Pentagon chief recusing himself from $10B ‘war cloud’ contract

Defense Secretary Mark Esper will recuse himself from the Pentagon’s $10 billion “war cloud” contract competition due to his son’s employment with one of the companies that sought the deal, the Defense Department announced Tuesday.

Esper, who in late July ordered a review of the Joint Enterprise Defense Infrastructure (JEDI) program over concerns of bias in the competition, has “attended informational briefings to ensure he had a full understanding of the JEDI program and the universe of options available,” chief Pentagon spokesman Jonathan Hoffman said in a statement.

“Although not legally required to, he has removed himself from participating in any decision making following the information meetings, due to his adult son’s employment with one of the original contract applicants,” Hoffman added.

{mosads}The statement added that “out of an abundance of caution to avoid any concerns regarding his impartiality,” Esper has delegated decisionmaking for JEDI to Deputy Defense Secretary David Norquist.

The JEDI competition is down to final contenders Amazon Web Services and Microsoft to offer cloud computing to supercharge the Department of Defense’s (DOD) war capabilities, including on the battlefield.

Amazon has been largely favored to win the lucrative contract — which could last for up to 10 years, though it begins at only two — as it says it is best equipped to store the necessary top-secret and highly classified information. 

The companies, along with Oracle, a smaller cloud computing competitor that also sought the deal, have engaged in a bitter, years-long lobbying battle, during which Oracle accused the DOD of favoring Amazon due to conflicts of interest.

The Pentagon statement does not indicate which company Esper’s son works for.

The DOD announced an investigation into the contract after President Trump threatened to look into whether it was written with a bias toward Amazon, a company the president has previously targeted.

Esper has denied the White House had a hand in deciding to check into the deal and said he had launched the review after hearing concerns from lawmakers.

The Pentagon’s inspector general then announced in August that it would investigate potential ethics concerns around the contract, including allegations of possible misconduct in the contract awarding process. That review is taking place alongside Esper’s effort.

The contract was previously expected to be awarded this summer, but prior to that, Republican lawmakers issued a series of dueling letters over the contract, some urging the Pentagon to award it quickly and others pressing for it to be stalled amid the allegations of bias.

Oracle, meanwhile, took the DOD to court over claims that the cloud computing procurement process was unfair and biased, though a federal judge dismissed those claims.