Amazon Successfully Halts Microsoft Pentagon Cloud Contract

A suit filed by Amazon.com Inc. (NASDAQ: AMZN) has been successful at temporarily blocking the Pentagon’s JEDI cloud contract, which was awarded to Microsoft Corp. (NASDAQ: MSFT) last October. The decision was issued by Judge Patricia Campbell-Smith in the U.S. Court of Federal Claims, but the contents of the decision remains under seal. Shares of Microsoft fell on the news.

The Joint Enterprise Defense Infrastructure, or JEDI, cloud computing contract could be worth up to $10 billion for services rendered over as many as 10 years. The project is intended to modernize the Pentagon’s IT operations, including processing and storing classified data, boosting communication with soldiers on the battlefield, and deploying artificial intelligence to speed up war planning and fighting capabilities.

The Department of Defense is not happy about the delay. DoD spokesperson Lt. Col. Robert Carver said in a statement, “We are disappointed in today’s ruling and believe the actions taken in this litigation have unnecessarily delayed implementing DoD’s modernization strategy and deprived our warfighters of a set of capabilities they urgently need.”

Amazon Web Services, Amazon’s cloud-computing arm, filed a formal motion asking for the temporary halt last month. It reasoned that the evaluation process for the JEDI cloud contract included “clear deficiencies, errors, and unmistakable bias,” evidenced by President Donald Trump’s bias against Amazon and its CEO Jeff Bezos. Trump has often criticized Amazon and Bezos, who also owns The Washington Post, in public and on Twitter.

In newly unsealed court documents, Amazon has requested to depose Trump to learn the scope of his involvement in the bidding process. The company would also like to depose Defense Secretary Mark Esper and former Defense Secretary James Mattis. AWS has been instructed to put aside $42 million by Feb. 20 for any “costs and damages” incurred in the event that the “injunction was issued wrongfully.” Microsoft and Amazon must respond to the filing by Feb. 27.