Published: Fri, November 15, 2019
Markets | By Otis Pena

AWS is challenging Microsoft's $10 billion JEDI contract win

AWS is challenging Microsoft's $10 billion JEDI contract win

It's not surprising, but as of today, November 14, it is official: Amazon AWS is protesting the U.S. Department of Defense's award of its $10 billion cloud contract to Microsoft.

It was initially believed that the contract was "gift-wrapped" for Amazon Web Services, the dominant leader in the cloud computing market. Microsoft made important strides during the year-long period the award was tied up in litigation, finalizing a number of partnerships that observers say may have narrowed the field somewhat.

Trump was previously reported as saying that his administration had received "tremendous complaints from other companies" about the JEDI bidding process. The process was subsequently paused the following month.

The two cloud computing giants had been battling for over two years about who would run the Joint Enterprise Defense Infrastructure project, a 10-year undertaking in modernizing the Pentagon and Department of Defense.

In a statement Thursday, Amazon said "numerous aspects" of the bidding process involved "clear deficiencies, errors, and unmistakable bias".

"I am confident that it was conducted freely and fairly without any type of outside influence, and I'll just leave it at that", Esper said in response to a question on whether Trump had asked him to bypass Amazon. Microsoft is the second-largest with a 15.5 percent share.

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"AWS is uniquely experienced and qualified to provide the critical technology the US military needs and remains committed to supporting the DoD's modernization efforts", an AWS spokesperson said.

AWS confirmed it filed a notice with the U.S. Court of Federal Claims of its intent to protest the Microsoft award, which was viewed as a major upset for No. 1-ranked AWS by its closest public cloud competitor. In a recent book, a speechwriter for former defence secretary Jim Mattis, Guy Snodgrass, claimed that Trump tried to convince Mattis to "screw" Amazon out of the deal. A few weeks later, his defense secretary, Mark Esper, launched a review of the procurement process, delaying the conclusion of the contest.

Microsoft could not immediately be reached for comment.

Amazon was widely considered the front-runner in the contract competition.

Amazon, one of the world's most valuable companies, has expanded from its origins in e-commerce to cloud services, streaming media, artificial intelligence and other ventures.

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