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Judge Sides With Amazon, Orders Pentagon to Halt Work on JEDI

A federal judge approved late Friday Amazon's request for a preliminary injunction to halt Microsoft's work on the Defense Department's $10 billion computer upgrade contract, finding that the Pentagon incorrectly evaluated pricing from the two companies' competing bids.

(CN) — A federal judge agreed to halt Microsoft's work on a $10 billion computer upgrade contract for the Defense Department, ruling late Friday that the Pentagon incorrectly evaluated pricing from Microsoft and Amazon's competing bids.

Judge Patricia Campbell-Smith of the U.S. Court of Federal Claims ordered the government to stop work on the JEDI contract, short for Joint Enterprise Defense Infrastructure, a project meant to modernize Defense Department computer systems.

President Donald Trump ordered the contract to be put on hold in August 2019, asking the Pentagon to investigate claims of favoritism toward Amazon. Two months later, the DOD announced that Microsoft had been awarded the project.

Campbell-Smith wrote that Amazon's lawsuit over Trump's interference "is likely to succeed on the merits of its argument that the DOD improperly evaluated" the bids. She said in her ruling that Amazon would have had a better chance to win the contract if the Pentagon didn't make the pricing error.

“In the context of a procurement for cloud computing services, the court considers it quite likely that this failure is material,” she said.

A spokesman for Microsoft said they disagreed with the judge's reasoning.

“The decision disagreed with a lone technical finding by the Department of Defense about data storage under the evaluation of one sub-element of one price scenario,” Microsoft spokesman Frank Shaw said in a statement Friday.

He added: “While important, there were six pricing scenarios, each with multiple sub-elements, and eight technical factors, each with numerous subfactors evaluated during the procurement. The decision does not find error in the Department of Defense’s evaluation in any other area of the complex and thorough process that resulted in the award of the contract to Microsoft.”

Amazon claims that Trump improperly interfered with the company's bid, citing public statements made against the company and its owner Jeff Bezos. Bezos also owns The Washington Post, which has written several stories about turbulence within the Trump administration.

The company has asked to depose Trump as well as Defense Secretary Mark Esper. In a recent interview with trade publication Defense One, Esper said Trump did not pressure him to award the contract to Microsoft over Amazon.

“The decision to conduct a review early on is a decision I made — I made — based on as I conducted my rounds on The Hill before my nomination process, I heard a lot from members on both sides of the aisle. Obviously, a lot was in the media as well,” he said in the interview. “I knew that it was something I needed to learn a great deal about."

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