Economy

The Pentagon says it will partner with Microsoft for a Jedi Cloud deal

President Donald Trump spoke with Microsoft CEO Satya Nadella and Amazon CEO Jeff Bezos at a U.S. Technical Council roundtable on June 19, 2017 at the State Dining Room at the White House in Washington.

Jabin Potsford | Washington Post | Getty Images

The Pentagon said Friday that it has partnered with Microsoft for a major cloud deal that has been in dispute for months.

JEDI, or Corporate Security Infrastructure, has become one of the most highly competitive contracts for the defense sector. The deal aims to modernize the Pentagon’s massive information technology infrastructure and is valued at up to $ 10 billion for services provided over 10 years.

“The department has completed a comprehensive review of the Jedi Cloud projects, and determined that Microsoft’s proposal continues to represent the best value to the government,” the Pentagon said in a statement. “The Jedi Cloud Agreement is a fixed-price, indefinite-supply / indefinite-quantity contract that will make full-scale cloud computing services available to the DOT, while contract performance will not begin immediately. DOT is keen to start offering this capability. “

Shares of Microsoft rose in Friday’s trading session following the announcement.

The result represents a loss to Amazon, which challenges the Pentagon to award the deal later. He gave it to Microsoft In October. An Amazon representative did not immediately respond to a request for comment.

“After careful review, we appreciate that DOT has confirmed that we have provided the right technology and the best value. We are ready to go to work and ensure that those who serve our country have access to this much needed technology,” a Microsoft spokesman told CNBC in an email.

In November, Amazon Web Services, Amazon’s Cloud Computing division, File a lawsuit In the U.S. Federal Claims Court against the Jedi decision. That the company argued Pro-President Donald Trump Amazon and its CEO Jeff Bezos have pressured the Pentagon to award the contract to Microsoft. In the midst of the legal battle, the Pentagon called for a review and resubmission of agreements with Amazon and Microsoft. A judicial representative was not immediately available for comment following the Pentagon’s report.

Today’s decision could lead to further legal conflict.

The lucrative deal, scheduled for September last year, was scrutinized after Trump claimed it was last year. Serious consideration of the Jedi deal.

Speaking to reporters at the White House in July 2019, Trump named IBM, Microsoft and Oracle “I have no place for more people to complain.” The White House declined to comment.

Trump’s potential influence on this deal The focus came When a book was listed at the Pentagon during the tenure of then-Secretary of Defense James Mattis, President Mattis was told to “screw Amazon” out of the deal.

The billionaire executive, who owns the Washington Post, has disappointed Trump. The president continues to criticize the publication for releasing his administration. Trump has also gone after Amazon several times, he says, It does not remove the U.S. Post Office without paying its fair share of taxes.

Earlier this year, the Pentagon’s Inspector General released an award Does not appear to have been affected by the White House.

However, the Inspector General noted in his 313-page April report that it had limited cooperation from White House officials throughout its review and, as a result, could not complete its assessment of allegations of ethical abuse.

read more: Pentagon watchdog says White House has not affected Amazon’s decision to reject $ 10 billion cloud deal

At the time, Defense Department spokesman Lt. Col. Robert Carver said in a statement to CNBC that the Inspector General’s report confirmed that the Pentagon’s JTI cloud procurement process was “fair and lawful.”

An AWS spokesman suggested that the report was not disclosed at the time.

“It is clear from this statement that political interference could not be assessed, as many DOD witnesses were instructed by the White House not to answer IG’s questions about communication between White House and DOT officials,” the spokesman wrote in an email to CNBC. “The White House has refused to cooperate with the IG’s inquiry, another blatant attempt to avoid a meaningful and transparent review of the Jedi contract award.”

In December, Amazon’s AWS chief Andy Jassie told CNBC that the cloud deal had not been fairly settled.

Speaking to CNBC’s John Ford about the Jedi Award, Josie said: “There was significant political interference here.” It is difficult for government agencies including. I think it is dangerous for our country. “

This story develops. Check back for updates.

Thelma Binder

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