Microsoft Amazon meets for a $ 10 billion Pentagon cloud computing contract

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WASHINGTON (Reuters) – Microsoft Corp.. (MSFT.O) he has won a $ 10 billion Pentagon computing cloud contract, said Defense Department Friday, hitting the favorite Amazon.com Inc (AMZN.O).

FILE FILE: Visitors stand in front of a display screen at the new Oxford Circus shop at Microsoft before opening in London, July 9, 2019. REUTERS / Simon Dawson

The Enterprise Infrastructure Infrastructure (JEDI) contract is part of the wider Pentagon digital modernization which is intended to be made more technically flexible.

But the contracting process was declining for a long time in conflicts of interest allegations, even drawing the attention of President Donald Trump, who took swipes in public at Amazon and its founder Jeff Bezos.

Oracle Corp (ORCL.N) expressed concern about the award process for the contract, including the role of former Amazon employee who worked on the project by the Department of Defense but reused himself, and then left the Department Protected and returned to Amazon Web Services.

In a statement, Amazon Web Services (AWS) spokesman said the company was "surprised at this conclusion."

The company stated that a “detailed assessment of the comparative offers only” would lead to a different conclusion, according to the statement.

AWS is considering options to challenge the award, a person who knows the subject Reuters.

While Pagagon has the strongest fighting force in the world, many officials still find it very unsatisfactory.

Officials have complained that they have outdated computer systems and are unable to access files or share information as quickly as possible in the private sector.

Some companies were also concerned that one award would give the winner an unfair advantage in follow-up. Patagon has stated that he intends to award future cloud contracts to multiple contractors.

This week, Mark Esper, US Defense Secretary, removed it from reviewing the deal about his adult employment with one of the original contract applicants, IBM Corp (IBM.N). IBM had previously bid for the contract but had already been out of competition.

Microsoft said it was commenting. IBM and Oracle did not immediately send back requests for comments.

The Washington Post on Wednesday reported that composer composer Guy Snodgrass, who was a speech writer and communications director of former Defense Secretary Jim Mattis, retired in a forthcoming book made by Trump to “screw” Amazon by awarding the cloud computing contract. a rival.

“We are not to do that,” said Mattis with Pentagon officials, according to The Post's report on the book, which is due to be published on October 29. “It is the book, legally and ethically, that will do this. ”

Reuters could not receive a copy of the book immediately to verify the Post report.

In a statement announcing Microsoft as a winner, the Pentagon stressed its view that the competition was conducted fairly and lawfully.

“All tenders (tenders) were treated fairly and evaluated in accordance with the stated evaluation criteria of individuals. Prior to the award, the department awarded the DOD Inspector, who sent the decision to proceed, he said.

Microsoft shares were up 2.5% to $ 144.35 in post-time trade after the news. Amazon shares were reduced by 0.98% to $ 1,744.12.

The Pentagon said that it had awarded more than $ 11 billion on 10 separate cloud contracts in the last two years.

“As we continue to operate the Cloud DOD Strategy, there are additional contracts planned for cloud and complementary migration services and integration solutions necessary to achieve effective cloud capture,” said the Pentagon.

Additional reporting by Stephen Nellis and Jeffrey Dastin in San Francisco; Reported by Phil Stewart in Washington; Edited by Cynthia Osterman and Sonya Hepinstall

Our Standards:The principles of Thomson Reuters Trust.

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