In the case of the JEDI contract, the events that led to Amazon’s fall from favorite to runner-up include a revolving-door hiring scandal, intervention from powerful members of Congress, competitors hellbent on overturning the Pentagon’s single-award approach and a president not bound by the ordinary guardrails observed by past presidents. JEDI is the military’s 10-year project to accelerate its cloud computing capacity and improve its access to advanced artificial intelligence tools.
The Defense Department originally expected to award the contract by September 2018. But the timeline was repeatedly thrown off by legal action and related high-level inquiries, prompted in large part by complaints from Amazon’s competitors.
Industry analysts told The Post that the Defense Department would probably not have considered Microsoft a viable competitor without key strides the company made during the 13-month delay.
“If the Defense Department had stuck to its original timeline ... I don’t think Microsoft would have been in the technical and strategic position it’s in now to compete for the award,” said Chris Cornillie, an analyst with Bloomberg Government.
Microsoft declined to comment for this story.
Technology investor Matt McIlwain, a managing director at Seattle-based Madrona Venture Group, has invested in cloud start-ups with ties to both companies. McIlwain said he thinks the department’s decision to go with Microsoft is “not the best choice” because Amazon offers more features and has more mature services in areas such as machine learning and streaming data. However, maneuvering by Amazon’s rivals gave Microsoft breathing room to spin out a range of new services, making it more viable choice, he said. (In addition to Amazon and Microsoft, IBM and Oracle also bid on the contract.)
“It was the protests by Oracle and IBM that prolonged this and gave Microsoft the opportunity,” McIlwain said.
During the 13-month delay, Microsoft made progress toward receiving the highest-level Defense Department security certification, which only Amazon currently holds.
In July, Microsoft extended its investments in artificial intelligence through a $1 billion partnership with a company called OpenAI, along with a separate $2 billion partnership with AT&T to develop 5G-compatible mobile data centers.
It introduced a series of new “tactical edge” innovations designed to give deployed troops access to technology in far-flung war zones. And it brokered a partnership with Oracle that could allow the Pentagon to more seamlessly transition its database technology to the cloud.
The backlash against JEDI stems from the government’s decision to turn to just one provider for a centralized system that will make up roughly 80 percent of the military’s cloud applications. The JEDI cloud would absorb and replace many of the Pentagon’s existing systems, something that inflamed legacy contractors such as Oracle. The Pentagon committed to that approach when it announced the award in March 2018 and has refused to budge.
Amazon Web Services was quickly viewed as the front-runner. Already the global market leader in cloud computing services by a long shot ― it held 47 percent of the market last year, compared with Microsoft’s 15 percent ― Amazon had a huge head start in the national security space. The company received a $600 million CIA contract in 2013.
The CIA contract effectively subsidized Amazon’s development of advanced capabilities needed to manage classified data, helping it become the only company that holds the Pentagon’s highest-level IT security certification, known as Impact Level 6.
Assuming Amazon to be the favorite, Oracle and IBM both lodged protests with the Government Accountability Office before bids were even due, arguing that the single-award approach would hurt the Defense Department’s national security mission.
Following the October deadline for bids, Microsoft seemed to stop its public criticisms of the Defense Department’s approach.
Oracle, meanwhile, pressed ahead. Even after Oracle’s initial bid protest was rejected, it took its case to the U.S. Court of Federal Claims in a lawsuit that sought to block the award, accusing Amazon of tainting the procurement through a series of revolving-door hires.
At least one of those hires did appear to have broken the department’s ethics rules, an investigation later found. A start-up founder, Deap Ubhi, had worked for Amazon before joining the Pentagon’s Defense Digital Service during the Obama administration, only to rejoin Amazon.
During his time at the Pentagon, Ubhi worked on the JEDI procurement, at one point tweeting: “Once an Amazonian, always an Amazonian” in response to a news article involving Bezos.
The court asked the Defense Department to investigate Ubhi’s involvement in the contract, putting the procurement on hold for months while the issue was investigated. The investigation concluded Ubhi had misled both the Defense Department and Amazon about the terms of his departure. But it wasn’t until July that the judge issued a ruling largely in the Defense Department’s favor, clearing Amazon of the “organizational conflict of interest” Oracle had alleged.
In a media briefing following the decision in early August, Defense Department Chief Information Officer Dana Deasy said the ongoing litigation had thrown off the award timeline.
“You have to remember how many months we were tied up on the [Court of] Federal Claims side of that, which redirected a lot of energy and a lot of people’s attention towards that,” Deasy said in a briefing with reporters. “We’re obviously very pleased with the outcome of that, but that work necessary to do that has caused us to have to spend additional time to complete the evaluation.”
In late July, pressure around the procurement ratcheted up again as complaints from Amazon’s competitors reached Trump.
That month, Trump instructed new Defense Secretary Mark T. Esper to reexamine the JEDI contract over concerns that the contract would go to Amazon, people familiar with the matter told The Post at the time.
It was around then that Sen. Marco Rubio (R-Fla.), whose political action committee has received donations from Oracle co-founder Larry Ellison, asked that the contract be delayed and lobbied the president directly on the matter, a member of his staff told The Post.
The Post and CNN reported at the time that a colorful flowchart labeled “Most Wanted” had landed on Trump’s desk. The flow chart depicted various Bezos-linked individuals under the title “A Conspiracy To Create A Ten Year DoD Cloud Monopoly.” It had been generated by Oracle’s Washington lobbyists.
Trump acknowledged on television he had been “getting tremendous complaints” from companies that compete with Amazon, citing Microsoft, Oracle and IBM.