Microsoft challenges NSA cloud contract reportedly awarded to Amazon

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President Donald Trump speaks with Satya Nadella, Chief Executive Officer of Microsoft, and Jeff Bezos, Chief Executive Officer of Amazon during an American Technology Council roundtable in the State Dinning Room at the White House in Washington on June 19, 2017.

Jabin Botsford | The Washington Post | Getty Images

Microsoft has filed a protest with the Government Accountability Office against the National Security Agency, challenging its award of a cloud computing contract.

The protest, filed July 21, seeks to dispute the NSA’s decision to award the $10 billion contract to Amazon, trade publications Nextgov and Washington Technology reported Tuesday.

The NSA contract to Amazon comes on the heels of the Pentagon’s decision to cancel its $10 billion cloud contract, known as JEDI, or Joint Enterprise Defense Infrastructure. The JEDI deal, embroiled in a lengthy legal battle between tech giants Amazon and Microsoft, had become one of the most tangled contracts for the Pentagon.

The NSA contract, also worth up to $10 billion, is code-named “WildandStormy” and is intended to modernize the agency’s classified data storage, Nextgov reported.

In a statement to CNBC, a spokesman for the NSA said the agency “recently awarded a contract for cloud computing services,” declining to elaborate further on the matter.

“The unsuccessful offeror has filed a protest with the Government Accountability Office. The Agency will respond to the protest in accordance with appropriate federal regulations,” the spokesman added.

A Microsoft spokesperson told CNBC in a statement: “Based on the decision we are filing an administrative protest via the Government Accountability Office. We are exercising our legal rights and will do so carefully and responsibly.”

Amazon Web Services, the company’s cloud computing unit, referred questions to the NSA.

The lucrative JEDI cloud contract was intended to modernize the Pentagon’s IT operations for services rendered over as many as 10 years. Microsoft was awarded the cloud computing contract in 2019, beating out market leader AWS.

A month later, AWS filed a lawsuit in the U.S. Court of Federal Claims protesting the JEDI decision.

The company argued former President Donald Trump’s bias against Amazon and its then-CEO, Jeff Bezos, influenced the Pentagon to give the contract to Microsoft.

Last year, the Pentagon’s inspector general released a report saying the award didn’t appear to be influenced by the White House.

However, the inspector general noted in the 313-page report published in April 2020 that it had limited cooperation from White House officials throughout its review and, as a result, it could not complete its assessment of allegations of ethical misconduct.

A Pentagon official said on a call with reporters the litigation itself was not necessarily the main reason for the shifted approach. But given how much the landscape changed during the intervening time, the agency determined its needs had also shifted.

— CNBC’s Jordan Novet and Lauren Feiner contributed reporting to this article.

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