Pentagon watchdog says it is reviewing $10B ‘war cloud’ contract over misconduct allegations

The Pentagon’s internal watchdog on Tuesday said that it is investigating potential ethics concerns around the $10 billion “war cloud” contract at the center of an ongoing tug-of-war among lawmakers and the White House.

The Pentagon Inspector General said it is reviewing aspects of the Joint Enterprise Defense Infrastructure (JEDI) program, including allegations of possible misconduct in the contract awarding process.

{mosads}It was previously known that the Pentagon inspector general’s office was reviewing ethical concerns around JEDI, but the inspector general’s statement on Tuesday marks detailed insight into an official probe.

“We are reviewing the DoD’s handing of the JEDI cloud acquisition, including the development of requirements and the request for proposal process,” spokeswoman Dwrena Allen said in a statement.

She added “a multidisciplinary team” is investigating concerns around JEDI “referred to us by Members of Congress and through the DoD Hotline. 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.”

The JEDI contract, which is set to be awarded to either Amazon or Microsoft, would allow one company to develop cloud-computing infrastructure for the Pentagon. The contract could last for up to 10 years, though it begins at only two, and is valued at up to $10 billion.

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

The contract was previously expected to be awarded this summer, but DOD officials told reporters in a briefing last week that it will likely be delayed.

The watchdog review of JEDI is happening alongside an internal review of JEDI ordered earlier this month by new Defense Secretary Mark Esper.

Esper ordered the review shortly after President Trump said he would ask his administration to investigate whether the JEDI contract is biased towards Amazon.

Amazon is largely favored to win the lucrative cloud-computing contract, as experts have noted the company’s cloud-computing arm, Amazon Web Services, is the best-equipped to handle the troves of classified and top-secret data involved.

Republican lawmakers over the past two months have issued a series of dueling letters over the contract as well, as some — including several members of the House Armed Services Committee, which oversees the DOD — have urged the Pentagon to award the contract quickly, while others have said the process should be stalled amid bias allegations.

Since the JEDI program was announced two years ago, it has been the subject of significant and expensive lobbying efforts by some of the country’s top cloud-computing companies, including Amazon, Microsoft and Oracle.

Oracle has acted as the prime JEDI antagonist, taking the DOD to court over claims that the cloud-computing procurement process was unfair and biased.

A federal judge dismissed Oracle’s claims, saying the company did not provide proper evidence. And multiple government investigations have cleared the DOD of wrongdoing.

The Pentagon inspector general’s office said it will report its findings to Esper and Congress.

“We will also consider publicly releasing the results, consistent with our standard processes,” the spokeswoman said.

The Pentagon’s chief information officer told reporters during a briefing last week that Esper’s review will involve “a series of education programs that allow him to get a deep understanding” of the program.

“He obviously has a role to weigh into the overall direction of this program,” Deasey said. “For him to be able to do that, he needs to first go through a series of deep education sessions.”