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Amazon Feels the Force

Posted  October 17, 2019

It’s a reoccurring joke that our government services are a little behind on technological times.  President Obama’s staff famously panicked in 2008 when confronted with the outdated state of White House technology.  Although some things have improved in the last decade, the federal government still remains slow to adapt to technological change.

The Pentagon is now trying to get on board with the cloud-computing change, taking bids for the fancifully named “JEDI” contract (which stands for the less fanciful Joint Enterprise Defense Infrastructure project), worth $10 billion.  Large silicon valley companies are competing fiercely for it, much to the chagrin of some of their employees who do not want their companies to become part of the military-industrial complex.

As of now, Amazon is the reigning favorite to win the contract.  (President Trump even called it “the Amazon” contract in August, although no winner has been named.)  Some competitors have accused the Pentagon of specifically designing the contract terms such that Amazon as the leading provider of cloud services is the only possible contractor.  Those concerns have been echoed by congressional members, including Senator Grassley.  The complaints are currently derailing the bidding process, which remains on hold while the Department of Defense Inspector General investigates.

Regardless of the fate of the JEDI contract, Amazon appears to be in the government-contracting business for good, eagerly embracing the opportunity to compete for government dollars.  With every government contract comes the risk for fraud, which could give rise to liability under the False Claims Act.

Indeed, the first cybersecurity whistleblower case recently settled.  Constantine Cannon represented the whistleblower, who alleged Cisco Systems had knowingly left a major security vulnerability in video surveillance software sold to government agencies. As Amazon (and other tech companies) move more aggressively into the government contracting space, other tech whistleblower cases are sure to follow.

If you have any information about tech industry fraud, please contact us.

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Tagged in: Defense Contract Fraud, FCA Federal, Government Procurement Fraud,


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