the “Bezos bailout.”

The Pentagon’s inspector general took a closer look at what transpired but conceded that the Trump White House chose not to cooperate with the review. Imagine that.

That controversy now appears to have run its course, but the corporate competition will continue. From the NBC News report:

The Pentagon said in the press release that it still needs enterprise-scale cloud capability and announced a new multi-vendor contract known as the Joint Warfighter Cloud Capability. The agency said it plans to solicit proposals from both Amazon and Microsoft for the contract, adding that they are the only cloud service providers that can meet its needs. But, it added, it will continue to do market research to see if others could also meet its specifications.

The industry and its leaders can take some solace in the fact that the current U.S. president won’t have a political ax to grind against any of the companies or its executives.

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