IT/Networks

Amazon Web Services challenges Pentagon decision to stick with Microsoft for cloud contract

WASHINGTON — In new court arguments over the Pentagon’s enterprise cloud contract, Amazon Web Services said the agency errored in affirming its pick of Microsoft, noting the AWS offer is cheaper.

Microsoft rebuffed the claim, saying that AWS only lowered its bid for the Joint Enterprise Defense Infrastructure contract, known as JEDI, after seeing Microsoft’s price tag, according to redacted court filings released Tuesday by the Court of Federal Claims. Microsoft argued that its technical advantages are superior, which AWS rejects, calling the contracting process biased toward Microsoft and asking the judge for an objective review.

The long-disputed contract, potentially worth up to $10 billion over a decade, will provide cloud-computing capabilities to the war fighter in tactical environments and serve as an important platform for artificial intelligence development. Pentagon IT officials have said that the delay has hindered those efforts.

Microsoft won the contract in October 2019, and when AWS objected, a judge found that AWS’ initial protest had merit and was likely to succeed based on only the first of six errors that the company alleged in the evaluation process. DoD completed a corrective action to review proposals again, reaffirming Microsoft as the winner in September this year.

AWS argued that the DoD made “even more egregious” errors in its second-round review than the mistakes that the company alleged during the initial award process.

The company also continued to raise its allegations of political interference by President Donald Trump. AWS said that Trump tried to interfere to ensure AWS lost because of his distaste for Amazon founder Jeff Bezos, who owns the Washington Post, which has run stories critical of the president.

AWS argued the DoD’s corrective action, which only amended the RFP for a specific data storage capability, led to a significant reduction in the price that AWS would charge for JEDI, making its proposal lower than Microsoft’s.

“As a result of the DoD fixing just one of many errors, the pricing differential swung substantially, with AWS now the lowest-priced bid by tens of millions of dollars,” an AWS statement said. “The fact that correcting just one error can move the needle that substantially demonstrates why it’s important that the DoD fix all of the evaluation errors that remain unaddressed, and ensure they are getting access to the best technology at the best price. We had made clear that unless the DoD addressed all of the defects in its initial decision, we would continue to pursue a fair and objective review, and that’s exactly where we find ourselves today.”

Amazon continued in the complaint to allege that the DoD tried to “negate many of the advantages” AWS had over Microsoft. While the DoD corrected initial errors that AWS identified, AWS claimed in the court filing that the department also found “some ‘new’ purported weakness in AWS’ proposal, by identifying ‘new’ supposed technical advantages in Microsoft’s proposal, or by ignoring the RFP’s evaluation criteria entirely.” The alleged errors require more scrutiny from the court, AWS argued.

Microsoft countered that it offered the best overall package.

“As the losing bidder, Amazon was informed of our pricing, and they realized they’d originally bid too high,” Microsoft spokesperson Frank X. Shaw said in a statement. “They then amended aspects of their bid to achieve a lower price. However, when looking at all the criteria together, the career procurement officials at the DoD decided that given the superior technical advantages and overall value, we continued to offer the best solution.”

AWS’ initial protest last year argued that the DoD made several technical errors when evaluating its proposal, in addition to allegations of interference by Trump. In February, the judge halted the DoD and Microsoft from working on the JEDI cloud after finding merit to the first of AWS’ allegations of the department’s contracting errors.

The DoD later took corrective action by reconsidering bids for a specific evaluation factor, which later prompted an agency protest by AWS because of allegations that the department didn’t respond to the company’s questions about the amended RFP. The Pentagon ultimately chose Microsoft a second time.

The Defense Department didn’t respond to a request for comment on the new filings.

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