Amazon Claims Presidential Vendetta Cost it $10 Billion

Trump v bezos

This is not investment advice. The author has no position in any of the stocks mentioned. has a disclosure and ethics policy.

A few weeks ago we learned via an official complaint in the U.S. Court of Federal Claims that Amazon wanted an investigation into why it lost the "JEDI" contract for a large government cloud system to be used by the United States military.

At the time I did go out on a limb and say that Amazon (NASDAQ:AMZN) was taking issue with President Trump directly, given his history of negative comments about Jeff Bezos. Well today we've received a more colorful picture to relay to you.

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In an expanded filing Amazon has laid out its argument that President Trump directly interfered with a Pentagon procurement project, which is illegal according to U.S. law.

Amazon: "Basic justice requires re-evaluation.

According to the filing Trump abused the government for his own personal reasons:

The question is whether the President of the United States should be allowed to use the budget of DoD to pursue his own personal and political ends. DoD’s substantial and pervasive errors are hard to understand and impossible to assess separate and apart from the President’s repeatedly expressed determination to, in the words of the President himself, ‘screw Amazon.’ Basic justice requires re-evaluation of proposals and a new award decision.

The Joint Enterprise Defense Infastructure contract is said to be worth up to $10 billion in total contractual value and is a keystone project for the eventual winner. I say eventual because while Microsoft is the selected vendor currently, and things could change depending on Amazon's complaint in Federal court.

This source selection decision was made by an expert team of career public servants and military officers from across the Department of Defense and in accordance with DOD’s normal source-selection process. There were no external influences on the source selection decision. The department is confident in the JEDI award and remains focused on getting this critical capability into the hands of our warfighters as quickly and efficiently as possible.

It's hard to give too much credibility to the Pentagon at this point. We know quite a bit about what is already in the public realm.

For instance, in 2016 then Presidential-candidate Trump actually told a crowd that he was "very seriously" looking at getting involved in the decision according to the New York Times.

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He said [in regards to AWS] “Great companies are complaining about it,” Trump said at the time, “so we’re going to take a look at it. We’ll take a very strong look at it.”

The question is, will hard evidence be found that Trump directly instructed Pentagon officials to sway the decision towards Microsoft and away from Amazon? That answer will arrive sooner or later as Amazon's complaint works itself through the Federal court system in the coming months.


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