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Pentagon inspector general to probe $10 billion cloud computing project

libadmin August 13, 2019
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President Trump and Microsoft CEO Satya Nadella, center, listen as Amazon chief executive Jeff Bezos speaks during an American Technology Council roundtable at the White House on June 19, 2017. (Alex Brandon/AP)

August 13 at 2:58 PM

The Defense Department’s inspector general has assembled a team of auditors to evaluate the Pentagon’s handling of its largest cloud computing project, a massive contract that could be worth up to $10 billion over 10 years.

The review presents yet another hurdle for the Joint Enterprise Defense Infrastructure contract, known as JEDI, which has been mired in controversy and costly litigation for more than a year. The matter was referred to the inspector general by members of Congress and through the agency’s complaints hotline, said Dwrena Allen, a spokeswoman for the inspector general.

“We are reviewing the DoD’s handling of the JEDI cloud acquisition, including the development of requirements and the request for proposal process,” Allen said. “In addition, we are investigating whether current or former DoD officials committed misconduct relating to the JEDI acquisition, such as whether any had any conflicts of interest related to their involvement in the acquisition process.”

In the statement, the inspector general did not commit to eventually publicizing its findings. Allen said the work of evaluating the contract had already begun and would be completed “as expeditiously as possible.”

Dana Deasy, the Defense Department chief information officer in charge of the procurement, told reporters last week that his office would consult with the inspector general before awarding the massive contract. He did not say whether the award would be delayed until the inspector general completes its review.

The JEDI contract is meant to speed up the military’s use of cloud computing systems, which employ networks of remote servers to improve computing processes and ease the transmission of data. Defense Department officials say they need to adopt such technology to compete with Russia and China for military dominance. They want to turn to a single commercially oriented tech company to operate that system, and they have said only Amazon and Microsoft meet the minimum specifications.

The process has been dogged by allegations that it is biased in favor of Amazon Web Services since it was unveiled last year. Oracle and IBM have protested the award, arguing that turning to a single company for such an important responsibility is unwise and that the process is rigged in favor of Amazon.

The inspector general’s announcement comes as a slow boil of controversy surrounding the procurement has suddenly bubbled up into a political firestorm.

President Trump recently instructed new Defense Secretary Mark T. Esper to reexamine the contract over concerns that it will go to Amazon, a move that some observers characterized as an inappropriate incursion into the Pentagon’s business. (Amazon founder Jeff Bezos owns The Washington Post.)

Sen. Marco Rubio (R-Fla.), whose political action committee has received donations from Oracle co-founder Larry Ellison, has asked that the contract be delayed and lobbied the president directly on the matter, a member of his staff said. Democratic Sens. Mark R. Warner (Va.) and Jack Reed (R.I.) raised concerns that Trump may have acted inappropriately by intervening in the procurement.

In its most recent lawsuit, Oracle accused Amazon of benefiting from an “organizational conflict of interest” by hiring away Defense Department officials who had worked on JEDI.

Multiple investigations into Oracle’s claims have concluded that the allegations against Amazon should not preclude it from participating in the procurement and that the Defense Department was reasonable in how it structured the contract.

Oracle’s latest legal action before the U.S. Court of Federal Claims ― a highly unusual months-long court battle in which lawyers representing Amazon and the Defense Department teamed up to fight Oracle’s claims ― failed to block the award. Among other conclusions, the judge presiding over the case found that Oracle was not materially harmed by any procurement irregularities because it is not part of the competition anyway.

Oracle’s lawsuit did, however, manage to delay the award for several months while the Defense Department reexamined the role of Deap Ubhi, a Defense Department official later hired by Amazon.

Ubhi had worked for Amazon before joining the Defense Department, where he worked on the JEDI procurement as a member of the Defense Digital Service. He repeatedly praised Amazon and referred to himself as an “Amazonian” while he was a public official, suggesting that he was biased in favor of Amazon.

A Defense Department investigation concluded that Ubhi’s involvement had not skewed the procurement in Amazon’s favor. The contracting officer overseeing JEDI did conclude, however, that Ubhi violated federal conflict-of-interest rules.

The judge presiding over the case concluded that Ubhi had lied to both the Defense Department and Amazon about the circumstances surrounding his departure from government service. The judge also concluded that Ubhi’s claims that he had been “leading the effort” to accelerate the department’s commercial cloud adoption were untrue, calling Ubhi’s statements about his role in the procurement “self-promoting, fabulist and often profanity-laced.”

Ubhi has not responded to repeated requests for comment, and his employer has declined to make him available for an interview. An Amazon spokesman did not respond to a request for comment Tuesday on the Defense Department inspector general’s review.

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