Amazon claims Trump pressured Pentagon to give Microsoft cloud computing contract

It's no secret that President Donald Trump is no fan of Amazon CEO Jeff Bezos or the Washington Post, which Bezos owns. Now, Amazon is suing the Department of Defense, claiming that the president's personal dislike pushed Pentagon officials to award a lucrative cloud-computing services contract to a rival, according to a lawsuit made public Monday.

"[T]he President of the United States and Commander in Chief of our military used his power to "screw Amazon" out of the JEDI Contract as part of his highly public personal vendetta against Mr. Bezos, Amazon, and the Washington Post," Amazon claimed in its lawsuit, referring to the project by its formal name, Joint Enterprise Defense Infrastructure, or JEDI. 

" Rarely, if ever, has a President engaged in such a blatant and sustained effort to direct the outcome of a government procurement-let alone because of personal animus and political objectives," Amazon said in the suit.

Amazon, Microsoft, Oracle and IBM all bid in 2017 to provide cloud-computing services to the Pentagon, a contract that could pull in $10 billion for the winner over the next decade.

Amazon Web Services is the leading provider of cloud-computing services, with about 48% of the $32 billion global market, and was long considered a favorite to win the Pentagon's business. However, other providers have been catching up in the fast-growing field, with Microsoft claiming about 16% of cloud-computing market share.

In late October, the Pentagon awarded the contract to Microsoft in "a paradigm changer" for the software company, according to Wedbush analyst Dan Ives. Amazon sued in federal court to overturn the decision in November, and a redacted version of the complaint was made public on Monday by the court.

In its complaint, Amazon claims its superior offering was brushed aside starting in the summer of 2019, as Pentagon officials became more aware of the president's dislike of Amazon. 

The president told reporters in July that he had received "tremendous complaints about the contract with the Pentagon and with Amazon" and that he "will be asking them to look at it very closely to see what's going on." 

In August, newly appointed Defense Secretary Mark Esper said he would be reviewing the contract process, pushed by Republican Senators Marco Rubio and Ron Johnson and the president himself, the Amazon complaint says.

Esper then said he would recuse himself from the controversial bidding process in October, citing a conflict of interest because his son works for IBM, one of the original bidders that had been eliminated from the contest. According to the lawsuit, however, the Pentagon had already awarded the contract to Microsoft a week prior, and his recusal was a public relations move.

The government's decision is "impossible to assess separate and apart from the President's repeatedly expressed determination to, in the words of the President himself, 'screw Amazon,' " the company's complaint stated. "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."

Mr. Trump has frequently lashed out at Amazon and CEO Bezos on Twitter while he has been president, claiming the e-commerce company doesn't pay taxes, costs small towns jobs and is responsible for the financial struggles of the U.S. Post Office. 

In:
• Amazon
• The Pentagon

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