US defence secretary to review Pentagon cloud contract
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US defence secretary Mark Esper has launched a review of the Pentagon’s $10bn cloud-computing contract after US president Donald Trump expressed sympathy with complaints that Amazon is being given an unfair advantage.
Elissa Smith, a Pentagon spokesperson, said “no decision” would be made on the contract, known as the Joint Enterprise Defense Infrastructure contact, or Jedi, until Mr Esper had “completed his examination”. The Jedi project would transfer most of the Pentagon’s data to the cloud.
The multiyear contract is seen as a plum prize by tech companies because of its scale, and the decision to award it to a single bidder.
The Pentagon named Amazon and Microsoft as finalists in April after eliminating IBM and Oracle from consideration, and has said it expected to reach a decision by the end of the summer.
Amazon, whose Amazon Web Services arm is the industry leader in cloud computing, is considered the favourite to win.
Both Microsoft and Amazon declined to comment on Mr Esper’s review.
Mr Trump warned last month that he could order a review the Pentagon’s awarding of the contract, claiming that “great companies” were “complaining about it”. He specifically named Oracle and Microsoft.
Mr Trump has previously railed against Amazon over the company’s contract with the US Postal Service, has threatened antitrust action against the company, and has criticised it for not paying enough in taxes. Mr Trump has also feuded with Jeff Bezos, Amazon’s chief executive, over his ownership of The Washington Post, one of the president’s favourite media punching bags.
Oracle launched a legal challenge following their elimination, arguing in a federal court that the procurement process had violated federal laws meant to ensure a competitive process and was marred by conflicts of interest. Earlier this month, however, Judge Eric Bruggink of the US Court of Federal Claims dismissed Oracle’s suit.
Oracle has also previously complained about the Pentagon’s decision to award the contact to a single company, rather than breaking it up among several providers, arguing that favoured Amazon Web Services as the biggest player in the industry.
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