By David Shepardson and Eric Beech
WASHINGTON (Reuters) – The U.S. Defense Department said on Friday it has completed a comprehensive re-evaluation of its $10 billion JEDI cloud computing contract proposals and determined that Microsoft Corp’s submission still represents the best value for the government.
Despite the reaffirmed award to Microsoft, the contract remains on hold after a judge in February granted Amazon.com Inc’s request to temporarily halt the deal from moving forward. Amazon argued the contract process reflected undue influence from President Donald Trump.
The Pentagon said Friday it “is eager to begin delivering this capability to our men and women in uniform.”
Amazon, which had been seen as a front-runner to win the contract, filed a lawsuit in November weeks after the contract was awarded to Microsoft. Trump has publicly derided Amazon head Jeff Bezos and repeatedly criticized the company.
In April, the judge overseeing the suit granted the Pentagon’s request to halt further action on the lawsuit to allow it to reconsider aspects of the decision.
Amazon shares fell on the announcement and were down 1.8% in late trading. The company did not immediately comment.
Microsoft said it appreciated “that after careful review, the DoD confirmed that we offered the right technology and the best value. We’re ready to get to work.”
The Joint Enterprise Defense Infrastructure Cloud (JEDI) contract could reach as much as $10 billion and is part of a broader digital modernization of the Pentagon aimed at making it more technologically agile.
The Amazon lawsuit said the 2019 Pentagon decision was full of “egregious errors”, which it suggested were a result of “improper pressure from Trump, who launched repeated public and behind-the-scenes attacks” to steer the contract away from Amazon to harm Bezos.
As well as deriding the Amazon head, Trump has accused the Washington Post newspaper, owned by Bezos, of unfair coverage.
Defense Secretary Mark Esper has rejected that there was bias and said the Pentagon made its choice fairly.
(Reporting by Eric Beech and David Shepardson; Editing by Mohammad Zargham and Hugh Lawson)
