Administration to Review Pentagon's Cloud Computing Contract

President Trump says the process for awarding the massive, multibillion-dollar contract is generating 'tremendous complaints.'


WASHINGTON (AP) — President Donald Trump said Thursday that the administration will "take a very long look" at a massive multibillion-dollar contract the Pentagon is preparing to award for a cloud computing system, citing "tremendous complaints" he's heard about the process. Amazon Web Services Inc., a division of Amazon, and Microsoft Corp. are finalists for the contract estimated to be worth up to $10 billion over a decade.

Trump said during an unrelated event at the White House that companies that are no longer in the running to land the deal, known as Joint Enterprise Defense Infrastructure, or JEDI, have lodged complaints about the process. Republican lawmakers troubled by the Pentagon's handling of the contract also took their concerns directly to the president.

"I'm getting tremendous complaints about the contract with the Pentagon and with Amazon," Trump said when he was asked about the matter during an Oval Office appearance with the Dutch prime minister. "They're saying it wasn't competitively bid."

"We're looking at it very seriously," the president said. "It's a very big contract, one of the biggest ever given having to do with the cloud and having to do with a lot of other things."

Trump said some of the "greatest companies in the world" were among those complaining about Amazon, and he said the administration will look "very closely" at the contract because "I have had very few things where there's been such complaining."

Trump is a critic of Amazon, the e-commerce retailer owned by Jeff Bezos. Bezos also owns The Washington Post, and Trump has criticized the paper's coverage of the administration. The president's comments injected new uncertainty into a project the Defense Department has said is vital to maintaining the U.S. military's technological advantage over adversaries. Whichever company wins the contract will have the monumental task of storing and processing vast amounts of classified data. The Pentagon says it will enable troops to advance the use of artificial intelligence in warfare.

Oracle and IBM were eliminated from an earlier round of competition, leaving Amazon and Microsoft as the two finalists. Amazon and Microsoft declined to comment Thursday on Trump's remarks. Oracle didn't immediately respond to an emailed request for comment.

IBM said in a statement Thursday that it "has long raised serious concerns about the structure of the JEDI procurement" and continues to believe the Defense Department "would be best served by a multi-cloud strategy" involving multiple cloud systems operated by different companies.

IBM did not say whether it had shared those concerns with the White House. Both IBM and Oracle formally protested the process last year.

A federal judge last week tossed out a second challenge by Oracle alleging that the bidding process was rigged in Amazon's favor, and some in Congress have expressed concerns about potential conflicts of interest. Republican Sen. Marco Rubio of Florida sent a letter last week to White House national security adviser John Bolton asking that the Pentagon delay awarding the contract, contending that the process suffered from a "lack of competition" and the use of "arbitrary criteria and standards for bidders" that could waste taxpayer dollars and "fail to provide our warfighters with the best technology solutions."

Rubio had also expressed concerns about plans to award the contract to a single vendor. The Pentagon has said it plans to award the contract as soon as Aug. 23.

Rep. James Langevin, a Rhode Island Democrat who sits on the House Armed Services Committee, said Thursday he has full confidence in the Defense Department's cloud strategy and that it's important that the project be allowed to move forward. Langevin said in an emailed statement that it would be "wholly inappropriate" for Trump or any member of Congress to interfere in the procurement process, especially since the courts and the Government Accountability Office - the watchdog for Congress - have rejected challenges to the Pentagon's plans.

Daniel Goure, vice president of the Lexington Institute, a defense-oriented think tank based in Virginia, said it's not unusual for Trump to publicly raise concerns about a defense equipment contract, as Trump did weeks before he took office over the contract with Boeing for an updated version of Air Force One.

But Goure said it's rare for Trump to actually reverse a Pentagon decision, especially one backed by a legal opinion. "I would be incredibly surprised if the president decided to unilaterally cancel this," said Goure, whose institute receives funding from Amazon. "I think once he sees the process, or the process is explained to him and the document is explained to him, I think this will all go away."