Pentagon forced to halt work on $10bn Microsoft contract after Amazon claims that Trump interfered

  • 2/14/2020
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The Pentagon has been forced to suspend work on a multi-billion dollar military contract awarded to Microsoft after a legal challenge from Amazon, which has claimed it lost out on the deal due to a personal feud between Donald Trump and its chief executive Jeff Bezos. A judge ordered a block on the Joint Enterprise Defense Infrastructure (JEDI) initiative, a huge effort to modernise the US military’s computer systems, which the Department of Defense had awarded to Microsoft in October. Amazon, whose cloud computing division is the industry’s largest player, had been seen as a frontrunner for the deal. It had appealed the decision, alleging an “unmistakable bias” in the decision which it attributed to the US President’s dislike of Mr Bezos. Mr Trump has repeatedly attacked the Washington Post newspaper, which Mr Bezos owns, as well as accusing Amazon of harming the US postal service. Earlier this week Amazon said it wanted the President to testify over how the contract was awarded. Shares in Microsoft fell slightly, while Amazon’s rose marginally, after a federal judge approved Amazon’s request for a temporary block on the deal until further notice. Amazon must pay $42m (£32m) for any costs and damages that may be incurred if its appeal is found to be frivolous. The JEDI contract has been hotly contested not only because it is worth an estimated $10bn, but also because the green light from the US military would be a significant vote of confidence that any winner could use to win further deals. Mr Trump said last summer that he was looking at the deal after companies that missed out on the shortlist for the contract, including Oracle and IBM, complained about the process. Microsoft said: "While we are disappointed with the additional delay we believe that we will ultimately be able to move forward with the work to make sure those who serve our country can access the new technology they urgently require. "We have confidence in the Department of Defense, and we believe the facts will show they ran a detailed, thorough and fair process in determining the needs of the warfighter were best met by Microsoft."

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