By John D. McKinnon
WASHINGTON -- Pentagon officials are considering pulling the
plug on the star-crossed JEDI cloud-computing project, which has
been mired in litigation from Amazon.com Inc. and faces continuing
criticism from lawmakers.
The Joint Enterprise Defense Infrastructure contract was awarded
to Microsoft Corp. in 2019 over Amazon, which has contested the
award in court ever since.
A federal judge last month refused the Pentagon's motion to
dismiss much of Amazon's case. A few days later, Deputy Defense
Secretary Kathleen Hicks said the department would review the
project.
"We're going to have to assess where we are with regard to the
ongoing litigation around JEDI and determine what the best path
forward is for the department," Ms. Hicks said at an April 30
security conference organized by the nonprofit Aspen Institute.
Her comments followed a Pentagon report to Congress, released
before the latest court ruling, that said another Amazon win in
court could significantly draw out the timeline for the program's
implementation.
"The prospect of such a lengthy litigation process might bring
the future of the JEDI Cloud procurement into question," the Jan.
28 report said.
Ms. Hicks and other Pentagon officials say there is a pressing
need to implement a cloud program that serves most of its branches
and departments. The JEDI contract, valued at up to $10 billion
over 10 years, aims to allow the Pentagon to consolidate its
current patchwork of data systems, give defense personnel better
access to real-time information and put the Defense Department on a
stronger footing to develop artificial-intelligence capabilities
that are seen as vital in the future.
Some lawmakers and government-contracting experts say JEDI
should be scuttled because its single-vendor, winner-take-all
approach is inappropriate and outmoded for mammoth enterprises like
the Department of Defense.
These people say the Pentagon should move to an increasingly
popular approach to enterprise cloud-computing that includes
multiple companies as participants. Spreading out the work also
reduces the risk of legal challenges from excluded companies, they
say.
Rep. Steve Womack (R., Ark.) called on the Pentagon last week to
start fresh with a new contract-bidding process that would "enable
best-in-class capability by prioritizing the ongoing competition
that a cloud environment can promote."
Should the Pentagon scuttle JEDI, the government could seek to
patch together a new cloud program by expanding several existing
Defense Department information-technology contracts, said John
Weiler, a longtime JEDI critic who is executive director of the IT
Acquisition Advisory Council, a public-private consortium that
advises government and industry on tech-procurement best
practices.
Microsoft has acknowledged the problems created by the delays
but said it is ready to continue the project.
"We agree with the U.S. [government] that prolonged litigation
is harmful and has delayed getting this technology to our military
service members who need it," the company said. "We stand ready to
support the Defense Department to deliver on JEDI and other mission
critical DoD projects."
Amazon declined to comment for this article. The company has
contended in court that then-President Donald Trump exerted
improper pressure on the Pentagon to keep the contract from going
to Amazon because it is led by Jeff Bezos.
Mr. Trump has blamed Mr. Bezos for what he viewed as unfavorable
coverage of his administration in the Washington Post, which Mr.
Bezos bought in 2013 for $250 million. The Post says its editorial
decisions are independent.
At the time, the Trump White House referred questions to the
Pentagon, which denied that Mr. Trump or administration officials
had any impact on the selection process.
Before the latest court fight, Oracle Corp. -- one of the
original bidders -- had sued to halt the contract awarding process.
Its 2019 lawsuit claimed that an Amazon employee who worked for the
Pentagon in 2016 and 2017 helped steer the procurement process to
favor Amazon, which then hired him back.
A judge subsequently rejected those allegations, allowing the
bidding process to move forward.
Amazon has maintained that it got no favorable treatment from
the Pentagon at any point, but the issue resurfaced last week, with
Sen. Mike Lee (R., Utah) and Rep. Ken Buck (R., Colo.) sending a
letter requesting a Justice Department investigation into alleged
conflicts by that employee and others.
Last month, Sen. Chuck Grassley (R., Iowa) wrote a letter to
Pentagon officials raising concerns about the agency's oversight of
the project and seeking more details about alleged conflicts of
interest and possible improprieties, which some critics and rival
companies say might have skewed the initial procurement steps in
Amazon's favor.
Several of the concerns raised in both letters had been reviewed
previously. A federal judge in 2019 concluded that the former
Amazon employee "did not taint" the program.
A Pentagon inspector general report last year determined that
the Pentagon adviser didn't violate any ethical obligations or give
preferential treatment to Amazon.
Steven Schooner, a George Washington University law professor
who specializes in government contracting, said early questions
about the Pentagon's underlying procurement strategy for JEDI have
grown over time.
"And all of that is before this case became one of the most
jaw-dropping, head-scratching collections of conflicts of interest
imaginable," he said.
Write to John D. McKinnon at john.mckinnon@wsj.com
(END) Dow Jones Newswires
May 10, 2021 05:44 ET (09:44 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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