In win for Amazon, judge freezes work on Pentagon contract

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A federal court has ordered the Pentagon to temporarily halt work with Microsoft on a $10 billion military cloud contract that Amazon was initially favored to win

NEW YORK —
A federal judge on Thursday ordered a temporary halt of Microsoft’s work on a $10 billion military cloud contract, a win for Amazon, which sued the U.S. government last year for awarding the contract to its rival.

Amazon’s lawsuit, filed in November, alleged that President Donald Trump’s bias against the company hurt its chances to win the project. Amazon and Microsoft were finalists for the lucrative contract, for which Amazon was considered an early front-runner.

The project, known as Joint Enterprise Defense Infrastructure, or JEDI, will store and process vast amounts of classified data. It’s intended to improve the Pentagon’s communications with soldiers on the battlefield and would use artificial intelligence to speed up its war planning and fighting capabilities.

Pentagon officials have said the work would be important to advancing the U.S. military’s technological advantage over adversaries.

Pentagon spokesman Lt. Col. Robert Carver said in a statement that the department was disappointed in the ruling that delayed changes “and deprived our warfighters of a set of capabilities they urgently need.” But he said the Pentagon remained sure of its decision to choose Microsoft.

Microsoft echoed the disappointment in a statement Thursday, but said it believes that it will ultimately be allowed to move forward with the project. Amazon did not immediately respond to a request for comment.

Charles Tiefer, a government contracting law professor at the University of Baltimore, called the order to stop work on the project “striking,” noting that judges typically halt work on contracts when they see some merit in the case.

Earlier this week, Amazon asked to question Trump for its case. In July, Trump publicly stated that other companies told him the contract “wasn’t competitively bid,” and he said the administration would “take a very long look” at it. Amazon CEO Jeff Bezos has long been a target of Trump; the president calls the Bezos-owned Washington Post “fake news” whenever it publishes unfavorable stories about him.

In arguments making a case for Trump’s deposition, Amazon sought to fit Trump’s actions on the JEDI contract into a broader pattern of interference. That included the president’s role in a border wall contract, his push to block AT&T’s acquisition of CNN parent company Time Warner and his impeachment by the House of Representatives over his dealings with Ukraine.

Two government watchdog groups, Protect Democracy and Citizens for Responsibility and Ethics in Washington, filed legal briefs in the case this week supporting the call for depositions of Trump and other officials.

Microsoft opposed Amazon’s request for depositions in a court filing this week, arguing that Amazon “is grasping at straws to find support for its baseless allegations.” Microsoft, arguing that government contract professionals did their jobs properly regardless of Trump’s tweets, said Amazon “impugns, demeans and discredits government personnel at all levels, despite the utter absence of any support for their accusations.”

Amazon asked the court to halt work on the project last month. Both the documents requesting the work stoppage and the judge’s decision Thursday to issue the temporary injunction are sealed by the court.

A public court notice, however, confirmed the injunction on the Pentagon and noted that Amazon will have to establish a security fund of $42 million that will be used to pay damages if the court later finds the injunction was improper. No further details of the decision were immediately available.

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This story has been corrected to note that Amazon initially filed suit over the contract in November, not December.

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Lerman reported from San Francisco and O’Brien reported from Boston.

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