Pentagon Considers Shutting Down JEDI Project Amid Prolonged Amazon (AMZN) Court Fight: WSJ

May 10, 2021 9:11 AM EDT

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The Wall Street Journal reports that the Pentagon is considering pulling the plug on the Joint Enterprise Defense Infrastructure (JEDI) contract initially awarded to Microsoft (NASDAQ: MSFT).

Amazon (NASDAQ: AMZN) has been fighting this decision in court with a federal judge refusing the Pentagon’s request to discuss much of Amazon’s case. In response, the Deputy Defense Secretary Kathleen Hicks said the department would review the project.

“We’re going to have to assess where we are with regard to the ongoing litigation around JEDI and determine what the best path forward is for the department,” Ms. Hicks said.

The Pentagon also wrote to Congress to note that another Amazon win in courts is likely to delay the project implementation. Amazon argues that then-President Donald Trump pressured the Pentagon in handing the contract to Microsoft due to his negative sentiments towards Jeff Bezos.

“The prospect of such a lengthy litigation process might bring the future of the JEDI Cloud procurement into question,” the Jan. 28 report said.

Some lawmakers, including Rep. Steve Womack (R., Ark.), called on the Pentagon to open a new tendering process that would “enable best-in-class capability by prioritizing the ongoing competition that a cloud environment can promote.”

Microsoft took note of Pengaton’s stance and reiterated its commitment to the project.

“We agree with the U.S. [government] that prolonged litigation is harmful and has delayed getting this technology to our military service members who need it,” the company said.

“We stand ready to support the Defense Department to deliver on JEDI and other mission critical DoD projects.”

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