Jeff Bezos and President Trump have enough in common that they could be friends.
One is the world’s richest man; the other its most powerful. Both are Ivy Leaguers who turned small fortunes from their parents into huge fortunes and brands recognized worldwide.
But they are not. Bezos has turned the Washington Post from the venerable news leader that broke the Watergate story into a factory of screeching anti-Trump narrative, and Trump has responded by creating a task force to look at Bezos’s sweetheart delivery deal with the Postal Service.
But it’s not about the Post or the Post Office. It’s about cronyism. Trump was elected to drain the swamp, and Bezos is now its most invested inhabitant.
Bezos’ Amazon Web Services provided the data that helped President Obama get re-elected in 2012. With more than 100 lobbyists at more than a dozen agencies, his lobbying shop is now among the most powerful in Washington. He spent $13 million on lobbying last year, more than all but Google and AT&T, and five times what he spent just three years ago.
He’s joined the Alfalfa Club in Washington, where he hob-nobbed at a recent meeting with Ivanka Trump, George W. Bush, Bill Gates, Warren Buffett and Mitt Romney, among others. He is said to talk to his friend, Secretary of Defense James Mattis, nearly every day.
He has even dangled the prospect of locating Amazon 2, his proposed additional headquarters, in the D.C. area.
Bezos is not here out of any love for Washington. He was born in Albuquerque, grew up in Texas and lives now in Seattle. He is here to protect his businesses, and his ability to navigate the swamp has produced alarming results.
He used his entrée from helping Obama in the campaign – one Amazon executive said the company saved the campaign “tens of millions of dollars” in IT investment – to start winning contracts across government.
He’s gone from one $300 million contract to provide cloud-computing services to the government to a $1.5 billion agreement last year that will grow to $2.8 billion this year and $4.6 billion in 2019. He also has contracts with the CIA and the Smithsonian Institute
He pushed Congress to adopt the “Amazon amendment,” which would allow employees to bypass normal purchasing methods and buy more of their own supplies, from cleaning supplies to bottled water, through amazon.com and fell short only when other vendors, such as Home Depot, objected.
He has a private rocket company, Blue Origin LLC, that he hopes will one day win NASA contracts to send people and equipment into space. He wants permission to use drones to deliver packages over long distances, which is currently banned in the United States.
In true swamp dweller fashion, he greases wheels on both sides of the aisle – the $637,500 he donated in 2016 was equally divided among Democrats and Republicans.
And now he is on the verge of pulling off his biggest deal yet – a sole-source contract that would pay Amazon $10 billion to provide cloud-computing services to the Pentagon for up to a decade.
The Pentagon says the contract will be for only two years with options to extend for up to a total of 10 years. But given it expects to spend $420 million through 2020 to migrate all users to the new cloud, vendors say it is unlikely any firm but Amazon will get the contract for the remaining eight years.
The Pentagon says scattering information “across a multitude of clouds” would hurt its efforts to “access and analyze critical data” and may even require additional equipment the military does not want to purchase or have its personnel carry and maintain.
Industry groups and other vendors, who submitted more than 1,000 comments to the Department of Defense, say a sole source contract “dilutes the benefits of best practices, strongly increasing the likelihood of vendor and technology lock-in, and negatively impacting innovation, costs and security.”
The opposition group, led by Oracle, also pointed out the CIA has been under contract with Amazon Web Services since 2013 for its cloud computing needs, but it added another vendor this year. As one Microsoft executive put it, “It’s kind of an awakening as far as the intelligence committee is concerned that you can’t be a one-cloud community.”
The Department of Defense has suspended work on the contract for now, although it says it still intends to offer it on a winner-take-all basis by this fall. The anti-swamp forces better use that time wisely to make the case for not putting all the cloud computing eggs in one basket because the dwellers certainly will.