Federal JEDI contract with Microsoft halted after Amazon complains

A judge has ordered a temporary halt to a major Defense Department contract awarded to Microsoft after rival Amazon complained about the bidding process.

In a sealed legal document filed Thursday with the U.S. Court of Federal Claims, Judge Patricia Campbell-Smith said the Defense Department’s Joint Enterprise Defense Infrastructure (JEDI) contract is blocked “until further order of the court.” The decision comes just days after Amazon Web Services, the retail giant’s cloud computing arm, revealed in legal documents unsealed this week that it was seeking to depose President Donald Trump and Pentagon officials to obtain more information about the JEDI cloud bidding process.

Amazon has alleged that President Trump’s public hostility toward the company and its CEO, Jeff Bezos, improperly influenced the Pentagon’s decision in October to award the coveted cloud contract, worth up to $10 billion over 10 years, to Microsoft.

It’s unclear why Judge Campbell-Smith has blocked the JEDI contract from moving forward. One of the few details revealed in a public summary of the otherwise sealed filing was that Amazon must pay $42 million in “the event that future proceedings prove that this injunction was issued wrongfully.”

Microsoft spokesperson Frank Shaw said in a statement: “While we are disappointed with the additional delay we believe that we will ultimately be able to move forward with the work to make sure those who serve our country can access the new technology they urgently require. We have confidence in the Department of Defense, and we believe the facts will show they ran a detailed, thorough and fair process in determining the needs of the warfighter were best met by Microsoft.”

There was no immediate word from the judge about any future hearings about her temporary order. But she did ask both parties to file additional paperwork.

“We are disappointed in today’s ruling and believe the actions taken in this litigation have unnecessarily delayed implementing DoD’s modernization strategy and deprived our warfighters of a set of capabilities they urgently need,” Defense Department spokesperson Lt Col Robert Carver said in a statement. “However, we are confident in our award of the JEDI Cloud contract to Microsoft and remain focused on getting this critical capability into the hands of our warfighters as quickly and efficiently as possible.”

In its legal filing unsealed earlier this week, Amazon had accused President Trump of influencing the choice of the winner for the contract. The company said that Trump, who has spared with Bezos over reporting by his newspaper, the Washington Post, was biased against Amazon and had used his power to taint the selection process against it.

“The question is whether the President of the United States should be allowed to use the budget of the DoD to pursue his own personal and political ends,” Amazon said in a statement.