In a win for Microsoft, a Defense Department (DoD) report published this week found the decision to award the company the hotly contested $10 billion JEDI cloud contract was “reasonable” and “consistent with applicable law,” and it downplayed allegations of White House interference and DoD ethics violations.

The Pentagon in October 2019 awarded Microsoft the lucrative Joint Enterprise Defense Infrastructure cloud contract, which seeks to move about 80% of all DoD data off-premises and into a single cloud.

However, almost from the start, the contract has been mired in controversy, including allegations of rigged guidelines that strongly favored one cloud provider, presidential meddling fueled by a very public feud between President Trump and Amazon CEO Jeff Bezos, and potential ethical misconduct and conflicts of interest.

After more than 80 interviews, and turning through more than 32 gigabytes of email and documents, investigators concluded that procurement of the cloud contract had been conducted in accordance with federal regulation and that the requirements of the contract had not been unfairly restrictive to the competition.

However, investigators were unable to fully review allegations of White House influence due to “presidential communications privilege.”

According to investigators, several DoD witnesses were instructed by the DoD Office of General Counsel not to answer questions about communications between White House and DoD officials regarding the JEDI contract.

The report concluded that there was also no evidence found to suggest that the DoD personal engaged in contract procurement had been pressured or influenced by the White House staff. “The witnesses also told us that public statements from the President and ‘media swirl’ about the contract did not directly or indirectly influence the integrity of the procurement process or the outcome of the JEDI cloud source selection,” it said.

Addressing allegations of ethical misconduct, investigators wrote that despite substantiating claims of ethics violations, no evidence had been found to support claims it had influenced the award of the contract to Microsoft.

Specifically of the seven former DoD officials investigated for ethics violations, the report found only two — former Defense Digital Service Product Manager Deap Ubhi, and Stacy Cummings, principal deputy assistant secretary of defense for acquisition and acquisition enablers — had crossed the line into misconduct.

According to investigators, Ubhi, who simultaneous to working on the JEDI procurement was engaged in employment negotiations with Amazon in the fall of 2017, committed numerous ethical violations during the early stages of procurement.

Investigators found Ubhi’s actions created the appearance of a conflict of interest, however that is as far as his actions appear to have gone. “We concluded that Mr. Ubhi's brief early involvement in the JEDI cloud initiative was not substantial and did not provide any advantage to his prospective employer,” the report said.

Cummings was accused of improperly participated in contract procurement while holding a financial interest in Microsoft. This was later substantiated by DoD investigators, who found because of her stock holdings in Microsoft, Cummings should have recused herself from involvement in procurement activities.

“However, we also concluded that Ms. Cummings’ participation in the JEDI cloud procurement did not influence the JEDI contract award decision,” investigators wrote.

The report did not, however, address the appropriateness of or whether or not errors had been made in the decision to award the contract to Microsoft over rival Amazon.

Investigators note that the report does not draw conclusions regarding whether the “DoD appropriately awarded the JEDI cloud contracts to Microsoft rather than Amazon Web Services.”

That battle is still playing out in a lawsuit filed by Amazon in Federal claims court, challenging the Pentagon’s decision to award the JEDI contract to Microsoft. In February, a federal judge ordered Microsoft to cease work on the $10 billion project.

At the time, a spokesperson for Amazon said it was common practice to stay contract performance while a protest is pending. “It’s important that the numerous evaluation errors and blatant political interference that impact the JEDI award decision be reviewed,” the spokesperson wrote.

But while investigators didn't weigh in the merits of each cloud provider, investigators found several DoD officials had improperly disclosed source selection and proprietary Microsoft information to Amazon, as well as redact names of DoD source selection team members in reports disclosed to both companies.

Investigators recommended that the DoD chief management officer consider administrative action against those responsible. The report also called for the acting director of contract policy for defense pricing and contracting to consider developing new policies to prevent this from happening again.