Amazon Could Challenge Loss Of $10 Billion Pentagon Cloud Deal As Early As Next Week

Date:  Wed, October 30, 2019

Source: finance.yahoo.com

Author: Nandita Bose

 

 

 

 

WASHINGTON (Reuters) - If Amazon.com chooses to fight the Pentagon's decision to present a highly contested $10 billion (£7.78 billion) cloud computing contract to Microsoft, it is likely to happen as early as next week. A challenge to the Défense Department's award announced Friday is predicted widely by legal experts, analysts and consultants, especially after President Donald Trump publicly derided Amazon's bid for the high-stakes contract. In July, Trump said the administration was revising Amazon's bid after receiving complaints from other companies. Previously, Amazon was widely perceived as a front-runner. Trump who also owns the Washington Post has repeatedly taken swipes at Amazon and its founder Jeff Bezos.

 

For over a year, the acrimonious contract-award process for the Joint Enterprise Defense Infrastructure (JEDI) contract, set off a showdown among Amazon, Microsoft Corp, Oracle Corp and IBM Corp and involved conflict of interest allegations, legal challenges and intense lobbying. In a statement, Amazon Web Services said that it was "surprised about this conclusion."

 

A person familiar with the issue told Reuters the company is considering options for protesting the award. The company did not respond to requests for comment on its plans. Reuters spoke to several legal experts who said that the company has two options. It could go to the U.S. Government Accountability Office (GAO) - a legislative branch of the government that offers auditing services, which could offer an immediate stay. Amazon could also go to the U.S. Court of Federal Claims, which could allow it to strengthen its case through discovery.

 

Michael Hordell : An attorney who works with Barnes and Thornburg LLP Amazon said that Amazon has three calendar days to request a debriefing. This is a process in which the government explains to Amazon why it was unsuccessful and shares details on the evaluation process.

 

The debriefing could also get extended by a few days if the Défense Department allows additional questions after offering an explanation. This is a new move the agency has allowed in the past, the attorneys said.

 

Hordell also added that after the Pentagon has answered Amazon's questions, the company has five calendar days to file a "protest" with the GAO.

 

The attorneys said that If the company is not pleased with the GAO's decision, Amazon could also go to the United States Court of Federal Claims. It could also skip going to the GAO altogether. Another alternative for Amazon is to file a protest with the Department of Défense, but all attorneys Reuters spoke to said that is highly unlikely.

 

 

AN AUTOMATIC STAY

 

 

If Amazon goes to the GAO, it can get an "automatic stay of performance," said Franklin Turner, an attorney with McCarter & English LLP.

 

That gives the GAO 100 days to make a decision, Turner said.

 

If the company goes to the court, it does not get an automatic stay and has to file a preliminary injunction. This is an order that may be granted before or during trial, with the goal of preserving the status quo before final judgment.

 

The court, on the other hand, allows for "discovery": A process which allows an aggrieved party to obtain evidence by requesting additional documents and depositions.

 

The direction of the company's legal fight could further be determined by a set of documents and evidence that the Défense Department will need to present to the company after Amazon files its protest. If Amazon doesn’t receive all documents and evidence it wants, the company reserves the rights to either file a supplemental protest at the GAO or could go to the court, the attorneys said.

 

Some of the attorneys and analysts said that, if Amazon is likely to fight the decision it is only to show that they are non-nonsense about its government contracting business.

 

In time, the company is likely to concentrate on winning cloud contracts from the Central Intelligence Agency, which is looking to ramp up its reliance on the cloud, with plans to solicit tens of billions of dollars of work from tech companies next year. Amazon has already sealed a $600 million contract with the CIA.

 

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