Pentagon puts $10 billion JEDI contract on hold after Trump suggests it favored Amazon

Reuters

Published Aug 01, 2019 09:40PM ET

Pentagon puts $10 billion JEDI contract on hold after Trump suggests it favored Amazon

By Idrees Ali and Nandita Bose

WASHINGTON (Reuters) - The Pentagon has decided to put on hold its decision to award a $10 billion cloud computing contract after President Donald Trump said his administration was examining Amazon.com (NASDAQ:AMZN) Inc's bid following complaints from other tech companies.

The contract, called the Joint Enterprise Defense Infrastructure Cloud, or JEDI, is part of a broad modernization of the Pentagon's information technology systems.

Oracle Corp (NYSE:ORCL) lobbied aggressively and expressed concerns about the award process for the contract, including asking about the role of a former Amazon employee who worked on the project at the Defense Department but then recused himself, then later left the Defense Department and returned to Amazon Web Services.

Oracle and IBM (NYSE:IBM) Corp have since been eliminated from the competition, leaving Amazon and Microsoft Corp (NASDAQ:MSFT) as finalists.

Pentagon spokeswoman Elissa Smith said Defense Secretary Mark Esper, who assumed his role on July 23, was reviewing accusations of unfairness.

"Keeping his promise to Members of Congress and the American public, Secretary Esper is looking at the Joint Enterprise Defense Infrastructure (JEDI) program," Smith said in a statement on Thursday. "No decision will be made on the program until he has completed his examination."

Amazon Web Services and Oracle did not immediately respond to requests for comment.

The decision delays the award of the contract, which the Pentagon had hoped would occur in August. Trump has had a contentious relationship with Amazon founder Jeff Bezos, owner of the Washington Post, which Trump has accused of unfair coverage.