Published: Sat, February 15, 2020
Markets | By Otis Pena

Amazon Wins Suit Suspending $10bn Microsoft US Military Contract

Amazon Wins Suit Suspending $10bn Microsoft US Military Contract

Amazon had asked the judge to force a temporary stay of work on the Joint Enterprise Defence Infrastructure, or JEDI, project until the court can rule on Amazon's protest over Pentagon awarding it to Microsoft.

A federal judge on Thursday temporarily blocked the United States military from awarding a $10 billion cloud computing contract to Microsoft, after Amazon claimed the process was tainted by politics.

However, Amazon believes the decision was made as a direct result of pressure applied by US President Donald Trump, and that the process was therefore neither fair nor impartial. A representative for Amazon didn't respond to a request for comment.

The judge's decision to block the deal from moving forward was sealed by the court, as was Amazon's January request for the injunction.

But a public court notice confirmed the injunction on the Pentagon, and it says that Amazon must establish a security fund of $42 million to be used for damages, if the court subsequently finds the injunction to be improper. No further details of the decision were immediately available.

Microsoft VP of communications Frank Shaw said in a statement that the company was "disappointed with the additional delay", but expressed confidence that things would work out in the tech giant's favor.

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Pentagon officials have stressed that this contract is important to progressing the US military's technological superiority over its global adversaries.

Microsoft has been forced to suspend its work on the lucrative JEDI contract after an appeal from competitor Amazon was upheld.

Early this week, Amazon had asked to depose Trump for its case.

In August, President Trump had also said that his administration was reviewing Amazon's bid for the contract following complaints that JEDI contract specifications favoured Amazon. Over the years, Trump's publicly attacked Bezos (or "Jeff Bozo", as he's taunted him on one occasion) on everything from Amazon's decimation of brick-and-mortar businesses to - now here's some true irony - avoiding taxes. Presumably, Amazon is arguing bias on these grounds.

The contract in question, for cloud computing services for the military, is among the Defense Department's biggest and it drew legal challenges over the procurement terms even before it was awarded.

Updates forthcoming on a rolling basis.

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