Pentagon: $10B cloud contract that snubbed Amazon was legal

FILE - This March 27, 2008, aerial file photo, shows the Pentagon in Washington.  The Pentagon is reconsidering its awarding of a major cloud computing contract to Microsoft after rival tech giant Amazon protested what it called a flawed bidding process. U.S. government lawyers said in a court filing this week of March 13, 2020  that the Defense Department wishes to reconsider its award decision and take another look at how it evaluated technical aspects of the companies' proposals to run the $10 billion computing project. (AP Photo/Charles Dharapak, File)
FILE - This March 27, 2008, aerial file photo, shows the Pentagon in Washington. The Pentagon is reconsidering its awarding of a major cloud computing contract to Microsoft after rival tech giant Amazon protested what it called a flawed bidding process. U.S. government lawyers said in a court filing this week of March 13, 2020 that the Defense Department wishes to reconsider its award decision and take another look at how it evaluated technical aspects of the companies' proposals to run the $10 billion computing project. (AP Photo/Charles Dharapak, File) (AP2008)

WASHINGTON – The Pentagon's process for awarding a highly lucrative cloud computing contract to Microsoft instead of Amazon was in line with legal and government purchasing standards, a government watchdog agency said Wednesday.

The Defense Department inspector general found no evidence of White House interference in the contract award process. But the report said investigators could not fully review that aspect of the matter because the White House would not allow unfettered access to witnesses.

The contract, potentially worth $10 billion, was awarded to Microsoft last October, prompting tech rival Amazon to cry foul.

Amazon Web Services, a market leader in providing cloud computing services, had long been considered a leading candidate to run the Pentagon’s Joint Enterprise Defense Infrastructure project, known as JEDI. The project will store and process vast amounts of classified data, allowing the U.S. military to improve communications with soldiers on the battlefield and use artificial intelligence to speed up its war planning and fighting capabilities.

Amazon sued the Pentagon after Microsoft won the contract. Work on the project has been halted as the lawsuit proceeds.

The judge presiding over the bid protest in the U.S. Court of Federal Claims said in March that Amazon’s challenge likely had merit on some technical grounds involving pricing.

The review released Wednesday by the Defense Department's inspector general did not draw a conclusion about whether the Redmond, Washington-based Microsoft Corp. was appropriately declared the winner. Rather, it looked at whether the decision-making process was proper and legal. It also examined allegations of unethical behavior by Pentagon officials involved in the matter and generally determined that any ethical lapses did not influence the outcome.

The review also sought to determine whether the White House influenced the Pentagon's decision, as Amazon has alleged. The report said that although it appears there was no such White House pressure, the reviewers could not definitely determine the full extent of White House interactions with the Pentagon's decision makers.