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U.S. defense chief recuses himself from review of the $10 billion cloud-computing contract

WASHINGTON (Reuters) – the united states Secretary of Defense Mark Esper has been removed from the review of an alleged $10 billion cloud-computing deal, because of a possible conflict of interest, a move to further delay the contract award process.

FILE PHOTO: U.S. Secretary of Defense Mark Esper, addresses reporters during a media briefing at the Pentagon in Arlington, Virginia, USA, 11 October, 2019. REUTERS/Erin Scott

Jesper has delegated decision-making regarding the Joint Venture, Defence and Infrastructure in the Cloud (JEDI) program to the Assistant Secretary, and David Norquist, the Pentagon said on Tuesday.

“Although it is not legally required to do so, and that he (Esper) has been deleted by myself, to take part in the decision-making process … due to the adult son’s employment with one of the original agreement to the applicant (s),” the chief Pentagon spokesman, Jonathan Rath Hoffman said in a statement.

Secretary, Jesper’s son, Luke Esper, is a digital strategy consultant for IBM Services, which is part of IBM Corp., with effect from February, a company spokeswoman said. IBM had bid for the contract, but was eliminated from the competition.

Est son, the role is not related to IBM’s performance of the JEDI order, she added.

Usually the contract is part of a broad-based modernization of Pentagon information technology systems and is involved in a conflict-of-interest allegations involving a former Pentagon employee who worked on the contract, and Amazon.com Inc.

The Pentagon put the contract on hold in August, after the President when He said that the government was investigating Amazon’s offer as a result of complaints from other technology companies.

For example, Oracle Corporation lobbied aggressively, and has expressed its concern over the award procedure for this contract.

Oracle has since been eliminated from the competition, leaving Amazon and Microsoft Corp as competition.

Some of the technology companies were also in a matter of a couple of would be the winner an unfair advantage in the follow-on work. The Pentagon said it planned to use the award for future cloud based offerings to multiple contractors.

The Pentagon has spent about $38 billion on information technology projects for fiscal year 2019, while $6.5 billion was used for cloud-based projects, the it sector is growing at about 30% per year, according to the analysts of Jefferies Group LLC.

Reporting by Nandita Bose in Washington; Editing by David Gregorio, Tom Brown and Lincoln Feast

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