Microsoft wins US$10 billion Department of Defense contract

Amazon made a decision to open a second headquarters in Northern Virginia ahead of what was expected to be the award of a massive $10 billion contract from the Pentagon.

For over a year, the acrimonious contract award process for the Joint Enterprise Defense Infrastructure (JEDI) contract set off a showdown among Amazon, Microsoft Corp., Oracle Corp. and IBM Corp. and involved conflict of interest allegations, legal challenges and intense lobbying.

The contract outlines the Join Enterprise Defense Infrastructure deal, or JEDI, which is a huge win for Microsoft, because it's central to the Pentagon's efforts to catch its internal structure up with 21st century technology.

In July, Trump said the administration was reviewing Amazon's bid after complaints from other companies. There has been some speculation, however, that President Trump's personal feelings towards Amazon founder and CEO Jeff Bezos may have contributed to the decision.

"AWS is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly led to a different conclusion", Drew Herdener, a spokesman for the company, told reporters.

The announcement reportedly came as a surprise to some, as Amazon Web Services had been labeled the favourite to receive the contract. "We remain deeply committed to continuing to innovate for the new digital battlefield where security, efficiency, resiliency and scalability of resources can be the difference between success and failure".

After Judge Eric Bruggink dismissed its case amidst the previously pending contract period, Oracle is now appealing the decision alleging that Oracle couldn't be harmed during the JEDI contract and that the contract's requirements didn't accurately follow acquisition regulations in the DoD's decision to make the JEDI cloud a single award. Based on both companies' earnings reports last week, Synergy Research Group expects Amazon to boost its share of the market to about 33.5% and Microsoft to rise to around 16.5%.

"For over 40 years, Microsoft has delivered innovative, proven and secure technologies to the US Department of Defense (DoD)". Mattis didn't do what Trump asked, Snodgrass wrote.

The White House did not respond to a request for comment.

While Microsoft was announced as the victor, it's a safe bet that Amazon will be contesting that decision with Government Accountability Office until the protest window closes, based on Trump's hostility to Bezos. The watchdog agency, which was leading a review by "multidisciplinary team of auditors, investigators, and attorneys", was aiming to have its work done by the end of November.

"We look forward to expanding our longstanding partnership with DoD", Microsoft's U.S. Regulated Industries President Toni Townes-Whitley said in a statement, calling the evaluation process rigorous.

The expected date of completion for this particular project is October 24, 2029. Microsoft shares rose 0.6% to $140.73 at Friday's close. Bloomberg's Naomi Nix has more on "Balance of Power".

Oil Falls as Sinking Demand Outweighs Stimulus Hopes
How is Wilson Community College responding to COVID-19?