by WorldTribune Staff, August 14, 2018
A $10 billion contract to move all of the Defense Department’s computer data onto one cloud-based system appears to have been rigged in Amazon’s favor, a report said.
The deal for the Pentagon contract “suggests the extent to which Jeff Bezos is gobbling up the swamp,” May Jeong wrote for Vanity Fair on Aug. 13. “It also raises a larger question: How do you drain a swamp when the alligators are bigger than ever?”
On July 26, the Defense Department issued a request for proposals for the project called JEDI (Joint Enterprise Defense Infrastructure), one of the U.S. government’s largest contracts.
Many observers who are familiar with the 1,375-page request for the proposal say the language “contains a host of technical stipulations that only Amazon can meet, making it hard for other leading cloud-services providers to win – or even apply for – the contract,” Jeong’s report said. “One provision, for instance, stipulates that bidders must already generate more than $2 billion a year in commercial cloud revenues – a ‘bigger is better’ requirement that rules out all but a few of Amazon’s rivals.”
The report notes that the Pentagon’s “current call for bids was put together only after Defense Secretary James Mattis hired a D.C. lobbyist who had previously consulted for Amazon.”
The lobbyist, Sally Donnelly, “served as a top adviser to Mattis while the details of JEDI were being hammered out,” the report said.
During Donnelly’s time as the defense chief’s adviser, Mattis flew to Seattle to tour Amazon’s headquarters and meet with Bezos.
“Then, as the cloud-computing contract was being finalized, Donnelly’s former lobbying firm, SBD Advisors, was bought by an investment fund with ties to Amazon’s cloud-computing unit,” the report said.
Jeong’s report notes that some in Congress who have reviewed the contract process question whether Donnelly violated a federal law that bars executive-branch employees from participating in government decisions that affect their personal interests.
“We recently became aware of serious and possible criminal violations related to the Amazon cloud DOD contract process,” a high-ranking congressional staffer who spoke on the condition of anonymity, told Vanity Fair. “We are concerned about the implications of the appearance of conflicts of interest and impropriety related to how Pentagon personnel with close ties to Amazon may have influenced multi-billion-dollar cloud contracts.”
Donnelly, through her lawyer, denies any wrongdoing. “Ms. Donnelly sold her entire stake in SBD Advisors before setting foot in the Pentagon,” the lawyer said. “From that moment forward, she has had absolutely no financial or other interest in SBD Advisors or its clients.”
Amazon’s high-ranking connections in the Pentagon “underscore how Jeff Bezos continues to wield influence in Washington, even as the president himself rails against the online goliath,” Jeong wrote.
John Weiler, an industry expert who runs a trade group that includes many leading IT firms, told Vanity Fair that “When you have that kind of access during a $10 billion procurement, that compromises the integrity of the procurement. Amazon was basically able to write the playbook.”