Economy

Court halts Pentagon cloud contract work with Microsoft

A federal judge on Thursday ordered a temporary halt of Microsoft's work on a $10 billion military cloud contract, a win for Amazon, which sued the US government past year for awarding the contract to its rival.

A federal judge on Thursday issued an order temporarily blocking the USA military from awarding a multibillion-dollar cloud computing contract to Microsoft, after Amazon claimed the process was tainted by politics.

Judge Patricia E. Campbell-Smith also released a sealed opinion accompanying the decision and ordered Amazon to post $42 million to cover damages in the event that the injunction was issued wrongfully.

Lieutenant Colonel Robert Carver, a Defense Department spokesman, said the Pentagon believed "the actions taken in this litigation have unnecessarily delayed implementing DoD's modernization strategy and deprived our warfighters of a set of capabilities they urgently need".

He added that the Pentagon remained confident in its decision to award the contract to Microsoft.

The injunction puts a freeze on the Joint Enterprise Defense Infrastructure, or JEDI, project, which aims to allow the USA military to use artificial intelligence to beef up its fighting capabilities as well as improve communications with soldiers on the battlefield.

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But government lawyers argued in a filing made public on Wednesday that Amazon's request to depose Trump was "particularly audacious" and unnecessary because the company had failed to offer enough evidence to support its claims of bias.

Bezos also owns the Washington Post, whose coverage has been critical of Trump and which has frequently been a target of barbs by Trump about the news media.

Amazon has asked for the Department of Defense to halt the contract with Microsoft and re-review submitted proposals. A representative for Amazon didn't respond to a request for comment.

Earlier this week, Amazon asked to question Trump for its case.

"We have confidence in the Department of Defense, and we believe the facts will show they ran a detailed, thorough and fair process", it said.

The protest filed in the US Court of Federal Claims urges that the rival JEDI bids be re-evaluated. "All we're trying to do through this protest and this request for a legal review is to ensure that a proper decision was made on behalf of USA taxpayers", Amazon spokesperson Jay Carney told CNBC.



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