Amazon: We lost Pentagon deal because of Trump pressure
Amazon claims that President Donald Trump pressured the Department of Defense to award a lucrative contract to a rival, according to a lawsuit made public Monday.
Amazon and three other companies bid over the summer to provide cloud-computing services to the Pentagon, a contract that could pull in $10 billion for the winner over the next decade. Microsoft, Oracle and IBM also bid for the contract, formally called Joint Enterprise Defense Infrastructure, or JEDI.
Amazon Web Services is the leading provider of cloud-computing services, with about 48% of the $32 billion global market, and was long considered a favorite to win the Pentagon’s business. However, other providers have been catching up, with Microsoft claiming about 16% of cloud-computing market share. Defense Secretary Mark Esper recused himself from the controversial bidding process this past fall, citing a conflict of interest because his son works for one of the original bidders.
Over the summer, Mr. Trump called for an investigation into the bidding process. The president told reporters in July that he had received “tremendous complaints about the contract with the Pentagon and with Amazon” and that he “will be asking them to look at it very closely to see what’s going on.”
In late October, the Pentagon awarded the contract to Microsoft in “a paradigm changer” for the company, according to Wedbush analyst Dan Ives. Amazon in November, and a redacted version of the complaint was made public on Monday by the court.
In the redacted complaint released by the court, Amazon accuses the Pentagon of bowing to pressure from the president, “who launched repeated public and behind-the-scenes attacks to steer the JEDI Contract away from AWS to harm his perceived political enemy—Jeffrey P. Bezos, founder and CEO of AWS’s parent company, Amazon.com, Inc. (“Amazon”), and owner of the Washington Post.”
The government’s decision is “impossible to assess separate and apart from the President’s repeatedly expressed determination to, in the words of the President himself, ‘screw Amazon,'” the complaint reads. “The stakes are high. The question is whether the President of the United States should be allowed to use the budget of DoD to pursue his own personal and political ends.”
Indeed, Mr. Trump has frequently lashed out at Amazon and CEO Bezos on Twitter, claiming the company doesn’t pay taxes, costs small towns jobs and is responsible for the financial struggles of the U.S. Post Office.
This is a developing story.