The war between President Donald Trump and Amazon.com Inc. has escalated to the point the Department of Defense and lawmakers are getting involved.
And this time, it could cost the online retail giant $10 billion.
Shortly after Amazon seemed on the brink of a cloud-services contract with the Department of Defense, Trump questioned the validity of the contract award. He said he heard complaints from two other companies eliminated from the contract competition — Microsoft Corp. and Oracle Corp.
But, this is not the first time Trump has gone after Bezos and Amazon.
Last March, Trump attacked Amazon for its shipping practices and the negative impact they have on retailers and even local governments.
I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!
— Donald J. Trump (@realDonaldTrump) March 29, 2018
A year before that, he hammered Amazon in a tweet claiming the company was “doing great damage to tax paying retailers.”
Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt – many jobs being lost!
— Donald J. Trump (@realDonaldTrump) August 16, 2017
The August tweet sent Amazon shares down as soon as the market opened, resulting in a $6 billion decline in the company’s market capitalization.
In relation to the $10 billion Pentagon contract, Charles Tiefer, a law professor at the University of Baltimore, told Bloomberg it is not common practice for government procurement to have any political interference.
“The bidding process is expected to be conducted by the contracting officer without political interference,” Tiefer said, “and especially not political interference from the highest official in the White House.”
Tiefer said he had no financial connections to the companies involved.
Trump’s interference also came on the heels of Amazon’s quarterly earnings report, which came out Thursday. The company reported a second-quarter profit of $5.22 a share — analysts forecast $5.56 a share.
Amazon seemed the frontrunner for the defense contract, according to Bloomberg, considering the company had already been awarded a $600 million cloud contract with the Central Intelligence Agency in 2013.
After the Pentagon announced it was looking for a single company for its contract, competitors Microsoft, IBM, Dell and Oracle lobbied against Amazon, according to a Bloomberg report.
The divide became deeper after Oracle lost a legal challenge in the U.S. Court of Federal Claims, leaving the path open for Amazon or Microsoft to win the contract.
Bloomberg also reported Wisconsin Republican Sen. Ron Johnson and Florida Republican Sen. Mark Rubio both questioned the “fairness of the procurement” with Trump. Interesting enough, Rubio has received $5.4 million from Oracle founder, Larry Ellison, for his presidential and Senate campaigns since 2015, according to Bloomberg.
Johnson received PAC money from Microsoft — $19,000 between 2015 and 2019 — and both senators did get PAC money from Amazon — Rubio received $12,500 and Johnson picked up $10,500 in the same period.
Regarding the contract, incoming Secretary of Defense Mark Esper has said he will consult with the Pentagon inspector general before the contract is officially awarded.