November 28, 2022

A federal court said Wednesday that it had not ruled out the possibility that former President Donald J. Trump interfered with the award of a military cloud computing contract worth $ 10 billion. This decision could lead to a revision of the long-term efforts to modernize technology in the Department of Defense.

The decision could be a victory for Amazon, which claimed it was passed over during contract deliberations due to Mr. Trump’s hostility towards its founder, Jeff Bezos. However, the Department of Defense has indicated that if the litigation dragged on, it would scrap the contract altogether, nullifying Amazon’s chance to secure the multi-billion dollar deal.

The 10-year Joint Enterprise Defense Infrastructure (JEDI) contract was awarded to Microsoft in 2019 after Amazon and other technology giants fought fiercely for the lucrative deal to modernize the military’s cloud computing systems.

However, Amazon sued to block the contract, arguing that Microsoft did not have the technical skills to meet the needs of the military and that the process was biased against Amazon because of Mr Trump’s repeated criticism of Mr Bezos .

Mr Bezos owns the Washington Post, which was aggressively covering the Trump administration, and Mr Trump referred to the newspaper as the “Amazon Washington Post” and accused it of “false news”.

Mr Trump said other companies should be considered for the JEDI contract, and Amazon argued that it had “undue pressure” to influence the Pentagon in choosing a technology provider.

“The record of former President Trump’s undue influence is worrying, and we are delighted that the court will examine the remarkable impact on JEDI procurement,” said Douglas Stone, an Amazon spokesman. “We continue to look forward to the court reviewing the many material shortcomings in the DOD’s assessment, and we remain committed to ensuring the department has access to the best technology at the best price.”

The Department of Defense said Mr Trump played no part in the decision. Microsoft said that Amazon’s prejudice contained no evidence and that it was ready to provide the military with the necessary technology.

“This procedural decision changes little,” said Frank X. Shaw, a Microsoft spokesman, since the Department of Defense has already sided with Microsoft twice. “For more than a year we’ve been doing the in-house work needed to move JEDI forward quickly.”

Much of the military uses outdated computer systems, and the Department of Defense has spent billions of dollars modernizing those systems while protecting classified materials.

Last February, Judge Patricia E. Campbell-Smith of the Court of Federal Claims ordered Microsoft to cease work on the contract pending Amazon’s legal challenge. The delay was unnecessary, a Pentagon spokesman said at the time, and it has scaled back efforts to update technology by the Department of Defense.

The Pentagon warned Congress in January against exploring other avenues to meet the Department of Defense’s needs for cloud computing technology if the court agreed to hear arguments about Mr Trump’s role.

Claims that Mr. Trump tipped the scales on Amazon “are subject to legal challenge” and would require testimony from senior Pentagon officials and former White House aides, the Department of Defense’s chief information officer said in a letter to Congress .

“The prospect of such a lengthy process could call the future of JEDI cloud procurement into question,” the office said in its letter.

The Department of Defense’s top priority should be putting the technology in the hands of service members and further delays would be inappropriate, the letter added. “This requirement goes beyond any procurement and we will be ready to ensure that it is met one way or another.”

Earlier this month, the Department of Defense urged the court to update its timeline for the case. “The persistent delay in the onset of services under JEDI means that the national security impact is continuing and to some extent exacerbated,” wrote Brian Boynton, assistant attorney general, in a court case.

A Defense Department spokesman declined to comment on the verdict.

Judge Campbell-Smith turned down petitions from Microsoft and the Department of Defense to dismiss Amazon’s interference complaint. In a lawsuit, she asked the companies and the agency to come up with a plan for how to proceed next month.

If the lawsuit continues, Amazon could petition former Trump administration officials to bolster its interference claims.

“The problem of Trump interference gets the ointment going for the DOD,” said Daniel Ives, director of equity research at Wedbush Securities. “You could try to work this deal out, return to first place, or reward it to Microsoft despite the litigation. The JEDI saga was frustrating for everyone involved. “