Microsoft Could Lose JEDI Contract If AWS Case Isn’t Dismissed: Report

The awarding of the $10 billion JEDI cloud contract to Microsoft could be rescinded unless a federal judge dismisses allegations of bias from Amazon Web Services, according to a Bloomberg report.

AWS has repeatedly contested the outcome of the Joint Enterprise Defense Infrastructure contract award in the courts. The Department of Defense selected Microsoft--AWS’ largest cloud rival--for the cloud computing contract in October of 2019.

[Related: Litigation Could Prompt DoD To Reassess $10B JEDI Cloud Project]

Bloomberg reported that Microsoft is “in danger” of losing the JEDI contract due to the prospect of continued lengthy litigation. The JEDI contract is intended to “improve the speed and effectiveness” of the U.S. military using cloud technologies, the DOD has said.

While the DOD has fought the AWS challenges to date, the department appears to be losing patience with the delay in the execution of the contract, Bloomberg reported.

The latest challenge from AWS, filed in December, included accusations that President Donald Trump’s “unapologetic bias” against Amazon and its CEO Jeff Bezos tainted the awarding of the contract.

When contacted by CRN, a DOD spokesperson pointed to comments from Pentagon spokesman John Kirby on the JEDI contract in mid-February.

Kirby said that the DOD continues to contend that “the allegation of improper influence is not supported.”

However, “if the court denies the government‘s motion we will most likely be facing an even longer litigation process,” Kirby said.

“The DOD Chief Information Officer will reassess the strategy going forward,” he said, according to a transcript of the comments.

The judge in the federal claims case, Patricia Campbell-Smith, could rule “at any time” on whether to dismiss the AWS allegations, Bloomberg reported. Alternatively, the judge could grant the AWS request for further discovery in the case.

Because it could be a lengthy process for the DOD to disprove the latest AWS allegations, “the government may decide to stop fighting,” Bloomberg reported.

AWS did not immediately respond to a request for comment.

In response to an inquiry from CRN, Microsoft provided a February blog post from Rick Wagner, president of the Microsoft Federal business. “We are ready to immediately begin performance to deliver on JEDI as soon as the litigation is resolved — and we hope that happens soon for the sake of our military men and women who urgently need these mission-critical capabilities,” Wagner wrote in the post.

According to AWS, the Trump administration was operating in an “increasingly corrupt environment” when it awarded the JEDI contract to Microsoft.

President Trump frequently criticized Amazon and Bezos in attacks partially stemming from Bezos‘ ownership of The Washington Post, a newspaper unaffiliated with Amazon that Trump believed had been unduly critical of his administration.

In a filing in December responding to AWS, Microsoft said that legally, the allegations from AWS “had to be raised in a timely pre-award protest.”

The DOD also said that what AWS is attempting to do is not permitted under legal precedent.

“AWS was aware of all the facts on which it bases these allegations well prior to both the original award and prior to DoD reaffirming the award on remand,” the U.S. government said in the December filing, which was filed by attorneys for the Department of Defense and Department of Justice. “Yet in both circumstances [AWS] declined to raise these allegations until after it learned that its proposal had been rejected.”

AWS is the No. 1 public cloud provider by market share, though Microsoft’s Azure cloud platform is the second largest and has been gaining ground against AWS in recent years, according to data from Synergy Research Group.