A last-minute review of a $10bn Pentagon cloud computing contract has failed to seek new information from Amazon or Microsoft, the two bidders, raising concerns that it is a political ploy aimed at reassuring the White House.
Mark Esper, the defence secretary, was this month due to announce the winner of the contract, known as Jedi, which would give one company responsibility for handling US military data and communications around the world.
But Mr Esper threw that process into doubt when he announced a fresh review of the bidding with just weeks to go before an expected decision. His announcement followed accusations by Oracle, the enterprise software group, that the process had been tainted by conflicts of interest within the Pentagon, and a late intervention by Donald Trump. The US president, who has criticised Amazon founder Jeff Bezos, weighed in on the way the contract was being handled, saying: “Great companies are complaining about it.”
However, since announcing the review Mr Esper has not asked, and is not planning to ask, for new information from either Amazon or Microsoft, according to three people close to the process.
Instead, officials said, the process is more of an “education” for the defence secretary, and an opportunity for him to look at decisions that were made before he was appointed last month.
Sam McGowan, a research analyst at Beacon Policy Advisers, a consultancy in Washington, said: “The fact that Mr Esper has not contacted either of the two bidders suggests that his decision to review the contract . . . is more about finding a way to persuade the president to stick with it rather than undermining US national security and scrapping the entire contracting process.”
Amazon, Microsoft and the Pentagon all declined to comment.
US military officials fear being overtaken by other countries in the race to overhaul and upgrade their computer systems. Jack Shanahan, the head of the Joint Artificial Intelligence Centre, said recently: “We don’t want to waste any more time moving forward because we know our potential adversaries are doing it at their own speed.”
The Department of Defense is looking to move its information technology systems off its own physical servers and into the cloud, and is offering one company $10bn over 10 years to handle the contract.
The Jedi contract is unusual in its scale and complexity and could result in a single company not only dominating US defence communications systems but also finding itself in pole position to win similar government contracts around the world.
The process has been beset by controversy and accusations of political favouritism, however.
Oracle, which came third in the bidding process, launched a legal challenge against it, while the Pentagon’s inspector-general is also looking into how the rules for the bid were drawn up and whether any officials had conflicts of interest.
A judge ruled against Oracle’s complaint last month, but also noted that at least two Pentagon officials had disregarded their ethical obligations by negotiating for jobs at Amazon while working on the procurement process. Oracle said on Monday it would appeal against the decision.
Those close to the bidding process said they are concerned that Mr Trump could intervene once more. “The new defence secretary will want to kick the tyres on this,” said one. “But more importantly than that, he will be doing everything he can to make sure the White House signs up to whatever decision he makes.”
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