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Pentagon IG: JEDI Cloud Procurement Unmarred By Presidential Interference

The White House’s claims of presidential privilege kept several potential witnesses from fully cooperating in the review. Microsoft says the findings show AWS lost the prestigious cloud transformation contract by bidding too high.

The U.S. Department of Defense Inspector General’s review of the JEDI procurement found that President Donald Trump’s expressions of animosity toward Amazon did not improperly influence military leaders who delivered the potentially $10 billion cloud computing contract to Microsoft.

The Pentagon’s watchdog noted that media reports of Trump’s statements about Amazon, as well as ongoing protests and lobbying by several companies vying for the contract, “may have created the appearance or perception that the contract award process was not fair or unbiased.”

Ethical misconduct by two procurement officials also did not improperly steer the Joint Enterprise Defense Infrastructure award to transform military IT with a commercial cloud vendor in any direction, the IG concluded.

[Related: The JEDI Cloud History: From A Cloud Goal To A Microsoft Win]

“We believe the evidence we received showed that the DoD personnel who evaluated the contract proposals and awarded Microsoft the JEDI Cloud contract were not pressured regarding their decision on the award of the contract by any DoD leaders more senior to them, who may have communicated with the White House,” the report released Monday reads.

Microsoft said the IG’s evaluation indicates that AWS lost the prestigious and lucrative contract on price—not because of improper interference by the president or any other military officials.

“It’s now apparent that Amazon bid too high a price and is seeking a do-over so it can bid again,” said Frank Shaw, Microsoft's corporate vice president of communications.

“At this stage, Amazon is both delaying critical work for the nation’s military and trying to undo the mistake it made when it bid too high a price,” Shaw added.

The Inspector General’s team, which consisted of auditors, criminal and administrative investigators, defense acquisition professionals and attorneys, completed its review without the participation of the White House, which tried to impose conditions that were too impractical and likely would result in incomplete information, the report said.

An assertion of presidential privilege made it so “we could not review this matter fully,” the IG concluded.

That claim of presidential privilege resulted in several witnesses being instructed by the DoD Office of General Counsel to not answer the investigator’s questions about communications with the White House.

“Therefore, we could not definitively determine the full extent or nature of interactions that administration officials had, or may have had, with senior DoD officials regarding the JEDI Cloud procurement,” the report said.

But interviews with dozens of procurement officials led the IG to conclude outside pressure did not skew their selection of Microsoft as the military’s primary cloud vendor.

“Most of their identities and involvement in the procurement award were unknown to White House staff and even to the senior DoD officials. None of these witnesses told us they felt any outside influence or pressure for or against a particular competitor as they made their decisions on the award of the contract,” the report said.

The IG also gave its imprimatur on the controversial choice made by senior military leadership to go with a single cloud vendor. Opting not to take a multi-cloud approach didn’t violate contract procurement law or standards.

The IG also looked at six officials who have come under scrutiny in the years that JEDI has been fought out in courts and in the public realm, including former Defense Secretary James Mattis, who it concluded did not violate any ethical standards.

Of those six, Deap Ubhi, former product manager for Defense Digital Service, was the only one who declined to participate.

Ubhi, who later went back to work for AWS, was the centerpiece of Oracle’s claims of improper interference steering the contract to Amazon, as he was negotiating an acquisition by Amazon of his startup while still at the Pentagon.

“Mr. Ubhi’s lies and his failure to disclose his employment negotiations and job acceptance with

Amazon violated the FAR and ethical rules. It also created the appearance of a conflict of interest when

the truth was later disclosed that he had worked on JEDI Cloud initiative market research while

negotiating for, and then accepting, re-employment with Amazon.”

In parallel to the IG evaluation, the Pentagon is conducting a limited review of the source-selection process after a federal court granted a restraining order as part of an Amazon lawsuit.

That judge’s decision is not inconsistent with the IG’s finding that source selection was not flawed, the report said.

The IG team did not evaluate whether the DoD appropriately awarded the contract to Microsoft over AWS based on technical capabilities of their respective cloud products. The review only consisted of an analysis over whether source selection complied with law, policies and military protocols for selecting vendors.

The IG did find that after Microsoft was selected, the Pentagon improperly disclosed proprietary Microsoft information to Amazon.

Microsoft’s Shaw noted that “Amazon has proprietary information about Microsoft’s bid that it should never have had.”

“This report doesn’t tell us much. It says nothing about the merits of the award, which we know are highly questionable based on the Judge’s recent statements and the government’s request to go back and take corrective action,” said an AWS spokesperson. “And, it’s clear that this report couldn’t assess political interference because several DoD witnesses were instructed by the White House not to answer the IG’s questions about communications between the White House and DoD officials. The White House’s refusal to cooperate with the IG’s investigation is yet another blatant attempt to avoid a meaningful and transparent review of the JEDI contract award.”

In its lawsuit, AWS has argued at least six of eight evaluation factors show flaws and signs of bias.

Amazon wants to ask Trump directly about his statement to Mattis to “screw Amazon” out of JEDI, as reported by a Mattis aide.

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