If Defense Secretary Mark Esper does anything, he should cancel the JEDI procurement. Yesterday’s Court of Federal Claims ruling has exposed the government to a bad possibility in a bitterly contested procurement. Namely, that the fence of impartial administrative governments toppled under an onslaught of politics.
That might ultimately prove untrue, but it’s too late to save JEDI from a reputation standpoint.
Judge Patricia E. Campbell Smith ordered a stop to the work barely underway with Microsoft, the Defense Department’s recipient of a 10-year cloud computing deal. We don’t even know for sure whether White House bluster amounted to real pressure on DoD to make the award to Microsoft.
The judge merely issued an injunction, not a ruling on the merits of the protest. But it’s possible Amazon was able to convince her of at least the strong potential that President Donald Trump was personally against the company, in part because its founder, Jeff Bezos, owns the Washington Post. And that that pressure influenced the choice of Microsoft.
As an aside, it would show a remarkable amount of leverage for Bezos’s bauble. He paid $250 million cash for the newspaper in 2013. By way of comparison, according to the Wall Street Journal Bezos shelled out $255 million for a house and an empty lot in Los Angeles — this week.
The tangled JEDI story goes back three years. Federal News Network’s Jared Serbu has reported continuously on the charges, initiated by Oracle, that Pentagon people designing the solicitation had a conflict of interest with Amazon and helped wire it in Amazon’s favor. The Defense Inspector General is still rooting around that one.
Oracle has been steaming since it was down-selected out, early on. The company has been a gadfly on the JEDI project ever since.
My point here is not to retell the tortured path this deal has taken. That would take a small book. But rather to say, regardless of who might eventually prevail, the Pentagon should cut this one adrift, and avoid damage to its reputation. The DoD doesn’t always buy competently, but at least it mostly buys honestly. It can buy cloud services from a dozen other vehicles. Imagine a hot pizza that slips its box and lands face down on a sand beach. Can you salvage it? That’s JEDI.
Even the injunction is an uncertain thing. The judge required Amazon to post a $42 million bond to cover possible damages if it turns out she wrongly issued the stop-work. That’s slightly odd, since normally injunctions indicate a strong possibility the plaintiff will prevail.
JEDI isn’t the first solicitation in history to face conflict of interest charges. It’s not the first to come under suspicion of having been wired for a particular bidder. It’s not the first to be dogged by lawsuits from those ruled out even before final source selection. But it may well be the first to have all of these problems. It’s surely the first to face the innovative charge that the contract was lost after the president personally weighed in because the CEO of a bidder also owns a newspaper that is almost maniacally critical of him.
Trump did in fact say and tweet things about the JEDI procurement he should not have. Having followed federal procurement since the last half of the Bush 41 administration, I don’t recall a White House publicly commenting on a procurement.
Again, Campbell Smith, in issuing the injunction, didn’t deal with the merits of the Amazon claims. Amazon makes many other claims in its protest having to do with the way the Pentagon’s source selection committee evaluated the technicals. So it’s not all about the alleged White House interference.
I personally think it’s a stretch that Trump’s feelings about Bezos or Amazon would trickle down to a source selection committee. What worries me is the perception, the idea that people will always say, “Oh, that one was a crooked deal from the start.”
The case differs widely from other procurement scandals, such as the Navy’s Fat Leonard case. There, the connection between old-fashioned bribery and contract awards is indisputable. That case is a simple matter of parties, booze, wristwatches and hookers for officers, and lucrative ship husbanding contracts for the now-shriveled Leonard Francis.
The problem with JEDI is, how does the Pentagon prove a negative? True, it’s legally incumbent on Amazon to prove the Pentagon erred in some way. But the nature of the charges put an unusual doubt on the JEDI office. Sadly the situation is profoundly unfair to nearly everyone sucked into it. But most of all to the procurement process and the perception that it’s done strictly by law and regulation.