Amazon. Com (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) are at risk of losing out on the multi-billion JEDI cloud computing contract. Initially awarded to Microsoft in 2019, the $10 billion contract has been mired in litigation, with Amazon arguing it was wrongly awarded.
Amazon JEDI Defense
Amazon went to court disputing the awarding of the contract to Microsoft, alleging that then-president Donald Trump exerted pressure on the Pentagon to ensure it does not win. Trump has always been vocal against Amazon co-founder Jeff Bezos who he blames for unfavorable coverage of his administration.
A federal judge refusing to dismiss much of Amazon’s case has triggered a response for the defense department. Oracle Corp had also sued to block the JEDI contract ending up at Amazon on claims that an Amazon employee helped steer the procurement process in favor of the e-commerce giant.
The employee in question had worked for the Pentagon between 2016 and 217 before being hired by Amazon. The claims were thwarted by a court ruling which concluded the employee did not taint the program. A report by Pentagon Inspector also concluded that the pentagon adviser did not in any way violate ethical obligations.
Deputy Defense secretary Kathleen Hicks has confirmed that the department will review the project in its entirety. The defense department has been forced to action amid growing concerns that a lengthy litigation process will jeopardize the program’s implementation. The JEDI program seeks to consolidate all the patchwork of data systems within the defense department.
Once implemented, it will accord defense personnel better access to real-time information while also putting the department on the front foot on emerging technologies such as artificial intelligence. The JEDI project has been mired in controversy from the onset, with lawmakers calling out the winner-take-all approach.
According to lawmakers, Pentagon should resort to a popular approach whereby multiple companies are allowed to bid for various project components. By spreading out the work to multiple companies, the agency would avoid unnecessary legal challenges that have so far derailed it.