The Pentagon’s inspector general has concluded the procurement process for the Joint Enterprise Defense Infrastructure (JEDI) cloud computing was conducted fairly, while noting that proprietary information was improperly disclosed to Amazon [AMZN] after it lost out and that program officials were barred from answering questions on their communications with the White House.
The IG’s office also substantiated claims of ethical misconduct against two Pentagon employees who worked on the program, adding that neither case had a substantial impact on the procurement process.
“The Inspector’s General final report on the JEDI Cloud procurement confirms that the Department of Defense conducted the JEDI Cloud procurement process fairly and in accordance with law. The IG’s team found that there was no influence by the White House or DoD leadership on the career source selection boards who made the ultimate vendor selection,” Air Force Lt. Col. Robert Carver, a department spokesman said in a statement. “This report should finally close the door on corporate-driven attacks on the career procurement officials who have been working tirelessly to get the much needed JEDI cloud computing environment into the hands of our frontline warfighters while continuing to protect American taxpayers.”
Microsoft [MSFT] beat out Amazon Web Services for the potential $10 billion JEDI cloud contract last October, following two years of program delays, allegations of conflict of interest, pre-award protests and congressional and industry pushback over the Pentagon’s decision to go with a single-award approach.
“Our review of the JEDI Cloud procurement concluded that the DoD’s decision to award the JEDI Cloud contract to a single contractor was consistent with applicable law and acquisition standards,” the IG wrote in its report. “In addition, however, we concluded that after the JEDI Cloud Contract award, the DoD improperly disclosed source selection and proprietary Microsoft information to Amazon. In addition, the DoD failed to properly redact names of DoD source selection team members in the source selection reports that were disclosed to Amazon and Microsoft.”
Frank Shaw, a Microsoft spokesman, told Defense Daily, the IG’s report affirms the JEDI procurement process was handled properly.
“It’s now apparent that Amazon bid too high a price and is seeking a do-over so it can bid again. As the IG’s report indicates, Amazon has proprietary information about Microsoft’s bid that it should never have had. At this stage, Amazon is both delaying critical work for the nation’s military and trying to undo the mistake it made when it bid too high a price,” Shaw said.
While the IG’s report cleared the Pentagon of missteps in the selection process, the office noted it could not reach a conclusion on potential White House interference in the program because witnesses were instructed not to answer questions on conversations with the administration.
“We could not review this matter fully because of the assertion of a ‘presidential communications privilege,’ which resulted in several DoD witnesses being instructed by the DoD Office of General Counsel not to answer our questions about potential communications between White House and DoD officials about JEDI,” the IG’s office wrote. “Therefore, we could not definitively determine the full extent or nature of interactions that administration officials had, or may have had, with senior DoD officials regarding the JEDI Cloud procurement.”
Amazon is currently challenging the JEDI cloud decision in federal court claiming the evaluation process included “deficiencies, errors, and unmistakable bias,” specifically the company’s allegation that the president wanted to “screw Amazon” in the competition.
The Pentagon filed a motion in March seeking to remand Amazon’s lawsuit so the department could reevaluate bids for JEDI and address potential technical errors in the original procurement process (Defense Daily, March 13).
Following the report’s release on Wednesday, the Project on Government Oversight (POGO) expressed concerns on the IG’s ethical misconduct conclusions and the lack of a definitive answer on alleged White House interference.
“This is the poster child for a procurement gone wrong. The process for awarding the JEDI contract was questioned from the start and severely hampered by ethical issues and the appearance of influence from the president and others,” Scott Amey, POGO’s general counsel, said in a statement. “Add to that the White House’s inappropriate refusal to participate in the inspector general’s investigation, and we have a $10 billion mess on our hands”
The IG’s office substantiated ethical misconduct claims against Deap Ubhi, a former product director for the Defense Digital Service, for failing to disclose he was in employment negotiations with Amazon in fall 2017 while initial JEDI tasks were taking place and Stacy Cummings, a DoD acquisition official, for owning stock in Microsoft while participating in the source selection effort.