Competition — Not Cronyism — Protects America
The Supreme Court is on everyone’s mind these days, as both political parties jockey over whether to confirm a new justice. But we should also keep in mind the wise words of a former justice, Potter Stewart.
Stewart was discussing pornography when he explained it was difficult to define, but nevertheless said, “I know it when I see it.”
Cronyism is similar. It’s tough to define, but we understand when we see it. And we should be more outraged about how cronyism impacts our government than we should over whether a Supreme Court nominee drank beer in college.
Unsurprisingly, cronyism is everywhere in Washington, D.C., but with so many other things to be outraged about, it has, unfortunately, been given a pass in many contexts.
For example, recent media reports indicate that the military is about to hand an exclusive, 10-year contract to handle all of its cloud computing to Amazon Web Services (AWS). This would, of course, end any hint of competition in the market for a growing service. And even worse, it’s cronyism.
While AWS is the market leader in the cloud, there are plenty of other companies that provide a similar service, including IBM, Microsoft, and Oracle. It would make more sense to have these companies compete to provide the best product and service.
So, why isn’t this happening? The answer is simple: cronyism, which Amazon is using very effectively to become bigger and richer.
It’s not fair, but in dealing with the government, it’s often more about who you know than what you know. And Amazon owner Jeff Bezos knows people.
According to Washingtonian magazine, he’s hosted Defense Secretary Mattis in Seattle. The two men move in the same circles in D.C., as well, where Bezos is remodeling a home and may place Amazon’s second headquarters facility. Bezos has also spent time mingling in D.C. with former President George W. Bush, Bill Gates, Warren Buffett and Mitt Romney.
The Wall Street Journal reports that Amazon now spends more on lobbying than Exxon or Walmart, meaning the company will get to know (and influence) even more people in “the swamp” of Washington.
And of course, Bezos owns the town’s newspaper, the Washington Post. What better way to get to know and influence policymakers than to control the information they get to see?
Of course, AWS is already very active in the government’s cloud computing space. The consulting firm GBH Insights estimates Amazon booked some $1.5 billion in federal contracts last year alone. As the Wall Street Journal adds, “Amazon’s cloud-computing business with the U.S. government is expected to grow to $2.8 billion in 2018 and $4.6 billion in 2019.”
But size is no reason to skip the competitive process. AWS may be the biggest provider, but as anyone familiar with government contracting knows, bigger is not always better.
In fact, AWS may not even be able to provide the service. For example, AWS won a similar, exclusive contract from the CIA back in 2013, but it eventually had to add another provider to handle the Agency’s needs.
“It’s kind of an awakening as far as the intelligence community is concerned that you can’t be a one-cloud community,” a Microsoft executive says. Well, exactly. The military should learn that lesson before awarding a contract, not after.
Amazon has gone out of its way to earn favor with Washington power brokers before.
When Barack Obama was running for re-election in 2012, AWS provided the technology behind his campaign. That allowed the sitting president to “avoid an IT investment that would have run into the tens of millions of dollars,” an Amazon executive said in a blog post. It’s also around the same time AWS won the CIA contract, as the Wall Street Journal noted.
The United States has the greatest military in the history of the world. And we simply must maintain that advantage.
But while the American military’s main competitor is itself, it’s important to remember that the military succeeds because such competition is occurring. The military services are competing against each other every day: Each wants to train the best pilots. To deliver on the most difficult missions. To provide the best value for the money invested in it.
Competition forces companies to provide better products in the private sector, and this principle applies to government contracting as well. Let’s not allow AWS to use cronyism to eliminate competition in cloud services, or we’ll pay a heavy price.
Rory Riley Topping is an attorney and government relations consultant. She is a former federal appellate litigation associate and investigative counsel for the U.S. House of Representatives.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.