Microsoft's $10 Billion Pentagon Deal at Risk Amid Amazon Fight

Microsoft is in danger of losing a contract to provide $10 billion of cloud computing services to the Pentagon, a deal the government has threatened to scrap altogether after years of legal squabbling. From a report: The U.S. Defense Department said it will reconsider the controversial procurement if a federal judge declines to dismiss Amazon's allegations that former President Donald Trump's meddling cost the company the winner-take-all contract. That means the fate of a cloud project the Pentagon considers critical for its war fighters may rest in the hands of the U.S. Court of Federal Claims, which could soon issue a ruling on Amazon's accusations. The Pentagon said last month it would take too long to prove in court that its decision to award Microsoft the lucrative cloud deal wasn't unduly influenced by the White House. If the judge allows Amazon to argue its bias claims in the case, the government may decide to stop fighting.

'If the court denies the government's motion we will most likely be facing an even longer litigation process,' Pentagon spokesman John Kirby said at a press conference late last month. 'The DOD Chief Information Officer will reassess the strategy going forward.' The warning is another twist in a contentious process that has involved years of legal challenges, behind-the-scenes lobbying and a public relations campaign by technology rivals to unseat Amazon as the original front-runner for the cloud contract when it was unveiled in 2018. More than a year after Microsoft was named the winner, the Defense Department is still fighting to execute the Joint Enterprise Defense Infrastructure cloud -- or JEDI, an acronym intended to evoke 'Star Wars' imagery -- to serve as the primary data repository for military services worldwide. The deal is worth $10 billion over a decade. There are signs the Pentagon is already moving on. The Defense Department is talking up its other cloud contracts beyond JEDI, and some of the program's biggest cheerleaders have left the department, leaving new leaders to make decisions on a procurement they inherited from the Trump administration. Even Microsoft executives are trumpeting all the other work the company plans to keep doing for the Defense Department, in the event that its image-boosting JEDI deal goes south.

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