Pentagon puts $10 billion JEDI contract on hold after Trump suggests it favored Amazon

FILE PHOTO: The Pentagon in Washington, U.S., is seen from aboard Air Force One, March 29, 2018. REUTERS/Yuri Gripas

WASHINGTON (Reuters) - The Pentagon has decided to put on hold its decision to award a $10 billion cloud computing contract after President Donald Trump said his administration was examining Inc’s bid following complaints from other tech companies.

The contract, called the Joint Enterprise Defense Infrastructure Cloud, or JEDI, is part of a broad modernization of the Pentagon’s information technology systems.

Oracle Corp lobbied aggressively and expressed concerns about the award process for the contract, including asking about the role of a former Amazon employee who worked on the project at the Defense Department but then recused himself, then later left the Defense Department and returned to Amazon Web Services.

Oracle and IBM Corp have since been eliminated from the competition, leaving Amazon and Microsoft Corp as finalists.

Pentagon spokeswoman Elissa Smith said Defense Secretary Mark Esper, who assumed his role on July 23, was reviewing accusations of unfairness.

“Keeping his promise to Members of Congress and the American public, Secretary Esper is looking at the Joint Enterprise Defense Infrastructure (JEDI) program,” Smith said in a statement on Thursday. “No decision will be made on the program until he has completed his examination.”

Amazon Web Services and Oracle did not immediately respond to requests for comment.

The decision delays the award of the contract, which the Pentagon had hoped would occur in August. Trump has had a contentious relationship with Amazon founder Jeff Bezos, owner of the Washington Post, which Trump has accused of unfair coverage.

Last month, four Republican lawmakers, including Mac Thornberry, his party’s senior member on the House of Representatives Armed Services Committee, sent a letter to Trump urging him to move forward with the contract.

Reporting by Idrees Ali and Nandita Bose in Washington, Additional reporting by Jeffrey Dastin in San Francisco; Editing by Peter Cooney