US judge says Amazon is likely to succeed on key argument in contract challenge

WASHINGTON (Reuters) – A US judge declared Amazon.com Inc (AMZN.O) is likely to succeed on a key argument in its challenge to the US Department of Defense’s decision to award a cloud computing contract worth up to $ 10 billion to Microsoft Corp . ((MSFT.O)

The opinion of Patricia Campbell-Smith, a judge at the United States Federal Claims Court, was released on Friday. On February 13, she issued a freeze order on the contract pending resolution of Amazon's court challenge.

Amazon claims that the contract was awarded to Microsoft due to the undue influence of President Donald Trump.

The opinion did not mention Trump or respond to Amazon's claims of undue influence, but rather focused on how the Pentagon evaluated Microsoft's data storage in a price scenario.

Campbell-Smith wrote that Amazon "is likely to succeed on the merits of its argument that DOD improperly evaluated" a Microsoft pricing scenario. She said Amazon is likely to show that Microsoft's scenario was not "technically feasible" as the Pentagon has assessed.

Microsoft spokesperson Frank X. Shaw said in a statement that the company thought it could move forward, noting the decision centered on a "single technical finding by the Department of Defense on data storage ”in a price scenario out of six. Shaw said in the sole question cited by the judge, "The government is making it clear that it believes Microsoft's solution meets technical standards and works when needed."

Amazon did not immediately comment on Saturday.

Campbell-Smith said, "In the context of a public procurement of cloud computing services, the court finds it very likely that this failure will be material."

Amazon, which had been considered a forerunner to win the contract, filed a lawsuit in November just weeks after the contract was awarded to Microsoft. Trump has publicly mocked Amazon chief Jeff Bezos and repeatedly criticized the online retail giant.

The Amazon lawsuit said the defense ministry's decision was full of "glaring mistakes", which were the result of "improper pressure from President Donald Trump."

Bezos is also the owner of The Washington Post, whose cover criticized Trump and who has often been the target of Trump barbels over the media.

The Pentagon, which had planned to start working on the contract on February 13, said it was disappointed with the decision.

As part of the lawsuit, Amazon has asked the court to suspend execution of the contract, known as the Joint Enterprise Defense Infrastructure Cloud, or JEDI. The contract aims to give soldiers better access to data and technology from remote locations.

Last month, Amazon's cloud computing unit, Amazon Web Services, said it was looking to depose Trump in his lawsuit and suggested that the president was trying to "screw Amazon" onto the contract.

David Shepardson's coverage in Washington; Editing by Ben Klayman, Matthew Lewis and Leslie Adler

Our standards:Principles of the Thomson Reuters Trust.

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