Concerns from Trump, GOP lawmakers could jeopardize Pentagon's JEDI proposal

Concerns about the contract process and potential conflicts of interest cloud the future of the $10 billion contract that seemed bound for Amazon or Microsoft.
Image: The Pentagon building on Sept. 24, 2017
The Pentagon’s Joint Enterprise Defense Infrastructure, or JEDI, program, would house all Defense Department data and services on a cloud-based service.Bill Clark / CQ Roll Call via AP Images file

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By Leigh Ann Caldwell and Carol E. Lee

WASHINGTON — Concerns from President Donald Trump and some members of Congress are jeopardizing a massive, multibillion-dollar contract for a cloud computing program at the Department of Defense that has been poised to be awarded to Amazon or Microsoft.

The president has raised questions about the contract with at least two senators in recent days, a troubling signal for the $10 billion contract to build the Pentagon’s Joint Enterprise Defense Infrastructure, or JEDI, program, which would house all Defense Department data and services on a cloud-based service.

Asked about the program in the Oval Office by reporters Thursday, Trump discussed his concerns for the first time publicly.

"I'm getting tremendous complaints about the contract with the Pentagon and Amazon," he said. "They're saying it wasn't competitively bid, this is going on for a long time, I guess probably before this administration. And we're looking at it very seriously, it's a very big contract, one of the biggest ever given."

Critics, including lawmakers with oversight of the department, have expressed concern that the contract proposal process shut some potential companies out and that the program poses a long-term risk to national security because it consolidates information under one company.

Trump discussed the issue with Sen. Ron Johnson, R-Wisc., chairman of the Senate Homeland Security Committee, aboard Air Force One on Friday on the way to a trade event in Milwaukee, according to Johnson. Trump also called Sen. Marco Rubio, R-Fla., who is a member of the Foreign Relations Committee, about the issue later Friday, Rubio’s spokesman Nick Iacovella said.

Johnson and Rubio are two among half a dozen lawmakers who have raised questions in letters to administration officials about the lack of competitive bidding and possible conflicts of interest in the process.

Amazon is widely regarded as the leading contender for the contract but Microsoft is also in the running. Two other companies, Oracle and IBM, were eliminated early on in the process.

Johnson would not characterize the president’s concerns but said Trump is knowledgeable about the pending contract. “The president’s aware” of the concerns and asked to see the letters “directly,” he said.

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Iacovella told NBC News that after Rubio’s conversation with the president, the senator was under the impression that Trump was considering canceling the contract.

Neither the White House nor the Defense Department has responded to requests for comment.

The president has long feuded with Amazon’s owner Jeff Bezos, who also owns The Washington Post. In January, the president called him Jeff “Bozo” in a tweet, adding, “Hopefully (The Washington Post) will soon be placed in better, more responsible hands!”

If Trump or the White House were to intervene, it would be inappropriate and highly unusual because it’s an issue for Congress and the Pentagon, said Evelyn Farkas, a former deputy assistant secretary of defense under President Barack Obama.

“This is for Congress and the Defense Department to sort out, and given the president’s history of tension with Jeff Bezos, it would look like political interference,” she said.

The Pentagon is in the final stages of the bidding process for the 10-year, $10 billion contract for the cloud computing system. Those familiar with the process say Amazon is the only company that meets all the requirements for the contract and is the favorite to win it.

The initial contract process began under Obama but it was officially opened for bids in August 2018. Both Defense Secretaries Jim Mattis and Patrick Shanahan defended the program. Shanahan, before he stepped down, told Congress earlier this year that the bidding process is not anti-competitive. He said this cloud is for “a very small subset of the amount of cloud infrastructure we’re going to have to build out over time.”

But the bidding process has been controversial since it began and some companies in the cloud computing industry, including Oracle, balked at the contract's requirements and that the Pentagon intended to use a single vendor for such a massive project, ignoring what they said were best practices.

And there have been conflict of interest concerns. Johnson wrote a letter June 24 to acting Defense Secretary Mark Esper that said, “apparently, at least two DOD employees who played a role in the JEDI procurement process had connections to a company bidding on the contract.”

A federal judge rejected that argument in a decision Friday in a case brought by Oracle, noting that the company didn’t meet the requirements to win the contract. The Defense Department's Office of Inspector General is conducting its own investigation as requested by Reps. Steve Womack, R-Ark., and Tom Cole, R-Okla.

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, has been in contact with the Pentagon as well over the concerns but has not been satisfied with the answers so far. He advocates that the Pentagon start the process over.

"There are so many questions here, with the JEDI cloud computing contract, that the department ought to just start over," Grassley said.

He and Johnson believe that at the very least, the Pentagon should hold off until the inspector general completes its investigation.

Rubio wrote to John Bolton, Trump’s national security adviser, last week that a one-vendor contract stymies innovation and competition. “Competition ensures vendors will continuously integrate innovations that improve cost, capability, and security for DOD,” he wrote.

And the House Appropriations Committee wrote in its defense funding bill that it will not fund the JEDI program until the Pentagon gives to Congress a plan to eventually transition to a multicloud computing system. And the committee wants quarterly reports on the implementation of the cloud computing strategy.

Courtney Kube and Hallie Jackson contributed.