Please ensure Javascript is enabled for purposes of website accessibility

Judge Says Court Will Likely Side With Amazon Over Microsoft In JEDI Dispute

By Danny Vena - Mar 9, 2020 at 1:08PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The decision will likely hinge on a technicality and not "improper pressure" from President Trump.

Court documents unsealed on Friday explained the reasoning behind a judge's decision ordering Microsoft (MSFT 1.07%) to halt work on the $10 billion cloud computing contract for the Pentagon known as the Joint Enterprise Defense Infrastructure Cloud (JEDI).

The decision by U.S. Court of Federal Claims Judge Patricia Campbell-Smith, who issued the ruling, was unsealed late last week. In issuing the decision, the judge noted that (AMZN 3.15%) is "likely to succeed on the merits of its argument that the DOD improperly evaluated" Microsoft's bid. 

A soldier using a rugged laptop computer during military operation in the desert.

Image source: Getty Images.

It's important to note that the judge ignored Amazon's high-profile arguments of "improper pressure from President Donald Trump" in the selection process. Instead, Campbell-Smith focused on one of several pricing proposals by Microsoft that should not have been allowed under terms of the biding process. 

While the Pentagon found the scenario to be "technically feasible," Amazon would likely prevail in showing that it shouldn't have been permitted. "In the context of a procurement for cloud computing services, the court considers it quite likely that this failure is material," the judge wrote.

The judge's decision hinged on the requirement that the cloud solution be "highly accessible" to JEDI users "without human intervention," but that Microsoft's proposal didn't meet the minimum criteria.

This "evaluation error" gave Microsoft an unfair advantage in the bidding process. Campbell-Smith went on to note that even if the "deficiency did not result in [Microsoft's] elimination from competition" for the contract, by not meeting the minimum performance requirements, Microsoft was able to offer a lower price.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
$259.58 (1.07%) $2.75, Inc. Stock Quote, Inc.
$109.56 (3.15%) $3.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.