Litigation » Win For Amazon In Giant Defense Contract Dispute

Win For Amazon In Giant Defense Contract Dispute

Sunnyvale, CA, USA - Feb. 21, 2016: Amazon Lab 126. Amazon Lab126 is an inventive research and development company that designs and engineers high-profile consumer electronic devices.

February 20, 2020

The Court of Federal Claims has ordered the Pentagon to stop work on its cloud computing contract with Microsoft, a win for former bidder Amazon which asked for the delay. Amazon contends that it lost the Joint Enterprise Defense Infrastructure (JEDI) contract to Microsoft because of the tweets and remarks by President Trump disparaging the company and its founder, Jeff Bezos. Amazon argued that “it is common practice to stay contract performance while a protest is pending and it’s important that the numerous evaluation errors and blatant political interference that impacted the JEDI award decision be reviewed.” The ruling is sealed, but a summary posted on the Public Access to Court Electronic Records website said the Pentagon is “hereby preliminarily enjoined from proceeding with contract activities … until further order of the court.” Amazon must provide $42 million in security to cover costs and damages if future proceedings show the injunction was issued wrongfully, the summary says. Last October, Microsoft won the contract, which could be worth up to $10 billion over 10 years if all options are exercised. It will establish a common computing and data storage system for the military and allow for secure information sharing across the Defense Department, so intelligence can be shared among different platforms. Trump’s public feud with Bezos and Amazon began before he became president, including remarks he made at a campaign rally in 2016 predicting trouble for the company if he wins the White House. “Oh do they have problems. They are going to have such problems,” he said.

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