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The JEDI Saga: Military / Industry Relations Get Complex [AWS v. USA]
ArbitraryDescriptor
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This contract has come up in a few threads over the years, thought it might be worth its own now that it seems to be headed for a Bezos vs Trump proxy war in the courts.
The Joint Enterprise Defense Infrastructure (JEDI) is a $10 billion dollar cloud computing program that was awarded to Microsoft over Amazon [Web Services] in fall 2019 and protested almost immediately by Amazon.
The Players:
Amazon: One of two finalists. Won the contract to develop the CIA's cloud infrastructure, making it the only cloud provider with past performance in classified govt cloud administration and the strong favorite to win. Also the only cloud provider with experience in having their CEO personally attacked by the President on Twitter.
Oracle: Eliminated from consideration early on, protested selection criteria (and failed), alleging that the requirements had been intentionally written so strictly that only Amazon could qualify to bid.
Microsoft: The second of two finalists. Also does clouds, but, if they're being honest with themselves, probably just as surprised by all of this as anyone else.
The President of the United States: Openly trash talked / has a personal axe to grind with Amazon, (presumably) directed Sec Esper to review the award process.
Secretary Mark Esper: recused himself from the JEDI award process a few days after the award decision was made.
The current controversy:
Amazon alleged, in November, that Microsoft did not qualify for the source criteria to begin with, and that the government later altered the proposal requirements to downplay Amazon's advantages in areas where Microsoft could not compete, and that the President was exerting inappropriate influence over the award process.
In their most recent filing, Monday, Amazon has requested to depose several members of the JEDI source selection board, fmr Defense Secretary Mattis, the Pentagon's CIO, Secretary Esper, and President Trump based, partially, on the fact that President made [up?] a bunch of dumb-shit claims about things he's 'heard', and they are entitled to review the underlying record should it actually exist.
The article notes that, based on case law, the depositions requested are ambitious at best; but also that the President has never so blatantly appeared to put his thumb on the scale such that there might be a sufficient public interest in more rigorous transparency.
The Joint Enterprise Defense Infrastructure (JEDI) is a $10 billion dollar cloud computing program that was awarded to Microsoft over Amazon [Web Services] in fall 2019 and protested almost immediately by Amazon.
The Players:
Amazon: One of two finalists. Won the contract to develop the CIA's cloud infrastructure, making it the only cloud provider with past performance in classified govt cloud administration and the strong favorite to win. Also the only cloud provider with experience in having their CEO personally attacked by the President on Twitter.
Oracle: Eliminated from consideration early on, protested selection criteria (and failed), alleging that the requirements had been intentionally written so strictly that only Amazon could qualify to bid.
Microsoft: The second of two finalists. Also does clouds, but, if they're being honest with themselves, probably just as surprised by all of this as anyone else.
The President of the United States: Openly trash talked / has a personal axe to grind with Amazon, (presumably) directed Sec Esper to review the award process.
Secretary Mark Esper: recused himself from the JEDI award process a few days after the award decision was made.
The current controversy:
Amazon alleged, in November, that Microsoft did not qualify for the source criteria to begin with, and that the government later altered the proposal requirements to downplay Amazon's advantages in areas where Microsoft could not compete, and that the President was exerting inappropriate influence over the award process.
In their most recent filing, Monday, Amazon has requested to depose several members of the JEDI source selection board, fmr Defense Secretary Mattis, the Pentagon's CIO, Secretary Esper, and President Trump based, partially, on the fact that President made [up?] a bunch of dumb-shit claims about things he's 'heard', and they are entitled to review the underlying record should it actually exist.
The preservation of public confidence in the nation’s procurement process requires discovery and supplementation of the administrative record, particularly in light of President Trump’s order to ‘screw Amazon.’ The question is whether the President of the United States should be allowed to use the budget of the DoD to pursue his own personal and political ends.
The article notes that, based on case law, the depositions requested are ambitious at best; but also that the President has never so blatantly appeared to put his thumb on the scale such that there might be a sufficient public interest in more rigorous transparency.
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Eh, they may be able to drag it out in court long enough to get a new administration.
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His goal is to make crossing Amazon harder, not chastise the President
If he wanted to chastise the President he has several billion more ways to do that
The actual goal here is to demonstrate malfeasance in an award process that already happened to reverse the decision or start over, which isn't, afaik, something the now or future POTUS can actually affect. Trump gave them ammo so they're using it, but I suspect this will ultimately come down to whether someone we've never heard of in the contracting office or on the evaluation teams broke a rule.
Cloud Wars: Episode 0, Attack of the Orange Menace's Revenge.
I even finally signed up for PACER to dig into it a bit, but it gives me an access denied on whatever TRO was filed Jan 22. Though it also looks to me like the motions to depose were filed weeks ago, contrary to what has been reported, so maybe I just need to RTFM?
Choose Your Own Chat 1 Choose Your Own Chat 2 Choose Your Own Chat 3
Court orders work stoppage on JEDI
But it's not all good news for AWS, they have to put up, gasp, fourty two million dollars in case it turns out that they were pulling the judge's leg.
That will teach them.
No details on the specifics of the TRO, all of this stuff seems to be getting filed under seal.
Understandably, given every other word is probably national defense information or a trade secret, but still disappointing as a spectator.
Honestly this was going to end in a protest and lawsuit no matter who won. The president really made it a lot harder on their acquisition folks to win the protest though. I've been on both sides of a protest (for much smaller contracts) and it's going to be if the selection criteria was changed after Amazon and Microsoft made the final 2. If the selection criteria was given to the finalists and was what was used for the acquisition. Microsoft will likely not prevail. If the selection criteria was changed after the final 2 were announced. Amazon will likely prevail.
This is going to be tough for amazon to win.
As someone who's been on many selection boards and the KO said this when we had some new people. "The selection criteria does not have to be fair, but it has to be given to the bidders in advance, and it has to be uniformly applied. If we want we can judge people on how purple the hat is they wear during the presentations. But we have to tell them how we are grading the shading of purple and the parameters on what we refer to as a hat."
He was joking but only kind of.
And/Or Microsoft. I'll wager they're far more upset that Microsoft took what they were convinced was theirs, and Trump is just an excuse. As MS noted, they could have protested most of the substantiative procedural stuff when it happened, but they didn't because they still thought they had this.
I'm curious what that figure is meant to cover. It's a 10 year/ $10b contract, and that conveniently matches a linear burn rate of $4.16m/day for 10 days, but two weeks doesn't seem like enough time to sort anything out.
Makes sense, those would be fixed costs MS is inarguably having to eat.
They've been doing "light preliminary" work with DOD, and my understanding was they were ready to change gears soon; so I was thinking the penalty would be meant to cover some portion of revenue that they were scheduled to charge the govt over the course of the stoppage, and which they would not be able to recoup; but that would be more practical to address after the protest is settled.
Edit: Oh! Didn't see your first reply.
If there is a health and wellness increase Or a prevailing wage increase during the period of time of the protest they’ll get that too.
I don't think that is how the CEO/company fines relationship works. Unless you meant bezos takes a hit cause Amazon stock price goes down from a 42million loss...which is a stretch.
For example, Microsoft's stock actually went up $0.15 in after hours trading after a judge ordered they stop working on JEDI.
More detailed article, shamelessly stolen from @MorganV
Article notes that MS has been staffing up hard only to put on an indefinite hold, and that's boat I am quite familiar with.
(It sucks. A lot.)
Amazon is and has been an amazingly profitable company in terms of earnings for a long while now - they aren't Uber or WeWork. If it wasn't for their continued and ridiculously bad labor practices, they would be a fairly good example of how we ideally want companies to act in end game capitalism in terms of reinvesting their wealth into new products and services rather than just stockpiling it.
Apart from whoever fucked up and lost the bid, probably no one. Bezos made $42mil while you were typing your post.
Yeah this is all true and also it’s true that Amazon’s PE ratio is driven still almost exclusively by their growth potential and not the already too fucking ridiculous profit
AWS has storage services to handle FOUO ('GovCloud', I think?) and a few tiers above it for Secret+; not sure if this includes their full suite of services (compute, etc).
-Amazon's protest gets dismissed as frivolous. This seems like the least likely outcome because Trump has added plenty to argue that the process has been tainted. Even though 42 million is probably nothing for Amazon, they probably wouldn't pursue this if they didn't have a reason chance because they aren't just putting 42 million up for this, they are spending PR & personnel that could be spent elsewhere.
-Amazon loses, but the decision concludes their protest wasn't without merit and that there was enough fuckery to justify a protest and investigation. I'm less sure on this one because I don't know if frivolous is definted the same way in legalese. Seems like Trump has fucked around with the process enough that you could have an outcome where no one was unfairly rewarded the contract or unfairly denied, but the end result looks really shady until people dig deep. AKA someone would be within their rights to protest and not get punished for doing so.
-Amazon wins because it's found that the process wasn't probably followed because Trump didn't want them to have the contract.
-Judge concludes there was fuckery and to the extend that the whole process has to restarted and Trump told to STFO of it.
10 billion dollars is tough though because there isn’t a lot on the market right now they can offer.
Amazon could maybe sell them some materials to build the Mexico wall. A couple billion more of the DoD budget was just reallocated, I believe
GovCloud has a majority of the services that regular cloud has. I belive it's missing a couple of ec2 instances.
I spent a year on a contract pricing out how much it would cost to move to the major clouds.
Mexico wall only has potential if amazon has a contract in place.
https://www.cnn.com/2020/03/12/tech/amazon-microsoft-department-of-defense-jedi/index.html
This is likely the start of a negotiated settlement I mentioned above.
If everything works as it should, the "best value" award criteria should get the tax payers the best deal for their money; as opposed to "lowest price, technically acceptable" (LPTA) where "technically acceptable" is as air-quotey as it sounds. So, in theory, the tax payers only lose if the protest process doesn't correct an error in the determination.
Which it may or may not. They unsealed the TRO order, so now we know the point on which the judge found Amazon highly likely to win was that Microsoft's storage solution didn't meet the requirements which gave them a pricing advantage.
https://federalnewsnetwork.com/defense-main/2020/03/new-court-documents-explain-reasoning-behind-jedi-stop-work-order/
Meant to post this last week, but refreshing the COVID-19 map every 15 minutes is a full-time job.
Now Trump made it so much harder for the government to win. But cost wise, they likely would incur the same level of costs if they win or negotiate with Amazon for them to drop their protest.