Someone is spreading an Amazon smear campaign as cloud giants compete for a $10 billion defense cloud contract

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Amazon Web Services CEO Andy JassyAmazon Web Services CEO Andy JassyAmazon

  • Bloomberg reports that there's a dossier going around Washington, D.C. saying that Amazon and Pentagon officials engaged in activities that allowed Amazon to unfairly have an edge in the bidding for a $10 billion cloud contract with the Pentagon.
  • That contract is for a project called Joint Enterprise Defense Infrastructure (JEDI), which Amazon is widely expected to win.
  • These allegations include how a Pentagon aide helped write the contract to unfairly favor Amazon, and that an Amazon Web Services executive engaged in an improper relationship.
  • Microsoft, IBM and Oracle have protested the fact that only one company can win the JEDI contract, but there's no evidence that any of these companies are behind the dossier.

There's a 33-page dossier circulating in Washington, D.C. smearing Amazon, right as the cloud giants battle for a $10 billion winner-take-all contract with the Pentagon, Bloomberg reports.

The dossier, Bloomberg reported, takes aim at Pentagon officials and company managers at Amazon. Microsoft, IBM, Oracle and Amazon are all in the running the Joint Enterprise Defense Infrastructure (JEDI) contract, where one company will be awarded billions to work with the Department of Defense to move its data onto the cloud.

Currently, Amazon Web Services is seen as the runaway favorite to win the race. While Microsoft, IBM, and Oracle have all at some point protested the fact that only one company can win the huge contract, there's no evidence that they are behind the smear campaign.

One version of the dossier suggests that Defense Department officials unfairly gave Amazon an edge in the competition and that Amazon is the only company with the technical capabilities required by the contract. Amazon is currently the only company that holds the highest security authorization to handle government data.

The dossier reportedly alleges that Sally Donnelly, former senior advisor to Secretary of Defense James Mattis, helped write the contract to favor AWS, and that the cloud giant was a client of a company previously owned by Donnelly. Furthermore, the dossier is said to imply that a portfolio company of venture capital firm C5 Capital bought Donnelly's previous company as a way to expedite Donnelly's employment at the Department of Defense so she could help AWS.

The dossier is also said to allege that an AWS executive engaged in an improper personal relationship with an executive at C5 Capital. However, the dossier reportedly did not provide substantial proof that this relationship had any impact on the JEDI race.

Donnelly's lawyer, Michael Levy, told Bloomberg that she had nothing to do with the contract. Amazon Web Services wrote in a blog post that neither C5 nor its subsidiaries were involved in its JEDI bid. C5 Capital published its own blog post in response, disavowing any involvement with JEDI whatsoever. A spokesperson for the Department of Defense did not immediately respond to a request for comment.

The winner of the JEDI contract won't be announced until April 2019, but in the meantime, competition has been fierce. Google dropped out, citing both ethical concerns, and concerns over its ability to execute on the contract. Analysts have said Amazon likely moved HQ2 near D.C. at least in part because of JEDI.

Read more: As bidding closes, Amazon's cloud is the favorite to win a $10 billion defense deal. Here's why everybody else is so mad about it

Most recently, Oracle filed a protest on Dec. 6 in federal court after losing out in its Government Accountability Office protest. IBM had also officially filed a protest, but it was dismissed Dec. 11.

Read the full Bloomberg report here.

Get the latest IBM stock price here.

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