Amazon continues to ride high as consumers flock to the online retailer. The recent success of Prime Day delivered untold millions into the company’s revenue stream. Consumer sales aren’t the only means Amazon makes money. The billion-dollar corporation relies on government contracts for big deals. A $10 billion contract with the Pentagon, however, may be in trouble. The Trump Administration decided now to review the potential agreement. If canceled, Amazon would lose out on all those billions.
The government has not awarded Amazon the JEDI Contract for cloud services. Microsoft remains in the running. Other companies could possibly receive the contract, but this is unlikely. Up until this point, however, most insiders felt Amazon was a lock to secure the contract. Only Microsoft and Amazon met the basic requirements for approval. The administration, however, intends to order a review the agreement. Bipartisan concerns exist about the “no bid” nature of the deal.
The concerns about Amazon’s acquisition of the JEDI contract come from both elected officials and other companies. Questions about fairness arose. If Amazon is receiving preferential treatment, this would go against the proper way government contracts are issued. Companies that meet essential criteria make bids. Therefore, Amazon must bid on the lucrative contract and compete for it with Microsoft.
Contrary to what some assume, Amazon is not out of contention for the contract. A review of the process could deliver a positive outcome to the Amazon. If Amazon is capable of providing better service at a better price than Microsoft, no reasonable excuse exists to deny Amazon the deal. That said, if Microsoft feels it suffers from unfair treatment, the company has a right to complain.
Amazon found itself mired in controversies recently over its tax deals. The company earns tremendous profits and legally does not pay much in taxes. While the company broke no laws, Amazon suffers in the court of public opinion. Hence, it now faces greater scrutiny.