Aug 22, 2018

Shadowy dossier targets big Pentagon contract

Defense Secretary James Mattis. Photo: Sebastián Vivallo Oñate/Agencia Makro/Getty Images

A dossier distributed by a private investigative firm alleges that a Pentagon aide corruptly promoted Amazon's bid for a giant Defense Department cloud-computing contract, Defense One reports.

Why it matters: The controversy underscores the high stakes as the Pentagon decides who will get its 10-year, $10 billion contract. Industry rivals tell Axios that Amazon's Amazon Web Services (AWS) is the favorite in the bidding process.

The details: The official described in the dossier, Sally Donnelly, former senior adviser to the secretary of defense, used to manage a consulting firm that worked with AWS. The dossier raises questions about whether AWS paid her to guide the cloud requirements towards AWS and whether she had divested related investments.

What they're saying:

  • “While at the Department of Defense, Ms. Donnelly had no role in acquisition or procurement,” her lawyer told Defense One in a statement. According to government filings Defense One and Nextgov obtained, she divested her entire stake in the consulting firm, SBD Advisors (now ITC Global Advisors), when she went to work for Defense Secretary James Mattis.
  • The Pentagon’s press secretary, Dana White, told Defense One, “A team of department experts developed the requirements and solicitation, and members of that team were screened for conflicts of interest and advised on compliance with applicable procurement and ethics laws. Neither Secretary Mattis, Ms. Donnelly, nor anyone else in the secretary’s front office participated in drafting the requirements or the solicitation. Any assertion or suggestion to the contrary is false.”
  • ITC Global Advisors dismissed allegations Donnelly or the firm had influence on the proposal or that Donnelly could profit from a deal.

AWS suggests its rivals have been pushing the dossier.

  • “These types of misleading articles are fueled by old guard technology companies who have resorted to these types of unseemly tactics ‎because they’re struggling to compete effectively in open competitions in the private and public sectors,” a spokesperson told Defense One and Nextgov.
  • Oracle has filed a protest to the Pentagon’s request for proposals, claiming the Department of Defense has created an “anti-competitive” environment. Oracle has been vocal about the Pentagon’s contracting processes related to Amazon in the past.
  • Per Defense One, Oracle did not respond to requests for comment about whether it was leading an effort to undermine Amazon or providing funding for the dossier or RosettiStarr, the firm behind the dossier. IBM said it was “not involved” in the dossier. A Microsoft spokesperson said the company “does not comment on active RFP processes.”

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