Report: Trump Mulls Eliminating Amazon’s $10 Billion Pentagon Contract

HANOVER, GERMANY - MARCH 14: Visitors arrive at the cloud pavillion of Amazon Web Services
Sean Gallup/Getty
Matthew Boyle
Washington, D.C.

President Donald Trump is considering stepping in to eliminate Amazon’s looming $10 billion contract with the Pentagon for cloud computing, Bloomberg News reports.

“President Donald Trump recently demanded more information about how the Pentagon crafted a massive cloud-computing contract it’s poised to award to Amazon.com Inc. or Microsoft Corp., in order to decide whether he should intervene,” Bloomberg reported late Wednesday. The story continued:

The Defense Department is set to give the contract, worth as much as $10 billion over ten years, to one of the two companies next month. Amazon, whose cloud-computing technology leads the market, is seen as the favorite. But Trump recently was made aware of letters Republican members of Congress have written to the White House and military leaders complaining that the contract’s terms froze some companies — including Oracle Corp. — out of the competition, according to two people familiar with the matter. Trump expressed frustration he wasn’t aware of the concerns and asked aides to show him the correspondence, the people said.

On Thursday, President Trump’s son Donald Trump, Jr., tweeted about the contract, too, ripping it as “No Bid Bezos” and as “shady and potentially corrupt practices” by Amazon:

Other allies of the president like Turning Point USA’s Charlie Kirk also weighed in Thursday:

Trump himself on Thursday criticized Amazon in comments to reporters, saying that he may investigate the contract:

“I’m getting tremendous complaints about the contract with the Pentagon and with Amazon, they’re saying it was not 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, having to do with the cloud, and having to do with a lot of other things, and we’re getting tremendous, really, complaints from other companies and from great companies, some of the greatest companies in the world are complaining about it, having to do with Amazon and the Department of Defense, and I will be asking them to look at it very closely to see what’s going on, because I have had very few things where there has been such complaining,” Trump said on Thursday. “Not only complaining from the media or at least asking questions about it from the media but complaining from different companies like Microsoft, and oracle and IBM, great companies are complaining about it, so we’ll take a very strong look at it.”

Two GOP senators, Sens. Marco Rubio (R-FL) and Ron Johnson (R-WI), have raised concerns with the way Amazon has seemingly had the wheels greased to get the lucrative contract.

Rubio, in a letter to National Security Adviser John Bolton, urged the White House to step in and delay the awarding of the contract to Jeff Bezos’ Amazon. He wrote:

Unfortunately, the Department of Defense’s (DoD) Joint Enterprise Defense Infrastructure (JEDI) cloud computing procurement suffers from a lack of competition. This, it is feared, will result in wasted taxpayer dollars and fail to provide our warfighters with the best technology solutions. JEDI has the potential to be a $10 billion, 10-year contract. This type of fiscal and time commitment should demand a procurement steeped in competition and conducted without bias toward any one vendor. However, DoD has used arbitrary criteria and standards for bidders. Even though 200 companies were initially interested, DoD instituted such a restrictive criteria that only four companies bid on JEDI. DoD then further used the arbitrary criteria to eliminate two of the bidders, IBM and Oracle, leaving only Amazon and Microsoft. And in the end, DoD plans to award this massive contract to a single vendor, even though multiple vendors would ensure continuing price competition and access to the latest innovations.

Johnson–the chairman of the Senate Homeland Security Committee–wrote a similar letter to acting Defense Secretary Mark Esper on June 24, after his predecessor Pat Shanahan came under scrutiny over the Amazon contract. While there were also personal life issues with Shanahan, sources familiar with the matter say the Amazon contract was the primary reason why he stepped aside as acting Defense Secretary and withdrew his nomination to be the full-time Defense Secretary before the U.S. Senate could even begin the confirmation process.

Johnson’s letter to Esper noted the Inspector General at the Pentagon is investigating the contracting process, and the lack of competition in it, and asked for him to delay the awarding of the contract to Amazon until the Inspector General investigation is complete.

Bloomberg’s story quotes Johnson as confirming he specifically raised this issue, and the potential corruption surrounding the contract, in a conversation with President Trump aboard Air Force One.

“He wanted to understand what the issues were, what our concerns were,” Johnson said of his conversation with Trump.

Rubio also spoke with the president about the contract, according to Bloomberg, and the president was leaning toward canceling Amazon’s special contract:

Trump and Rubio spoke about the contract by phone the next day, a Rubio spokesman said.

A person familiar with the call said that it sounded as if Trump was thinking about canceling the contract.

The JEDI contract has drawn bipartisan opposition, too, as Sen. Elizabeth Warren (D-MA)–a 2020 presidential contender–has spoken out against it.

Other left-wing figures have been critical of the Amazon giveaway as well:

It remains to be seen what will happen next, but President Trump could very well end this–and get a huge amount of credit from both sides of the aisle in doing so.

COMMENTS

Please let us know if you're having issues with commenting.