Pentagon auditor probing disputed cloud computing contract

Science & Technology

WASHINGTON (AP) — The Pentagon’s independent auditor is conducting a broad review of the handling of a cloud computing project potentially worth $10 billion, officials said Tuesday.

The probe includes an investigation of potential misconduct by current or former Defense Department officials involved in the project, which is part of a broader Pentagon digital modernization effort, the Office of the Inspector General said in a written statement.

“Our review is ongoing, and our team is making substantial progress,” it said. “We recognize the importance and time-sensitive nature of the issues, and we intend to complete our review as expeditiously as possible.”

The probe began June 11, weeks before President Donald Trump said his administration would take what he called “a very long look” at the program after he received “tremendous complaints” about it.

“I have had very few things where there’s been such complaining,” Trump said July 18.

Amazon Web Services Inc., a division of Amazon, and Microsoft Corp. are finalists for the contract. The Pentagon is in the final stages of determining the winner of the initial $1 million Joint Enterprise Defense Infrastructure, or JEDI, contract, which could be worth as much as $10 billion over 10 years if all options are exercised.

Trump is a critic of Amazon, the e-commerce giant owned by Jeff Bezos. Bezos also owns The Washington Post, and Trump has criticized the paper’s coverage of his administration.

The Pentagon inspector general’s office said that a team of auditors, investigators and lawyers has been reviewing the JEDI cloud program in response to issues raised by the Pentagon and members of Congress.

The complaints include assertions that the Pentagon unreasonably restricted competition for the contract and that there were inside negotiations with a Pentagon employee who later went to work for Amazon. A U.S. Federal Claims Court judge last month ruled in favor of the Pentagon’s assertion that the contracting process has been fair.

Two initial bidders — IBM and Oracle — have pushed numerous complaints about the contracting process, including assertions that it is rigged in favor of Amazon.

In addition to Trump’s pledge to “take a very long look” at the complaints, his new defense secretary, Mark Esper, is getting briefed on the JEDI project to satisfy himself that it has been handled fairly.

Esper told reporters on Aug. 2 that he was “not directed” by the White House to review the program, although he also said he has “heard from” people in the White House, as well as members of Congress, about the handling of the JEDI contract.

“There’s so much noise out there that it deserves an honest, thorough look,” Esper said. “And I would do it with any program that raised this much consternation, if you will.”

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