The Pentagon is delaying the award of a $10 billion cloud contract that pitted multiple tech giants against one another in a lengthy battle.
The decade-long contract, dubbed JEDI (Joint Enterprise Defense Infrastructure Cloud), is intended to provide cloud computing services to the Defense Department. Amazon (AMZN) - Get Report , Microsoft (MSFT) - Get Report , IBM (IBM) - Get Report and Oracle (ORCL) - Get Report had jockeyed fiercely for the deal, and as of April, Amazon and Microsoft were reportedly the last in the running for the winner-take-all contract.
Now, Defense Secretary Mark Esper, who assumed his post on July 23, has opted to put the contract award on hold until he looks into the JEDI program. In a statement to Politico, a Pentagon spokesperson said that "keeping his promise to members of Congress and the American public, Secretary Esper is looking at the Joint Enterprise Defense Infrastructure (JEDI) program. No decision will be made on the program until he has completed his examination."
The Pentagon did not provide a more detailed rationale for the delay, but in a recent press conference, President Trump cited "tremendous complaints" about the bidding process and said that he asked officials to look into the matter. Presidential intervention in Pentagon contracts is unusual, and Trump has also regularly griped about Amazon and its CEO, Jeff Bezos, for various reasons throughout his term.
In December, Oracle sued the Defense Department over claims that the JEDI bidding process unfairly favored Amazon. A judge ruled in favor of the Defense Department in July, concluding that Oracle did not meet the qualifications.
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