Judge Halts Work on Microsoft’s JEDI Contract in Victory for Amazon

https://www.nytimes.com/2020/02/13/technology/amazon-jedi-pentagon-contract-microsoft.html

by jbegley • 6 years ago

152 95 6 years ago

I think Amazon will lose this case. It will be impossible to prove that Donald Trump's public attacks on Jeff Bezos influenced the decision of the Department of Defense to award the JEDI contract to Microsoft. Amazon wants to depose Donald Trump, SecDef Mark Esper, and former SecDef James Mattis. I don't see Donald Trump willingly testifying to a court under oath. If Esper and Mattis have to testify, they will say that the contract was awarded fairly and based on a neutral and thorough review of both proposals, and that Microsoft's offer fulfilled the needs of the DoD better. The SecDef, being the most important individual in the DoD, is in the best position to determine the department's needs. While this doesn't mean that corruption of the decision making process is impossible, these contracts have a paper trail and review/counter-review processes by a multitude of procurement officers and committees, and a federal judge unilaterally deciding the winners of military contracts would set a terrible precedent. At worst the contract could be voided and the competition restarted, but the final decision would most likely be the same.

eganist2• 6 years ago

At worst the contract could be voided and the competition restarted, but the final decision would most likely be the same.

Assuming Trump interfered, a rebid is the best possible outcome. It took well over a year for that bid to be completed, meaning by the time this matter is adjudicated, we'll know whether or not Trump is on his way to a second term.

And if not, then there's no way the JEDI contract re-bid will be completed before he's out on Jan 20, 2021.

fooey5• 6 years ago

There's no assumption needed, he directly and publically interfered.

Trump specifically ordered DoD to review the fundamental deal to make sure it didn't favor Amazon.

wyxuan• 6 years ago

Agreed. They might be able to turn up some emails discussing Trump's pressure but I think those emails (unless truly damning)won't be able to meet the bar.

DannyB2• 6 years ago

Nothing, no matter how bad, can overcome the Barr.

m0zg7• 6 years ago

> Microsoft's offer fulfilled the needs of the DoD better

Which it's not even up for debate that it did. The Pentagon already runs a ton of Microsoft software - something Amazon has no ability to properly support at this scale.

mrgordon• 6 years ago

Of course it’s up for debate. Everyone thought Amazon would win the contract because they had such a lead in cloud services until Trump got involved as part of his personal vendetta with Bezos for the Washington Post

fooey5• 6 years ago

It's a cloud computing contract, not for desktop services.

If anything, the terms of the contract were specifically written with features only Amazon can provide, and it was assume it would go to them until Trump cronies at Oracle got his ear.

ineedasername8• 6 years ago

Why would Amazon need to support Microsoft software? The contract is to build out cloud infrastructure, not every single product and service and application that might run on it. No vendor could do that.

If the DoD currently has MS systems on traditional infrastructure that they'd like to migrate to the JEDI cloud, there's no reason those couldn't continue to be supported by MS, just as the many other systems that run on the new cloud infrastructure will be supported by their own vendors. I no more expect Amazon to support every piece of software I run on their services than I would expect my appliance repairman to assist with my Hello Fresh cooking (if I had a subscription) just because they "support" my oven.

lern_too_spel• 6 years ago

The various government agencies already have contracts for Microsoft software support. The JEDI contract is for cloud infrastructure.

ineedasername8• 6 years ago

I think it will hinge on what, if any, communications took place between the administration and the DoD. If there were written communications, those will be discoverable during the lead up to a trial. Conversations that took below the SecDef level where (if) personnel felt pressured to skew things a certain way could also come out.

I don't think people watching this case would tend to thing the courts would award the contract to Amazon though. That is very much outside the scope of this case, and does not appear to be what Amazon is seeking. The case hinged on the more narrow question of whether the process followed was proper. Even apart from first-hand testimony on pressure, this can be determined in part from the timing and changes to requirements. If the requirements were changed at the last minute to include things that only Microsoft, by definition, could provide, then it's a problem for the DoD. For example, an 11th hour change to stipulate "selected contractor must currently offer per-minute billing on services" could easily be interpreted as unduly biased towards MS. A stipulation saying "Vendor branding of products must reference a shade of blue" (Azure) then that would be a bit of a smoking gun. I mean sure, a ridiculous example, but you see what I mean. And, being a civil case, the burden of proof is not "reasonable doubt", but the much lesser "preponderance of evidence" threshold.

m0zg7• 6 years ago

How about: "Vendor must be able to quicky fix bugs in Microsoft software"? Would that be "undue" or not? Seems like a desirable capability for a government entity that runs on Microsoft software.

tssva2• 6 years ago

The judge would not decide who would win the contract. The judge would determine if the contract needs to be re-competed. This has happened many times with DoD contracts and nothing about the judge deciding it needs to be would be precedent setting.

Asking for Trump to be deposed is the smartest thing Amazon has done in this case. Of course he will refuse which will lead to an extended court battle to try to force him to be. This will extend the case passed the election and at that point a different administration may decide themselves to scrap the contract award and re-compete it.

ticmasta• 6 years ago

Which itself will likely cause a payout to MS. Not $10B but I'd bet substantial...

javagram• 6 years ago

If Esper and Mattis have to testify, they will say that the contract was awarded fairly and based on a neutral and thorough review of both proposals, and that Microsoft's offer fulfilled the needs of the DoD better.

You are making the assumption that Trump didn’t actually interfere, or that if he did, Esper and Mattis would lie under oath to protect him.

Everything we know about Trump says he would have no problem interfering. He asked Comey to dismiss the case against Michael Flynn. He ordered OMB to halt disbursement of military aid for his personal political purposes. He was obeyed and if not for a single whistleblower almost got away with it.

Why would we assume he wouldn’t order DoD similarly?

topkai22• 6 years ago

The source of the quote saying the Trump pressured him to make sure Amazon lost the competition includes a follow up quote from Mattis telling his work group that they would be doing the acquisition by the book.

There is reason to believe that Trump tried illegally influence the award. There is also plenty of reason that he was unable to do so because senior subordinates ignored him and protected the process.

ineedasername8• 6 years ago

Well there's at least one positive outcome from this whole debacle so far with Oracle's lawsuit being heavily undercut by the award to MS.

sergiotapia2• 6 years ago

short MS

kevas• 6 years ago

Stop. Full stop...

This contract would add about $250m in additional each quarter. Their last Q’s revenue was somewhere in the neighborhood of $33b.

Just stop with your nonsense.

orf• 6 years ago

Obviously getting the JEDI contract has implications for Azure/Microsoft far, far beyond the monetary value of the contract itself.

sergiotapia2• 6 years ago

I guess I should have put in an /s forgot this isn't wsb

sdinsn• 6 years ago

Stop being so hostile (and wrong). The implications of JEDI are far larger than short term revenue. This will set the stage for decades of government cloud work.

keanzu2• 6 years ago

"In December, Amazon filed a challenge to the deal in federal court, saying that Mr. Trump used “improper pressure” on the Pentagon at its expense."

"Microsoft said Amazon “only provided the speculation of bias, with nothing approaching the ‘hard facts’ necessary” to demand them."

He may have applied improper pressure but I wasn't able to find where they presented any evidence to support this accusation. Was there any evidence or is the point of the court process to get some?

jdm2212• 6 years ago

This lawsuit is an effort to get hard evidence. This is just an injunction while they sort out how to go forward and what paperwork/depositions to grant Amazon.

threeseed• 6 years ago

Seems a bit pointless.

Even if Amazon wins there will likely be a re-bid process. At which point they will simply select Microsoft again. As we've seen with the DOJ Trump can exert significant influence without having to actually tell them what to do.

mayneack• 6 years ago

If Trump is really the only thing giving the contract to Microsoft, rebidding might land in 2021 at which point there's some chance Trump isn't in a position to exert influence.

jahlove• 6 years ago

These large proposals can take many years to award. There could very likely be a new administration by that time.

See the KC-X tanker program as an example:

01/2007 - RFP comes out

02/2008 - Northrop Grumman wins

03/2008 - Boeing successfully protests

08/2008 - Revised RFP comes out, then cancelled

09/2009 - Third RFP comes out

02/2011 - Boeing wins

https://en.wikipedia.org/wiki/KC-X#Initial_competition

fooey5• 6 years ago

The original reporting on JEDI was pretty much that it was written specifically with Amazon in mind, and that the RFP was a formality.

Someone at Oracle with access with Trump brought it to his attention, and Trump personally intervened, ordering DoD to ensure Amazon was not favored for the contract.

RobRivera• 6 years ago

Sometimes all a competitor needs is to impact competitor schedules to overtake market share.

jimbob45• 6 years ago

"On Thursday, Judge Campbell-Smith also required that Amazon pay a $42 million deposit that will be held by the court in case it later determines that the injunction was wrongfully issued and that Microsoft is owed damages."

I know $42MM is pocket change to these companies but this goes a long ways toward removing my perception of the judge being biased.

keanzu2• 6 years ago

my perception of the judge being biased.

That perception was possibly influenced by the HN title "Siding with Amazon" vs the title the NY Times used "Judge Halts Work on Microsoft’s JEDI Contract in Victory for Amazon". At no point in the article do the words "sides" or "siding" appear.

Edit: The HN title has been changed since I wrote this.

XMPPwocky• 6 years ago

https://twitter.com/nyt_diff/status/1228059729391476736

The NYT changed their headline after publication.

muststopmyths• 6 years ago

"Judge sides with side A" is to my recollection pretty standard terminology in legal reporting. Interesting that they felt the need to change it.

tomohawk• 6 years ago

It's a fig leaf.

It's not about the judge being biased, but about amazon really having nothing to lose compared to what they could gain, and swinging for the fences. It's also about the next contract.

They're unlikely to prevail, and have already, through their past actions, turned a lot of DoD people against them. If they had performed better with their previous contracts, they would likely have won this.

LiquidSky2• 6 years ago

Why would you have that perception at all?

TallGuyShort2• 6 years ago

Because it's pretty standard in government contracts to sue after you lose just-in-case. Another example is Sig Sauer winning the M17 / M18 contract and Glock suing. When I hear of this, I assume it's just a frivolous lawsuit.

MaupitiBlue• 6 years ago

Not sure where the 42 came from, but requiring the party seeking an injunction to post a bond is pretty standard on a case like this. I would read absolutely nothing into it.

crmrc114• 6 years ago

The pissing contest between Jeff and Larry (AWS and Oracle) has only resulted in MS getting Oracle + Azure. That may not seem like much, but to most enterprise and government bodies that is a huge + on the MS side is it not?

Also not mentioned here AWS already has GovCloud- there are a number of agencies both federal and state that use AWS. Its not like this contract is the _only_ contract there is to win. Its just a big one. Jeff is a pretty damn sore loser.

fooey5• 6 years ago

Oracle is a McGuffin, they're only mentioned at all in this drama as an excuse for Trump to interfere. They were never any kind of contender for the contract.

throwaway57525• 6 years ago

The president told the secretary of defense to "screw" one vendor in a competition for a $10B contract because of personal biases unrelated to the contract. In any normal time, that would be an administration ending scandal. Right now, it hardly rates, but on an absolute scale it's still a big deal and completely justifies this lawsuit.

outside1234• 6 years ago

There is no evidence that he actually did this. People have speculated that he might have and he clearly doesn't like Bezos, but that is not proof.

awb• 6 years ago

The president told the secretary of defense to "screw" one vendor in a competition for a $10B contract because of personal biases unrelated to the contract.

On Twitter it sounds like Trump has animosity for Bezos, but is there evidence Trump was involved in the process or the process was biased?

unlinked_dll• 6 years ago

Not to be too cynical, but if we started investigating every DoD contract where personal biases decided who won and who lost... the military industrial complex would probably crumble overnight.

balls1874• 6 years ago

Right now, it hardly rates

This is an underrated commentary.

I'm continually amazed at what transpires in the public forum, leading me to believe that the US Government has been corrupt for quite some time, but never out in the open.

Or, it could be like this https://youtu.be/aI0euMFAWF8

txcwpalpha• 6 years ago

I have seen multiple people saw "Jeff is a sore loser" and I truly don't get it. Do you not understand how these businesses work? Every single one of the executives at Amazon (and AWS) are under a fiduciary duty to make sure their business is protected, which includes pursuing legal action when a contract is possibly wrongfully awarded. This isn't Jeff just being salty (I honestly doubt Bezos even cares as AFAIK he isn't very involved in AWS at all). Hell, these same legal cases happen in countless government contracts all the time, they just aren't as publicized as this one because they aren't as large.

dude3• 6 years ago

Should be a factor. Guy involved in the JEDI decision was pursuing a job at Amazon.

https://theintercept.com/2019/06/03/amazon-defense-departmen...

vkaku• 6 years ago

Microsoft will win this, is what my gut feeling says. And Amazon may be forced to pay compensation by the people in the process.

How about they actually prove they can focus on privacy and be a good implementor for the government? I doubt if they will ever do that. That's the concern.

clSTophEjUdRanu• 6 years ago

My hunch is that Amazon is desperate for this because of looming regulations. We regularly see companies that cozy up to the government get special treatment.

ykevinator• 6 years ago

This is insane. Why does the government award a $2b contract to buy a $20m product. This is the joke of privatization.

sorenn111• 6 years ago

That the government is a poor spender and over pays is a joke of privatization? please elaborate because it seems to me that it is the joke of government purchasing: gov spends more than it takes in by people who are never in office long enough for the bill to come due.

srb4• 6 years ago

I used to work for a defense contractor and was involved in several proposals. A similar situation happened to us. RFP was written in a way that strongly favored our product. The proposal team thought we were the only contractor that could deliver the requirements and we priced it to reflect that. We lost to a competitor we didn’t even anticipate (a new entry into the space) and who probably massively underbid us.

I don’t know anything about Amazon’s proposal or if Trump has anything to do with the decision, but I imagine they may have believed all the hype and not priced it as competitively as they should. Or perhaps they misjudged the importance of certain requirements or Microsoft’s capabilities. Regardless, I imagine this was a wake up call at Amazon.

Oh yeah, that contract we lost - we protested it and ended up getting some work out of it after all.

axaxs• 6 years ago

Look, I understand that in a perfect world, all contracts would be neutral and fair. But we live in a decidedly imperfect world, full of bribes, vendettas, and good ole boy clubs.

We live in an age where you can be fired for expressing an opinion or character that doesn't align with your employer on social media.

Imagine making a new twitter account in your own name, and doing nothing but insulting your company. What do you expect to happen? That's not far from the case here. Are we more sympathetic because the players are rich?

Bezos bought a company that, for better or worse, constantly antagonizes the current government administration. Why is he shocked that his alt account didn't get a contract from them?

Judge Halts Work on Microsoft’s JEDI Contract in Victory for Amazon

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