The recent tweets by President Trump railing against Amazon could have very real repercussions for the tech giant, which is currently considered the front-runner to land a $10 billion cloud services contract with the Pentagon.
A story today by Vanity Fair cited inside sources who claimed Trump was looking for any way to damage Amazon, CEO Jeff Bezos, and The Washington Post. The story also noted that advisors were suggesting Trump cancel “Amazon’s pending multi-billion contract with the Pentagon to provide cloud computing services, sources say.”
However, that description isn’t quite right. The contract is not Amazon’s and it’s not “pending.” Rather, Amazon has been considered the likely winner of a contract that was controversial well before Trump began unleashing a fusillade of anti-Amazon invective on Twitter.
Last month, the Pentagon laid out the specifications for an overhaul of its IT systems known as “Joint Enterprise Defense Infrastructure” or … wait for it … “JEDI.”
The Department of Defense noted that it received “1,089 comments from 46 vendors, 2 associations, and 3 government agencies in response to the first draft solicitation.” While the DOD did not release those comments, numerous vendors have been complaining about the decision to award the project via a single contract that is so massive the assumption is that only Amazon Web Services may be able to fulfill it.
For instance, Microsoft released a statement saying: “We believe the best approach is one that leverages the innovations of multiple cloud service providers. Therefore, we are disappointed to learn today that DOD, in its draft cloud RFP, is pursuing a single cloud solution.”
The reaction from industry prompted Congress to request that the DOD explain why it choose this approach. As part of the recent budget bill passed by Congress, there was a report included that requested Defense officials provide two additional reports explaining its procurement decision and its strategy behind JEDI.
“This effort would be a tailored acquisition for commercial cloud services that could be a single award indefinite delivery/indefinite quantity contract for a period of up to ten years,” the Congressional report says. “There are concerns about the proposed duration of a single contract, questions about the best value for the taxpayer, and how to ensure the highest security is maintained.”
All this coincides with Trump’s growing tweetstorms, accusing Amazon of ripping off the U.S. Postal System, failing to pay enough state retail taxes, and helping spread “fake news” against him through the Post, which is owned by Bezos. Whether it’s a vendetta against Bezos or anger that the collapsing retail sector is hurting the value of various Trump-owned properties, it appears that Trump will continue his jihad.
The DOD is supposed to make its decision on a vendor soon for JEDI. But don’t be surprised if that gets delayed amid Trump’s tweets and Congressional questions. Of course, the perception of a president using the power of the office to attack a company causing him financial harm may ultimately restrain Trump.
But it’s clear that what appeared to be a slam dunk for Amazon, and a massive win for its bottom line, has gotten a whole lot more messy and uncertain.