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Judge blocks Microsoft’s Pentagon contract after Amazon claim Trump interfered to snub them

Building 92 at Microsoft Corporation headquarters in Redmond, Washington. (Coolcaesar, Wikimedia Commons/Released)
February 13, 2020

A federal judge has temporarily blocked Microsoft from moving forward with a $10 billion contract after Amazon filed a lawsuit alleging President Donald Trump unfairly interfered in the bidding process to keep Amazon Web Services from winning the contract.

In a Thursday notice, a federal judge ordered an injunction on Microsoft, stopping the tech company from fulfilling the Pentagon’s Joint Enterprise Defense Infrastructure (JEDI), CNBC reported. The JEDI contract is an effort to update the Pentagon’s IT operations with new cloud computing technology.

The injunction comes just days after Amazon called for a chance to depose Trump along with former Defense Secretary Jim Mattis and current Defense Secretary Mark Esper.

Amazon alleges Trump sought to snub the company from winning the contract as a result of Trump’s disdain for Amazon founder and CEO Jeff Bezos. Trump has previously criticized Bezos, who also owns the Washington Post, for steering negative media coverage against his presidency.

Amazon’s complaint against is also bolstered by claims raised in Mattis’ recent White House memoir, that Trump ordered him to “screw over Amazon.”

In July, Trump publicly indicated he had concerns that Amazon benefitted unfairly from conversations with Mattis and other Defense Department officials. IBM and other companies reportedly raised those concerns, that Amazon’s conversations with military officials may have amounted to their own unfair influence in bidding for the JEDI contract.

Amazon lawyers have denied their conversations with Mattis and other defense officials garnered “preferential treatment,” towards their bid for the JEDI contract.

As part of the new injunction, Amazon Web Services was reportedly told to earmark $42 million to pay for “costs and damages” if it turns out the judge wrongfully issued the injunction against Microsoft. Amazon will have to affirm that it has the $42 million in funds ready by Feb. 20, and both Amazon and Microsoft must respond to the latest court filing by Feb. 27.

Microsoft has reportedly been expanding its staff ever since it won the $10 billion defense contract, including seeking out workers with past defense and security experience.

“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,” Frank Shaw, Microsoft’s corporate vice president of communications, said in a statement to CNBC. “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.”

Jay Carney, Amazon’s top spokesperson and a former press secretary for President Barack Obama, said Wednesday that Amazon was taking up its complaint to ensure the government awards contracts in a way that is “free of political interference.”

“All we’re trying to do through this protest and this request for a legal review is to ensure that a proper decision was made on behalf of U.S. taxpayers,” Carney told CNBC.