Judge in JEDI Contract Case Says Amazon Likely to Succeed

Judge Patricia E. Campbell-Smith’s order granting Amazon’s motion for a preliminary injunction against the United States government has now been unsealed., showing the Judge thinks Amazon is likely to succeed. Amazon claimed Microsoft’s winning bid for a $10 billion Pentagon cloud storage contract should be disqualified because it didn’t meet the requirements from the Department of Defense.

The injunction prevents Microsoft from starting to work with the DOD until the lawsuit ends. The deal Amazon and Microsoft are both fighting for with the DOD is called the Joint Enterprise Defense Infrastructure contract, or JEDI, which involves the military’s cloud computing architecture. The contract was given to Microsoft in 2019, despite the general expectation that Amazon would win the contract, reports of an anti-Amazon bias in the White House circulated as a possible reason for the decision.

In the released decision, Judge Campbell-Smith said she believes Amazon is “likely to succeed on the merits of its argument that the DOD improperly evaluated” their decision. The decision says if the court finds the DOD acted in error they will need to determine if the error was prejudicial, which the judge said the plaintiff is likely to be able to do. To do this they only have to prove they would have been more likely to acquire the contract in a different circumstance. They said the plaintiff will also need to demonstrate that the agency’s action was capricious, arbitrary, an abuse of discretion, or against the law.

The DOD asked for bids on the project in July of 2018, stating “The objective of this source selection is, through a competitive solicitation process, to select the Offeror whose proposed solution for JEDI Cloud represents the best value to the Government.” Amazon alleged that Microsoft’s proposal did not meet the solicitation requirements and the storage they proposed would not be “online storage” but another type of storage which allowed them to present a lower bid.

The judge agreed with Amazon’s statement of irreparable harm, despite claims from the Defendant that the claims were speculative and generic. The decision says Amazon listed specific losses “reasonably expected during the transition period including the loss of competitive advantage in any renewed competition, and damage to plaintiff’s ability to serve its customers.”

Microsoft and the Department of Defense argued that “the public interest in national security should outweigh plaintiff’s concern for the integrity of the procurement process.” However, the court said the DOD is operating currently without the JEDI program, and they don’t find that it is “so urgently needed that the court should not review the process to ensure the integrity of the procurement.”  The judge did order that Amazon should provide $42 million in security for the payment of costs and damages if it is found that the injunction should not have been granted.