Amazon's JEDI Protest Hinges on Microsoft's 'Noncompliant' Storage
Recently unsealed court documents shed new light on Amazon's suit against the Pentagon over its planned $10 billion cloud contract with Microsoft, and why a federal judge recently granted its request to halt work on the contract.
After fielding bids from major cloud vendors, the Department of Defense (DoD) last fall awarded the Joint Enterprise Defense Infrastructure (JEDI) contract to Microsoft, surprising many industry watchers who had expected Amazon Web Services (AWS) to win the contract. In late 2019, Amazon filed suit against the DoD contesting Microsoft's win, followed by a request for an injunction this past January.
Judge Patricia Elaine Campbell-Smith of the U.S. Court of Federal Claims granted Amazon's injunction request in February, temporarily preventing the DoD and Microsoft from proceeding with JEDI work. However, her official opinion had been sealed until last Friday.
The newly unsealed documents indicate that one of the main tenets of Amazon's protest is that a key piece of Microsoft's proposed technology solutions to the DoD was "improperly evaluated" and should have instead disqualified Microsoft from the bidding process.
The JEDI bidders were explicitly instructed to submit "online and replicated storage" solutions that were "highly accessible," according to Amazon's injunction request. While the unsealed documents don't specify exactly what data storage solutions were submitted by the bidders to the DoD, Amazon contends that Microsoft's proposal was a "noncompliant storage solution."
The DoD "should have found [Microsoft's] technical approach unfeasible, assigned a deficiency, and eliminated Microsoft from the competition," according to Amazon.
Campbell-Smith sided with Amazon, stating in her opinion that Amazon "is likely to demonstrate that [the DoD] erred" by not disqualifying Microsoft's data storage solution. In addition, Campbell-Smith ruled that this error in Microsoft's favor might have cost Amazon winning the JEDI contract altogether.
"[T]he court considers it likely that [Amazon's] chances of receiving the award would have increased absent [the DoD's] evaluation error. Even if what appears to be a deficiency did not result in [Microsoft's] elimination from competition, a reduction in the...price advantage attributed by the [DoD's Price Evaluation Board] to [Microsoft's] use of...storage likely would affect the price evaluation, which in turn, would affect the best value determination."
The DoD has protested the injunction partly on the grounds that delaying its work on JEDI could hurt national security, and the court takes that concern "seriously," according to Campbell-Smith. However, she added, "[T]he fact that [the DoD] is operating without the JEDI program now cuts against its argument that it cannot secure the nation if the program does not move forward immediately. The court does not find, under the present circumstances, that the benefits of the JEDI program are so urgently needed that the court should not review the process to ensure the integrity of the procurement."
Campbell-Smith required Amazon to put up $42 million in bond for the DoD in case the injunction is found to have been wrongfully issued. That was the amount proposed by the DoD based on its estimate that the injunction could last at least six months, and that each month of delay could cost between $5 and $7 million.