A federal judge on Thursday ordered the Pentagon to halt its work on a controversial cloud-computing contract amid a court challenge by Amazon, notching a major win for the tech giant as it seeks to prove that President Trump improperly interfered to keep the $10 billion contract away from Amazon.
The Court of Federal Claims is granting Amazon’s request to stop the Pentagon from forging ahead with the cloud-computing project until the lawsuit is settled. The Department of Defense (DOD) was planning to work with Microsoft, the company that received the contract over Amazon last year, to implement a sweeping cloud infrastructure across the entire department despite Amazon’s legal challenge.
Microsoft, which has said little publicly about Amazon’s court challenge, said in a statement Thursday it is “disappointed” by the judge’s decision to delay the contract implementation but believes the facts are on its side.
“While we are disappointed with the additional delay, we believe that we will ultimately be able to move forward with the work to make sure those who serve our country can access the new technology they urgently require,” Frank Shaw, Microsoft’s corporate vice president of communications, said.
“We have confidence in the Department of Defense, and we believe the facts will show they ran a detailed, thorough and fair process in determining the needs of the warfighter were best met by Microsoft,” Shaw said.
Pentagon spokesman Lt. Col. Robert Carver said in a statement that the ruling has “unnecessarily delayed implementing DOD’s modernization strategy and deprived our warfighters of a set of capabilities they urgently need.”
“However, we are confident in our award of the JEDI Cloud contract to Microsoft and remain focused on getting this critical capability into the hands of our warfighters as quickly and efficiently as possible,” Carver said.
Amazon did not immediately respond to a request for comment.
The judge instructed Amazon Web Services to set aside $42 million to pay for any “costs and damages” if it turns out the injunction was “issued wrongfully.”
Amazon in January asked the court to stop Microsoft from working with the Pentagon to implement the Joint Enterprise Defense Infrastructure (JEDI) contract, arguing that the project should be put on hold until the courts work out whether Microsoft deserved to receive the lucrative deal.
The request comes amid a lawsuit from Amazon alleging the Pentagon allowed Trump to exert “improper influence” over the contract process, ultimately steering the cloud-computing project away from the online retail giant and toward Microsoft. Amazon, the leader in the cloud-computing marketplace, was the clear front-runner in the competition before Trump began publicly intervening in the process last summer.
Amazon escalated that fight earlier this week, announcing in a filing that it hopes to depose Trump and top administration officials to testify about their involvement in the JEDI award process.
“President Donald J. Trump has repeatedly demonstrated his willingness to use his position as President and Commander in Chief to disrupt the orderly administration of government functions, including federal procurements, to advance personal motives,” Amazon said in the court filing. “There is no question he did so here.”
Amazon’s case in the Court of Federal Claims is unprecedented as one of the largest companies in the country takes on the president himself over allegations of improper intervention and personal animus.
In a court filing last year, Amazon alleged that Trump engaged in “public and behind-the-scenes attacks” to steer the contract away from Amazon Web Services out of spite for his “perceived political enemy,” Amazon founder Jeff Bezos, who also owns The Washington Post.
Last summer, Trump publicly questioned whether the JEDI contract was written with Amazon in mind, touting an argument that had been circulated for months by Amazon’s cloud-computing rival Oracle and a procession of Republican lawmakers.
During a news conference, Trump said, “I’m getting tremendous complaints about the contract with the Pentagon and with Amazon. They’re saying it wasn’t competitively bid.
“Some of the greatest companies in the world are complaining about it, having to do with Amazon and the Department of Defense, and I will be asking them to look at it very closely to see what’s going on,” he added.
Shortly after Trump made his remarks, newly appointed Defense Secretary Mark Esper opened up a review of the JEDI program in August, pumping the brakes on a process that was already stalled by an unsuccessful court challenge from Oracle and several government investigations.
The president’s public remarks about JEDI, paired with his open antagonism toward Bezos, has raised serious questions over whether Trump weighed in on Microsoft’s behalf in order to burn Amazon.
Industry watchers were stunned by the Pentagon’s decision to award the contract to Microsoft, pointing out that Amazon seemed to be best-positioned to take on the task given its substantial work with the CIA. But Microsoft is also a popular cloud-computing partner for the federal government and the Pentagon has maintained that the company was simply best-equipped to create the DOD’s cloud infrastructure.
—Ellen Mitchell contributed. Updated at 5:25 p.m.