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AWS: Trump Interference, Errors Enough To Challenge Microsoft’s $10B JEDI Win

AWS is alleging that procedural errors in and changes to the request for proposal lead to the Department of Defense, as well as U.S. President Donald Trump’s interference, to erroneously award the Joint Enterprise Defense Infrastructure, or JEDI, contract to Microsoft.

Amazon Web Services tore into President Donald Trump and his administration, saying it’s been operating in an “increasingly corrupt environment” as it seeks to challenge the federal government’s awarding of the Joint Enterprise Defense Infrastructure cloud computing contract, worth up to $10 billion, to Microsoft.

The disclosure, made in an amended complaint in the U.S. Court of Federal Claims on Tuesday, made clear that AWS -- the leading public cloud provider -- was holding the Trump administration responsible for handing the contract over to its rival, which has been steadily gaining market share. AWS said that the court should stop the Department of Defense and Microsoft from continuing work on the project.

AWS also alleged that the Department of Defense made changes to its request for proposal that gave the advantage to Microsoft despite what AWS said were technical and pricing advantage it offered in its call for the court to stop the DoD and Microsoft from continuing work on the JEDI contract and to re-evaluate AWS’ and Microsoft’s proposal for the contract.

“Faced with the Court‘s February 2020 ruling that AWS was likely to succeed on the merits,” the complaint reads, “DoD undertook corrective action amidst an increasingly corrupt environment in which President Trump has made clear that anyone in the federal government who does not do his bidding will face the most severe career reprisals. From Department of Justice prosecutors, to inspectors general of numerous federal agencies, to public health officials during the COVID-19 pandemic, actions adverse or perceived to be adverse to President Trump have resulted in demotion or, more often, dismissal.”

The U.S. Department of Defense in 2018 started asking for proposals to develop its JEDI cloud transformation initiative for moving all its cloud computing services to a single cloud provider. AWS, Microsoft, IBM, Oracle, Google, and others entered the fray.

AWS was the early favorite to win the JEDI contract due to previous work with the DOD. However, after an evaluation of proposals, during which U.S. President Trump told reporters at the White House that complaints from companies with unsuccessful bids had convinced him to intervene in the process, the DOD re-evaluated the contract and in October 2019 awarded the JEDI contract to Microsoft.

[Related: Amazon: Nearly 20,000 Workers Got COVID-19, ‘Lower Than The Expected Number’]

AWS protested the awarding of the contract, and a federal judge in February ordered the government to halt substantial implementation work on JEDI with Microsoft. The DOD in September completed its re-evaluation of the JEDI cloud solicitation process and re-affirmed award of the potentially $10 billion contract to Microsoft over AWS.

Microsoft in the meantime has created the Azure Government Top Secret cloud, a new cloud focused on serving government agencies with highly sensitive and classified data, as a way to show commercial parity for the eventual JEDI cloud.

AWS originally on October 23 filed the latest protest to the JEDI contract, but that protest was not publicly released until December 15, and only in a redacted form.

In the new protest, AWS wrote that it had earlier protested several flaws in nearly every aspect of the DOD’s evaluation and source selection decision.

Based on just the first challenge, that DOD improperly accepted Microsoft’s non-compliant proposal in a specific scenario, the court “halted further performance of the JEDI Contract without ruling on the numerous other fatal flaws in DOD‘s award decision.”

After the DOD relaxed its request for proposal requirements to accommodate Microsoft’s previously non-compliant proposal, AWS wrote, the company adjusted its own proposal to reflect the new requirements, giving it a significant price advantage over the Microsoft proposal.

Because of AWS’ new price advantage, AWS alleged, the DOD revised its evaluations either “to acknowledge an overlooked AWS strength or to revise an improperly assessed weakness” while finding new AWS weaknesses or Microsoft advantages, resulting in Microsoft “marginally” coming on top of the bid process and the introduction of even more “egregious” errors than were found in the initial reward.

AWS is alleging that the JEDI contract, in terms of the DOD move to award it to Microsoft, has four primary issues.

The first, AWS said, is a failure to evaluate proposals in accordance with solicitation. AWS alleges that the DOD, which like other government agencies is supposed to conduct procurements in a manner consistent with request for proposal terms and with laws and regulations, actually determined that Microsoft’s proposal was technically superior to that of AWS based on “a superficial and erroneous evaluation that deviated from the RFP‘s stated criteria for obtaining a cutting-edge and market-leading cloud solution.”

The second, based on examples that were severely redacted, accuse the DOD of “blatant disparate treatment” in how the DOD held AWS and Microsoft to different standards that let Microsoft win the contract despite inferior technical capabilities and higher price. “Under a fair and equal evaluation, DOD would have determined AWS presented the best value based on its technical superiority and low price,” AWS said.

The third is an irrational best value decision by the DOD to award the JEDI contract to Microsoft despite procedural errors and what AWS termed the reality that “AWS ‘s offering provides substantially greater capabilities and represents the best value for the Government and the warfighter.”

The fourth is improper influence and a conflict of interest due to interference by Trump in the JEDI contract process. AWS alleged senior DOD officials in charge of the JEDI procurement process met with senior White House officials to discuss the program, after which the White House obstructed “meaningful investigation” of those meetings, leading the DOD Inspector General to conclude that it “’could not definitively determine the full extent or nature of interactions that administration officials had ... with senior DOD officials regarding the JEDI Cloud procurement,’ and therefore could not rule out that President Trump had interfered with the JEDI procurement to the detriment of AWS.”

“Through his public statements and explicit and implicit directives to senior DOD officials, President Trump made known his unapologetic bias against Amazon and [Amazon Founder and CEO Jeff] Bezos and his fervent desire that AWS not be awarded the JEDI Contract,” AWS alleged.

Trump has often criticized Amazon and Bezos in attacks stemming from Bezos‘ ownership of The Washington Post, a newspaper unaffiliated with Amazon that the president believes is unduly critical of his administration.

Because of these allegations, AWS is asking the court to declare that the re-awarding of the JEDI contract to Microsoft is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

AWS is also asking the judge to prevent further work on the JEDI contract, to re-evaluate proposals from Microsoft and AWS, to direct the DOD to replace the team responsible for re-evaluating revised proposals, and award to AWS its proposal costs.

“After the Court rejected the flawed initial JEDI evaluation, the DOD spent over four months attempting to revive Microsoft’s non-compliant bid and reaffirm that flawed and politically-biased decision,” said an AWS spokesperson in an email. “As a result of the DOD fixing just one of many errors, the pricing differential swung substantially, with AWS now the lowest-priced bid by tens of millions of dollars. The fact that correcting just one error can move the needle that substantially demonstrates why it’s important that the DOD fix all of the evaluation errors that remain unaddressed, and ensure they are getting access to the best technology at the best price. We had made clear that unless the DOD addressed all of the defects in its initial decision, we would continue to pursue a fair and objective review, and that’s exactly where we find ourselves today.”

Amazon seems to be saying the only way the company can lose is if the procurement isn’t fair, but the market every month tells them that’s not true, said Frank Shaw, corporate vice president for Microsoft communications, in an emailed reply to a CRN request for information.

“Large and sophisticated customers regularly choose Microsoft over AWS. They do this because of the strength of our technology, our understanding of complex projects, and our overall value,” Shaw wrote.

When Amazon lost the bid and was informed of Microsoft’s pricing, Amazon realized they had bid too high, Shaw wrote.

“They then amended aspects of their bid to achieve a lower price. However, when looking at all the criteria together, the career procurement officials at the DoD decided that given the superior technical advantages and overall value, we continued to offer the best solution. We also know what it takes to serve the DoD having worked with them for more than forty years.

“The DOD’s independent IG report found there was no evidence of actual procurement interference so it is time we moved on and got this technology in the hands of those who urgently need it: the women and men who protect our nation,” Shaw wrote.

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