Pentagon asks to reconsider Microsoft cloud-computing contract challenged by Amazon

Jeff Bezos
Amazon Chief Executive Jeff Bezos.
(Jim Watson / AFP/Getty Images)

Government lawyers are asking a federal judge for permission to reconsider the Pentagon’s decision to award Microsoft Corp. a controversial $10-billion cloud contract after a legal challenge from Inc.

In a filing to the U.S Court of Federal Claims on Thursday, the Defense Department said it was seeking “120 days to reconsider certain aspects of the challenged agency decision.”

Amazon Web Services, Amazon’s cloud unit, filed a lawsuit in November alleging political interference by President Trump cost the company the cloud deal. The contract is worth up to $10 billion over a decade.

Among the issues the Defense Department wants to reevaluate are parts of the bidders’ price proposals and online marketplaces.

“During the proposed remand, the agency could make decisions that would moot this action, in whole or in part, and may obviate the need for further litigation in this court,” the government said in court papers made public on Thursday night.


“A remand here is in the interests of justice because it will provide the agency with an opportunity to reconsider the award decision at issue in light of AWS’s allegations, this court’s opinion and any new information gathered during the proposed remand.”

The federal judge overseeing Amazon’s challenge of its loss to Microsoft the cloud-computing contract has said the Defense Department might have misjudged Microsoft’s pricing proposal for the work.

It’s likely Amazon’s “chances of receiving the award would have increased” if it weren’t for the Pentagon’s errors, Federal Claims Judge Patricia Campbell-Smith said.

Amazon said in the suit that the Defense Department failed to fairly judge its bid because Trump viewed Amazon Chief Executive Jeff Bezos as his “political enemy.”

Amazon asked the court to allow it to question Trump, Defense Secretary Mark Esper, former Defense Secretary James N. Mattis, and Dana Deasy, the Pentagon’s chief information officer.

Amazon spokesman Drew Herdener said in a statement on Thursday night that the company was “pleased that the DoD has acknowledged ‘substantial and legitimate’ issues that affected the JEDI award decision, and that corrective action is necessary.”

Frank Shaw, a Microsoft spokesman, said in a statement that the company believes the Pentagon “made the correct decision” when it awarded the contract. “However, we support their decision to reconsider a small number of factors as it is likely the fastest way to resolve all issues and quickly provide the needed modern technology to people across our armed forces,” he added.

Representatives of the Defense Department didn’t immediately respond to a request for comment.