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

Published 08/01/2019, 09:40 PM
Updated 08/01/2019, 09:40 PM
© Reuters. FILE PHOTO: The Pentagon in Washington is seen from aboard Air Force One

© Reuters. FILE PHOTO: The Pentagon in Washington is seen from aboard Air Force One

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.

© Reuters. FILE PHOTO: The Pentagon in Washington is seen from aboard Air Force One

Last month, four Republican lawmakers, including Mac Thornberry, his party's senior member on the House of Representatives Armed Services Committee, sent a letter to Trump urging him to move forward with the contract.

Latest comments

MSFT is the most sensible option.
Amzn should be excluded if they put a spy in the field and then use his info once he returned.
"You want Pentagon contracts? Line my pocket$$$$$!" says Trump. "I'm a businessman, not a politician. That's what got me elected, remember?"
Dictator Donald and Moscow Mitch request the pentagon consider bids from Russian competitors, given their success in hacking US companies wouldn't it be best to have the top gun in the world on our side!!!
 yes and I can't play golf worth a ***** what's your point! Dictator Donald manipulates everything he can - Stormy Daniels was trending so we need to submerge the media with fake stories to send he to the back page!
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