According to The Wall Street Journal, surging profits at Amazon of late have less to do with the expansion of the company’s core business of selling merchandise and allowing third parties to sell merchandise online.
Rather, Bezos has managed to build Amazon Web Services into the cloud computing equivalent of his behemoth e-tailer by allowing tens of thousands of firms to outsource their services.
Nevertheless, following years of growth, revenues for the AWS venture have fallen off of late, making it all the more vital for the company to snag a multi-billion dollar cloud computing contract from the Pentagon via JEDI — the Joint Enterprise Defense Infrastructure, or the Defense Department’s cloud infrastructure, according to TechTarget.
In addition to Amazon, IBM, Google, Microsoft, and Oracle all put in bids for the estimated $10 billion project. But only after it appeared as though Amazon was going to be a shoe-in to win it did the project become embroiled in controversy, with IBM filing a complaint with the Government Accountability Office.
But there’s more smoke and, possibly, some fire as well, according to the WSJ:
Amazon.com Inc. and Microsoft Corp. were designated in April as finalists for the contract, drawing complaints from rival companies including Oracle Corp. and International Business Machines Corp. , which say the contract-award process was skewed from the start to favor Amazon—an allegation both the Pentagon and Amazon dispute.
Defense Department emails reviewed by The Wall Street Journal could give the contract’s opponents more ammunition, providing a new window into Amazon’s interactions with Pentagon officials in the months leading up to the announcement of the massive cloud deal…
The emails indicate that on March 31, 2017, then-Defense Secretary James Mattis went to a dinner in London with the vice president of AWS, Teresa Carlson. Though a person who helped organize the dinner say the subject of cloud computing did not arise, the dinner nevertheless paved the way for another meeting in August of that year between Mattis and Bezos, according to emails.
In addition, DoD officials who had links to Amazon, which is HQ’ed in Seattle, also helped set up meetings for Carlson with officials representing Mattis, including his chief of staff around the same time, the emails show.
What was discussed during those meetings was not spelled out in the emails, but it’s not hard to believe the talks weren’t about baking, grandkids or needlepoint. (Related: Trump is going after Big Tech’s evil monopolies and censorship: amazon.com now being targeted by the FTC.)
Pentagon officials have denied any wrongdoing and have claimed that the bidding process wasn’t tainted but instead “open, transparent, and full.”
But Oracle has also filed a complaint, this one with the U.S. Court of Federal Claims, alleging that a former employee for Amazon who was working in the Pentagon helped craft a deal that assisted the e-tail behemoth before returning to Amazon.
“It is highly irregular that the Secretary of Defense attended a small, private dinner for ‘off-the-record’ discussions with an Amazon sales executive,” Kenneth Gluck, who runs Oracle’s Washington (lobbying) office, told the WSJ.
Some lawmakers are also suspicious, including Sen. Charles Grassley (R-Iowa). He told the WSJ: “We shouldn’t have to tolerate conflicts or appearances of conflicts of interest in any government contracting process.
True. But the JEDI contract “would cement Amazon’s status as a major player in Washington,” the WSJ noted.
As well as a member in good standing of the military-industrial complex and the Deep State.