Amid Trump attacks, Amazon competes for lucrative DOD contract
The Trump administration is considering whether to award Amazon a multibillion-dollar defense contract even as President Trump takes public shots at the company.
Over the past week, Trump has repeatedly derided Amazon on Twitter, with reports suggesting the president is aiming to damage the e-commerce giant and its owner, Jeff Bezos. The company’s stock has tumbled as a result.
“I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” Trump tweeted last week.
Even as the president hammers Amazon, federal defense officials are widely seen as likely to award the company a multibillion-dollar cloud computing contract early next month.
The Department of Defense (DOD) is finalizing the details of the contract during a public comment period, but has signaled that it will ask a single source to develop a new department-wide cloud computing system.
Amazon’s rivals and critics say that the Pentagon is likely to award the Seattle-based company the contract and argue that the process has been biased toward the company.
The DOD rejects those allegations, saying that no company has received special treatment.
“We want the best solution for the department. We have no favorites,” Timothy Van Name, the deputy director of the Defense Digital Service, said in March.
It’s not clear how much attention Trump has given to the Pentagon contract, but he appears to at least be aware of it.
Bloomberg reported Wednesday that Safra Catz, the co-chief executive of Oracle, complained to Trump about the bidding process during a private dinner Tuesday evening. Oracle is also competing for the deal.
Trump did not suggest to Catz that he would intervene, according to Bloomberg.
During a White House press briefing on Wednesday, White House press secretary Sarah Huckabee Sanders said Trump noted that Defense Department contracting is done independently of the White House.
“The president is not involved in the process. The DOD runs a competitive bidding process,” she said.
Observers say presidents generally don’t pay attention to such contracts.
“Trump probably didn’t see this coming because this is not stuff he pays attention to. He depends on the White House [chief information officer] CIO to monitor these things,” said John Weiler, managing director of the IT Acquisition Advisory Council, a group whose board members include officials from companies that compete with Amazon, including IBM and Google.
Weiler said that another reason the contract has flown under Trump’s radar is that the process was set into motion during President Obama’s tenure.
“The cabal began with the previous administration. Because a lot of people stayed, they’ve continued to pursue this Amazon monopoly,” Weiler said.
In 2014, while Obama was still in office, the CIA awarded Amazon a $600 million contract to handle its cloud computing services.
Federal officials involved in the DOD cloud procurement process, like Deputy Chief Information Officer of the United States Margaret Graves and Defense Digital Service Director Chris Lynch, were appointed to positions in the federal government during the Obama years.
Amazon says the process for the contract has been transparent and that it has had no special access.
“[The Pentagon] will select the provider that best meets their needs for the warfighter. Legacy providers that claim otherwise are focused on protecting their own bottom line and not advancing the mission of DOD,” an Amazon Web Services (AWS) spokeswoman told The Hill in an email last month.
So far, the DOD has received 1,089 industry and agency comments from 48 companies about the contract, which it will release publicly next week.
The agency will release its final draft of a cloud contract proposal in May.
The Pentagon has not yet given an official number for the contract, but estimates place it in the multibillion-dollar range. The deal could lock the DOD into a 10-year, winner-take-all deal with whichever company it chooses to provide the service.