Amazon tries to stop Microsoft from starting work on DoD contract

Amazon will seek a temporary injunction against Microsoft on the $10-billion cloud computing contract Microsoft won from the Department of Defense.

Rama Venkat had the news for Reuters:

Amazon.com Inc (AMZN.O) will ask a judge to temporarily block Microsoft Corp (MSFT.O) from working on a $10 billion cloud contract from the Pentagon, a court filing showed on Monday.

Amazon, which was seen as a favorite for the contract, plans to file a motion for a temporary restraining order on Jan. 24 and a federal court will issue its decision on Feb. 11, according to the filing.

The e-commerce giant has blamed U.S. President Donald Trump of exerting “improper pressure” and bias that led the U.S. Department of Defense (DoD) to award the Joint Enterprise Defense Infrastructure Cloud (JEDI) contract to Microsoft.

The Department of Defense has stood by its decision, with its Secretary Mark Esper rejecting any suggestion of bias and saying the decision was conducted freely and fairly, without any outside influence.

CNN’s Brian Fung reported:

The request is part of Amazon’s ongoing challenge to the Trump administration over the way the contract was awarded, which it argues was influenced by President Donald Trump’s dislike of Amazon CEO Jeff Bezos and the Washington Post, which Bezos owns. Amazon (AMZN) was widely believed to be the front-runner to win the Pentagon’s business, before Trump vowed to take “a strong look” at the deal. It lost the contract to Microsoft’s Azure cloud business in October.

The contract — called Joint Enterprise Defense Infrastructure, or JEDI — involves providing cloud storage of sensitive military data and technology, such as artificial intelligence, to the Department of Defense, and could result in revenue of up to $10 billion over 10 years.

After Trump’s remarks, the Defense Department launched a review of the JEDI contract. Defense Secretary Mark Esper recused himself from the review less than a month before the contract was awarded, citing his son’s employment at IBM — which had also briefly been in the running for JEDI.

The Pentagon said it chose Microsoft because the company would help improve the “speed and effectiveness with which we develop and deploy modernized technical capabilities to our men and women in uniform.”

Isobel Asher Hamilton from Business Insider noted:

Previously Amazon had been tipped as the frontrunner to win the contract, and the company maintains that it lost out due to interference from President Trump, who has a longstanding animosity towards Amazon and its CEO Jeff Bezos whom he gleefully dubbed “Jeff Bozo” when news of Bezos’ divorce broke last year.

Microsoft CEO Satya Nadella on Monday attributed the company’s win to its so-called “hybrid cloud,” a.k.a. mixing pure cloud computing with on-site computing.

Amazon filed its first legal complaint disputing the decision in November, claiming it had been the victim of “clear deficiencies, errors, and unmistakable bias.”

This new legal challenge, filed in a federal court on Monday, is designed to block Microsoft from performing any substantial work on JEDI until Amazon’s first lawsuit is resolved.

Microsoft will move to dismiss the case, according to Bloomberg.

The judge has been asked by the companies to rule on Amazon’s newest filing by February 11. Neither Amazon nor Microsoft were immediately available for comment when contacted by Business Insider.