Judge Grants Pentagon Right to Revisit Some JEDI Contract Terms

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(Bloomberg) -- A U.S. judge granted a Pentagon request to reconsider parts of its decision to award Microsoft Corp. a controversial $10 billion cloud-computing contract that’s under a legal challenge from rival Amazon.com Inc.

In a sealed filing on Friday, Judge Patricia Campbell-Smith of the U.S. Court of Federal Claims paused court proceedings on Amazon’s lawsuit while the Defense Department revisits the JEDI contract for 120 days. She left open the door for the Pentagon to ask for more time.

Government lawyers asked the court last month for permission for the Pentagon to “to reconsider certain aspects” of the procurement, including elements of the bidders’ price proposals and online marketplaces. The Pentagon’s request came after Campbell-Smith wrote in March that the Defense Department might have misjudged part of Microsoft’s pricing proposal for the project.

Faced with the prospect that the Defense Department will be able to strengthen its case for the award to Microsoft by resolving the judge’s concerns, Amazon had sought a broader review. It said the government should be required to examine other alleged errors and let bidders revise more of their price proposal.

Pentagon spokesman Robert Carver said in a statement that the Defense Department is pleased with the court’s action and plans to amend the solicitation and “allow for limited proposal revisions and a reevaluation of the proposals.”

Amazon Web Services, Amazon’s cloud unit, filed a lawsuit in November alleging that political interference by President Donald Trump cost the company the cloud deal. Amazon said in the suit that the Defense Department failed to fairly judge its bid because Trump viewed Amazon Chief Executive Officer Jeff Bezos as his “political enemy.”

On Wednesday, the Pentagon’s inspector general’s office said it found no evidence that the Defense Department’s award decision was the result of interference from Trump, though it said its probe was limited by the White House.

Amazon’s lawsuit seeks to prohibit the Defense Department from proceeding without a new evaluation or award decision. The Pentagon’s JEDI project is designed to consolidate the department’s cloud-computing infrastructure and modernize its technology systems.

©2020 Bloomberg L.P.

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