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Amazon Is Angling To Be America’s Next Big Defense Contractor — And For Now, Trump Is Thwarting Them

(Alex Wong/Getty Images)

Anders Hagstrom Video Columnist

The U.S. government snubbed Amazon for a $10 billion military cloud contract Friday, placing President Donald Trump squarely between Amazon and its ambitions to become the next top-tier government defense contractor.

Amazon took its first major dip into defense contracting in 2013 when it secured a $600 million contract to be the CIA’s exclusive cloud computing supplier. Since then, the company has both beefed up its data presence near Washington, D.C., and announced a new headquarters in Northern Virginia, a stone’s throw from Capitol Hill and the Pentagon. The $10 billion contract is with the Joint Enterprise Defense Infrastructure (JEDI), and centers around expanding the military’s data cloud storage to allow further battlefield integration of artificial intelligence, among other advanced technologies. (RELATED: Trump Admin Gives $10 Billion Cloud Computing Contract To Microsoft)

“We feel strongly that the defense, intelligence, and national security communities deserve access to the best technology in the world,” an Amazon spokesperson told MIT Technology Review regarding its expansion into defense contracting. “And we are committed to supporting their critical missions of protecting our citizens and defending our country.”

Companies originally complained the $10 billion JEDI contract was specifically tailored for Amazon and didn’t give any other companies an opportunity to bid prices down.

WASHINGTON, DC - JUNE 19: U.S. President Donald Trump (2nd L) welcomes members of his American Technology Council, including (L-R) Apple CEO Tim Cook, Microsoft CEO Satya Nadella and Amazon CEO Jeff Bezos in the State Dining Room of the White House June 19, 2017 in Washington, DC. According to the White House, the council's goal is "to explore how to transform and modernize government information technology." (Photo by Chip Somodevilla/Getty Images)

WASHINGTON, DC – JUNE 19: U.S. President Donald Trump (2nd L) welcomes members of his American Technology Council, including (L-R) Apple CEO Tim Cook, Microsoft CEO Satya Nadella and Amazon CEO Jeff Bezos in the State Dining Room of the White House. (Photo by Chip Somodevilla/Getty Images)

President Donald Trump responded to questions about the complaints in early October and eventually sided against Amazon.

“It’s a very big contract,” Trump said at the time. “One of the biggest ever given having to do with the cloud and having to do with a lot of other things. And we’re getting tremendous, really, complaints from other companies, and from great companies. Some of the greatest companies in the world are complaining about it.”

Bezos’ ownership of The Washington Post, an outlet central in the president’s fake news narrative, has influenced Trump’s hostility toward the world’s richest man. (RELATED: Jeff Bezos Responds To Critics Who Say Amazon Should Be Knocked Down A Peg)

Trump reportedly wanted to “screw” Amazon by denying them the JEDI contract, according to Politico. Now that Microsoft has secured it, Amazon is preparing to take legal action to protest the decision, and the company is expected to base its argument on the president’s alleged bias. (RELATED: Pentagon Doles Out Nearly One Million In Border Wall Contracts)

“Amazon has the president on record clearly stating that he was looking at intervening in the procurement process,” federal contracting specialist Barbara Kinosky told Bloomberg. “I am guessing Amazon and its legal team did not spend the weekend watching the World Series.”

Amazon has until November 5 to submit a formal complaint. If the complaint passes muster, it will trigger a 100-day review of the contract process by the Government Accountability Office (GAO). In order to overturn the contract, Amazon would have to establish that Trump’s bias against Amazon existed, succeeded in influencing the Pentagon’s decision, and could result in blacklisting Amazon from future contracts.

Pentagon Jedi Cloud concept picture, Shutterstock/ By sdecoret and Ivan Cholakov

Pentagon Jedi Cloud concept picture (Shutterstock/sdecoret and Ivan Cholakov)

One potential response from the U.S. Government would be to split the contract among several companies, accommodating the original requests from companies like Oracle and the International Business Machines Corp. (IBM) when they complained Amazon was getting an unfair advantage in the deal.

Amazon has faced push-back within its own company for working with the U.S. government, however. In 2018, a group of employees sent a letter to Bezos claiming the company’s indirect work with Immigration and Customs Enforcement (ICE) was like working with Hitler. The source of their ire was Amazon providing web services to Palantir, a data analytics company that works with ICE.

“As ethically concerned Amazonians, we demand a choice in what we build, and a say in how it is used. We learn from history, and we understand how IBM’s systems were employed in the 1940s to help Hitler,” the letter read. “IBM did not take responsibility then, and by the time their role was understood, it was too late. We will not let that happen again. The time to act is now.” (RELATED: Jeff Bezos Gifts Washington Post’s Top Editor A Bike For His Birthday)

The letter had little effect, however, and Amazon still maintains its multi-million dollar contract with Palantir.

The result of the upcoming legal battle over the JEDI contract could make the difference between Amazon being just another federal data contractor and being the dominant data contractor moving forward. Amazon is widely seen as the forefront of the cloud computing industry.

“[Amazon Web Services] is the clear leader in cloud computing, and a detailed assessment purely on the comparative offerings clearly lead to a different conclusion,” a spokesperson for the company said of Microsoft’s win, according to Politico. “We remain deeply committed to continuing to innovate for the new digital battlefield where security, efficiency, resiliency, and scalability of resources can be the difference between success and failure.”