WASHINGTON — Concerns from President Donald Trump and some members of Congress are jeopardizing a massive, multibillion-dollar contract for a cloud computing program at the Department of Defense that has been poised to be awarded to Amazon or Microsoft.
The president has raised questions about the contract with at least two senators in recent days, a troubling signal for the $10 billion contract to build the Pentagon’s Joint Enterprise Defense Infrastructure, or JEDI, program, which would house all Defense Department data and services on a cloud-based service.
Asked about the program in the Oval Office by reporters Thursday, Trump discussed his concerns for the first time publicly.
“I’m getting tremendous complaints about the contract with the Pentagon and Amazon,” he said. “They’re saying it wasn’t competitively bid, this is going on for a long time, I guess probably before this administration. And we’re looking at it very seriously, it’s a very big contract, one of the biggest ever given.”
Critics, including lawmakers with oversight of the department, have expressed concern that the contract proposal process shut some potential companies out and that the program poses a long-term risk to national security because it consolidates information under one company.
Trump discussed the issue with Sen. Ron Johnson, R-Wisc., chairman of the Senate Homeland Security Committee, aboard Air Force One on Friday on the way to a trade event in Milwaukee, according to Johnson. Trump also called Sen. Marco Rubio, R-Fla., who is a member of the Foreign Relations Committee, about the issue later Friday, Rubio’s spokesman Nick Iacovella said.
Johnson and Rubio are two among half a dozen lawmakers who have raised questions in letters to administration officials about the lack of competitive bidding and possible conflicts of interest in the process.
Amazon is widely regarded as the leading contender for the contract but Microsoft is also in the running. Two other companies, Oracle and IBM, were eliminated early on in the process.
Johnson would not characterize the president’s concerns but said Trump is knowledgeable about the pending contract. “The president’s aware” of the concerns and asked to see the letters “directly,” he said.
Iacovella told NBC News that after Rubio’s conversation with the president, the senator was under the impression that Trump was considering canceling the contract.
Neither the White House nor the Defense Department has responded to requests for comment.
The president has long feuded with Amazon’s owner Jeff Bezos, who also owns The Washington Post. In January, the president called him Jeff “Bozo” in a tweet, adding, “Hopefully (The Washington Post) will soon be placed in better, more responsible hands!”
If Trump or the White House were to intervene, it would be inappropriate and highly unusual because it’s an issue for Congress and the Pentagon, said Evelyn Farkas, a former deputy assistant secretary of defense under President Barack Obama.
“This is for Congress and the Defense Department to sort out, and given the president’s history of tension with Jeff Bezos, it would look like political interference,” she said.
The Pentagon is in the final stages of the bidding process for the 10-year, $10 billion contract for the cloud computing system. Those familiar with the process say Amazon is the only company that meets all the requirements for the contract and is the favorite to win it.
The initial contract process began under Obama but it was officially opened for bids in August 2018. Both Defense Secretaries Jim Mattis and Patrick Shanahan defended the program. Shanahan, before he stepped down, told Congress earlier this year that the bidding process is not anti-competitive. He said this cloud is for “a very small subset of the amount of cloud infrastructure we’re going to have to build out over time.”
But the bidding process has been controversial since it began and some companies in the cloud computing industry, including Oracle, balked at the contract’s requirements and that the Pentagon intended to use a single vendor for such a massive project, ignoring what they said were best practices.
And there have been conflict of interest concerns. Johnson wrote a letter June 24 to acting Defense Secretary Mark Esper that said, “apparently, at least two DOD employees who played a role in the JEDI procurement process had connections to a company bidding on the contract.”
A federal judge rejected that argument in a decision Friday in a case brought by Oracle, noting that the company didn’t meet the requirements to win the contract. The Defense Department’s Office of Inspector General is conducting its own investigation as requested by Reps. Steve Womack, R-Ark., and Tom Cole, R-Okla.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, has been in contact with the Pentagon as well over the concerns but has not been satisfied with the answers so far. He advocates that the Pentagon start the process over.
“There are so many questions here, with the JEDI cloud computing contract, that the department ought to just start over,” Grassley said.
He and Johnson believe that at the very least, the Pentagon should hold off until the inspector general completes its investigation.
Rubio wrote to John Bolton, Trump’s national security adviser, last week that a one-vendor contract stymies innovation and competition. “Competition ensures vendors will continuously integrate innovations that improve cost, capability, and security for DOD,” he wrote.
And the House Appropriations Committee wrote in its defense funding bill that it will not fund the JEDI program until the Pentagon gives to Congress a plan to eventually transition to a multicloud computing system. And the committee wants quarterly reports on the implementation of the cloud computing strategy.
Democrats reject climate debate push from activists
SAN FRANCISCO — The Democratic National Committee on Saturday quashed a push from climate activists and some national party members who want a 2020 presidential primary debate devoted exclusively to the climate crisis.
The national party committee voted 222-137 at its summer meeting in San Francisco against a resolution that effectively would have rolled back debate rules set by Chairman Tom Perez and freed presidential candidates to participate in a climate-only debate.
The move drew rebukes from the Sunrise Movement and other activists who say the party leadership is ignoring young voters’ priorities.
“The Democratic Party needs the energy and motivation of young people to win in 2020,” said Evan Weber, Sunrise Movement political director. “The energy around this issue has been incredibly clear, yet Tom Perez keeps shooting the party in the foot by rejecting that energy and turning it away.”
Perez has said throughout the primary campaign that he opposes making any of the party’s official debates revolve around a single issue. Perez said this week in San Francisco that he wants the widest possible audiences for primetime debates, with voters getting to see candidates address a full range of issues.
And he’d barred candidates from participating in any non-party event where candidates would appear on the same stage at the same time. An influential party committee had voted Thursday effectively to “encourage” candidates to ignore that rule. The vote Saturday by the full party committee struck down that language.
Perez has encouraged candidates to participate in issue-specific forums that don’t involve multiple candidates being on the same stage together. CNN, for example, has planned a climate forum in September, with at least 10 candidates expected to appear individually and discuss climate policy in-depth. Powerful organizations such as the National Education Association and the AFL-CIO already have hosted such events focused on their policy priorities.
Perez aides also noted this week that he’s gotten requests from different interest groups requesting full-fledged debates on civil rights, guns, poverty and issues affecting older Americans.
The wrangling this week came in the wake of Washington Gov. Jay Inslee ending his presidential bid that he’d hinged on a pledge to make climate action the nation’s top priority. Inslee was able to attract more than 130,000 individual donors — the mark the DNC set as one qualifying metric for the September debate stage. But Inslee was well shy of an additional requirement to hit 2% support in at least four national or early nominating state polls from reputable pollsters.
Inslee had repeatedly called on Perez to dedicate a DNC-sponsored debate to climate action.
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Trump arrives at G-7 summit fixated on trade war
As Trump left the White House late Friday night, he told reporters that he has the authority to stop U.S. companies from doing business in China amid an escalating tariffs tit-for-tat between the two countries.
“I have the absolute right to do that,” Trump insisted.
Trump also said his trade war with China “is more important than anything else right now just about that we’re working on.”
As the president spars with China, a move that threatens to drag down the U.S. economy, he arrives at the Group of Seven Summit angling to start another trade dispute with Europe.
Trump plans to turn up the volume on his accusations of unfair trade practices by America’s closest allies, a favored campaign talking point, according to senior administration officials.
And ahead of the meeting, Trump revived his attacks on Europe.
At a campaign rally in New Hampshire last week, he called out German Chancellor Angela Merkel and accused European countries of “killing us on trade.” At a fundraiser last week in the Hamptons, New York, he suggested that he may put a 100 percent tariff on French wine, according to a Bloomberg report.
As he was leaving the White House Trump was tepid about his relationship with the group of America’s closest allies, calling the leaders he’ll be sitting down with “mostly friends.”
Trump has a series of one-on-one meetings lined up Sunday with the world leaders.
As he arrived the summit’s host, French President Emmanuel Macron, gave a televised speech laying out his priorities for the meeting.
He said one of his main goals will be to convince leaders that a global trade war is bad for all, but acknowledged that not all the leaders shared his view.
Drawing attention to the fires raging in the Amazon rainforest, Macron said the world is at a tipping point.
“I promise you, in your name, to do my maximum to get those to agree,” Macron said in a direct address to the French people.
At an impromptu photo opportunity over lunch, Macron said they planned to discuss crises in Syria, North Korea, Ukraine and Iran, and acknowledged the disagreement Trump has with the other leaders on climate change.
“We know the divergences we have on climate,” he said. “But our cooperation will be to reduce carbon emissions.”
Of Macron, Trump said they “have a lot in common” and that “once in a while we go at it just a little bit, not very much.”
He wants to look tough on China to appease his base of supporters, but he risks throwing the U.S. into a recession ahead of next year’s election, undercutting one of his main selling points for why he deserves a second term.
Trump said Friday he would be putting a new round of tariffs on Chinese goods in retaliation for new Chinese tariffs on $75 billion in U.S. goods. He once again said Chinese policy has caused billions of dollars of lost revenue to U.S. companies. The country, he said, “has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more.”
Late Friday, the president tweeted that he has broad powers to regulate U.S. economic interests abroad, urging journalists to “try looking at the Emergency Economic Powers Act of 1977. Case closed!”
The International Emergency Economic Powers Act allows a president to prohibit most trade with a perceived foe “to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared.”
The law requires a president to explain his action to Congress, and it allows Congress to shut down the action. It was enacted to limit presidential power by further defining it and encoding congressional oversight.
The U.S. stock market fell sharply after China announced it would slap retaliatory tariffs on American soybeans, crude oil and cars. The Dow Jones Industrial Average closed the day down 623 points, or 2.4 percent.
The president in recent days has sought to calm fears about the economy, brushing off talk of a recession and defending his actions on China.
But despite his public reassurances, inside the White House there was growing acknowledgment that the U.S. needs to settle the standoff with China before it takes a bigger toll on the economy.
Adam Edelman and Kristen Welker contributed.
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