DOD watchdog can't prove White House interference in $10B JEDI award

An oversight report found several missteps and cases of ethical misconduct, but could not substantiate allegations of White House interference in the award of the $10 billion Joint Enterprise Defense Infrastructure contract to Microsoft.

The long-awaited report from the Defense Department Office of Inspector General, released April 15, did not include answers from White House officials on charges that personal animus on the part of President Trump to Amazon founder and CEO Jeff Bezos had an effect on the contract award.

At the White House, the report revealed DOD CIO Dana Deasy briefed then acting White House Chief of Staff Mick Mulvaney on JEDI cloud. Additionally, Deasy contacted Chris Liddell, a deputy chief of staff, for information on how to get "correct information" to Trump on JEDI on July 29. According to the report, Liddell told Deasy that "President Trump was not engaging anyone on the topic."

Confirming White House involvement directly was not possible for OIG. According to the report, OIG "could not review this matter fully" because of assertions of privilege when it came to communications between DOD and White House officials on the cloud procurement, with DOD witnesses being ordered by senior DOD lawyers not to talk.

"We could not definitively determine the full extent or nature of interactions that administration officials had, or may have had, with senior DoD officials regarding the JEDI Cloud procurement," the report states. Additionally, deeper in the report, OIG officials note that as an executive branch agency and due to the law authorizing IGs to conduct internal investigations of federal agencies, they are permitted to obtain such privileged information.

However, according to the report, the White House stonewalled DOD lawyers on the matter of privilege. The IG also took the step of permitting lawyers from DOD's Office of General Counsel to sit in on interviews with key players including Defense Secretary Mark Esper and Deputy Secretary David Norquist "for the sole purpose of objecting to the witness responding to any questions that would elicit information about meetings or communications with the President or his advisors and staff that they believed were exempt from disclosure to the OIG because of the need to protect “presidential communications."

Despite these conditions, the OIG report concludes that the DOD personnel involved in source selection and evaluation "were not pressured regarding their decision on the award of the contract by any DoD leaders more senior to them, who may have communicated with the White House."

The Defense Department agreed in a statement, saying that the report confirms that DOD "conducted the JEDI Cloud procurement process fairly and in accordance with law" and found that "there was no influence by the White House or DoD leadership on the career source selection boards who made the ultimate vendor selection."

Watchdog groups were less thrilled with the process of investigating White House interference.

"The IG couldn’t say definitely whether there was improper White House involvement in this contract because the White House didn’t cooperate with the investigation," Liz Hempowicz, director of public policy at the Project on Government Oversight said in a tweet.

Sen. Jack Reed (D-R.I.), the ranking member of the Senate Armed Services Committee, said the recent removal of Glenn Fine as acting DOD IG, "appears connected to his willingness to do his job and ask hard questions."

"The White House' assertion of some kind of 'communications' privilege is part of a pattern of refusing to answer questions and ethical lapses by a president who wants no independent oversight and is firing inspectors general left and right," Reed said in a statement.

Microsoft welcomed the finding. "The Inspector General's report makes clear the DoD established a proper procurement process," company spokesman Frank Shaw said. "It's now apparent that Amazon bid too high a price and is seeking a do-over so it can bid again. As the IG's report indicates, Amazon has proprietary information about Microsoft's bid that it should never have had. At this stage, Amazon is both delaying critical work for the nation's military and trying to undo the mistake it made when it bid too high a price."

The argument that the White House did interfere in the source selection remains a key matter in an ongoing lawsuit by Amazon Web Services.

"This report doesn’t tell us much," an AWS spokesperson said in a statement emailed Wednesday night. "It says nothing about the merits of the award, which we know are highly questionable based on the judge’s recent statements and the government’s request to go back and take corrective action."

The spokesperson added that "this report couldn’t assess political interference because several DOD witnesses were instructed by the White House not to answer the IG's questions about communications between the White House and DOD officials" and stated that the non-cooperation with the IG probe, "is yet another blatant attempt to avoid a meaningful and transparent review of the JEDI contract award."

Disclosures to AWS

The report also found that a contract specialist shared proprietary information with AWS about Microsoft's bid in the JEDI procurement within an hour of the award being made on Oct. 25, 2019. Four days later, defense contract specialists realized the mistake when AWS questions seeking a more substantial debriefing about the award included proprietary Microsoft information.

The disclosure of proprietary information set off a flurry of bureaucratic finger-pointing described in detail in the report. One key element here is that DOD's Washington Headquarters Services contacted AWS to ask why the company didn't notify DOD about the disclosure of proprietary information and why AWS used that information in crafting its post-award debrief questions.

"All offerors have an obligation to conduct themselves with integrity and in accordance with the law," officials told AWS.

For its part, according to the OIG report, AWS "reasonably presumed that DoD appropriately" in supplying post-award information.

The OIG concluded that by sharing Microsoft's information, "the DoD also potentially provided AWS an unfair advantage in the cloud services marketplace." The report recommends that officials take up administrative and disciplinary action against individuals involved in neglecting to review reports for adequate redactions and for disclosure of proprietary information.

So far, DOD has not provided the response sought in the report from Director of the WHS Acquisition Directorate, the Chief Management Officer and other senior officials who supervise the rank-and-file contract specialists and managers who were responsible for the disclosures.

Conflicts of interest

The report did substantiated conflict of interest allegations against former Amazon employee Deap Ubhi but, as was found in a federal court, indicated that his involvement with the JEDI procurement was not sufficient to taint the outcome. OIG recommended to DOD that this misconduct be taken in mind should Ubhi ever apply in the future for a security clearance.

The report also revealed that senior DOD acquisition official Stacy Cummings participated in JEDI despite a declaration of ownership of between $15,001 and $50,000 in Microsoft stock. Similarly, the IG report found that Cummings' involvement in JEDI did not steer the decision to award the contract to Microsoft, but did recommend that DOD consider action against Cummings for the violations such as counseling or training.

The U.S. Attorney for the Eastern District of Virginia declined to pursue charges against Cummings or Ubhi and declined also to elaborate on the reasons for those decisions in the OIG report.

This story was updated April 15 with comment from Amazon Web Services and other sources.