Armed Forces News

The Pentagon’s inspector general found in a 313-page report that government officials followed “applicable law and acquisition standards” in awarding Microsoft Corp a $10 billion contract for the JEDI (Joint Enterprise Infrastructure Cloud) program, following allegations of political influence to steer the contract away from Amazon Web Services, as well as potential financial conflicts of interest.

“We reviewed the DoD’s decision to award the JEDI Cloud contract to a single contractor the development of the requirements in the Request for Proposals, the DoD’s source selection process, the disclosures of source selection and proprietary information after contract award, and whether the JEDI Cloud source selection was influenced by outside pressure,” the IG said in a press release.

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The IG report outlined how problems with the project emerged virtually from its onset in 2018, when two companies – IBM and Oracle of America Inc. – protested the initial request-for-proposal (RFP) process. Their complaints garnered attention on Capitol Hill and in several media reports, prompting the IG to interview key senior Pentagon leaders, including then-Defense Secretary James Mattis.

Several Pentagon leaders faced questions about their connections with companies involved with the process, to include Amazon Web Services, Inc., a subsidiary of the web-delivery giant. Amazon, for its part, alleged that the JEDI Cloud procurement process “was influenced by pressure from the White House against awarding the contract” to the company, owned by Jeff Bezos, who also owns the Washington Post which has sparred with the White House.

The IG said it could not reach a definitive conclusion on the question of undue political interference on the process, writing, “We sought to review whether there was any White House influence on the JEDI cloud procurement. We could not review this matter fully because of the assertion of a ‘presidential communications privilege,’ which resulted in several DoD witnesses being instructed by the DoD Office of General Counsel not to answer our questions about potential communications between White House and DoD officials about JEDI. Therefore, we could not definitively determine the full extent or nature of interactions that administration officials had, or may have had, with senior DoD officials regarding the JEDI Cloud procurement.”

The IG probe focused primarily on adherence to acquisition standards, possible disclosure of Microsoft’s proprietary information after the contract was awarded, and possible improper influence from the White House. It did not address whether Microsoft deserved the contract more than Amazon.

“Rather, we reviewed the source selection process and whether it was in compliance with applicable statutes, policies, and the evaluation process described in the Request for Proposals, and also whether it was influenced by outside pressure,” the IG report stated.

The investigation entailed more than 80 interviews with key players in the award process.

The RFP process terms were “reasonable” and addressed DoD capability and security requirements, and did not unduly restrict competition as well, the probe determined.

The Defense Department did not emerge completely unscathed. The IG found fault with “improper” disclosure to Amazon of Microsoft proprietary information, and it said that DoD selection team members’ names should have been redacted from reports that were given to both companies.

The IG also concluded that Stacy Cummings, a senior civilian Pentagon acquisition official, “violated ethical standards when she participated personally and substantially in a particular matter related to the JEDI procurement while owning shares of Microsoft stock.”

The report agreed with an earlier investigation that determined Cummings’ action did not affect the decision to award the contract to Microsoft. It recommended that Cummings’ superiors “consider appropriate action for [her] ethics violations, including potential counseling and training.”

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