News & Politics

Congress Forces Transparency with Pause in Amazon Cloud Computing Contract

Congress is wrapped up an appropriations process that spends way too much of the taxpayers’ dime.  Republicans and Democrats put together a giant mix of regular appropriations bills and continuing resolutions, so they can spend the next month on the campaign trail.  With all the controversy over no funding for President Trump’s wall on the southern border and Democrats push for higher spending on domestic programs, there is one little noticed provision in this giant bill that saved billions.

Government contracting is big business in Washington and Bloomberg reported last month that in the law signed by the president, appropriators inserted a little noticed provision that “would bar the Defense Dept from spending any money to migrate applications to its upcoming cloud project until Congress receives more information.” This provision effectively put a $10 billion contract for all the cloud computing at the Department of defense on hold until Congress can figure out how to avoid cronyism.  Both Vanity Fair and The Daily Caller reported in August that this process has been rigged in favor of Amazon.

Our Founders put Congress in Article I of the Constitution for a reason.  Congress has the power over spending and, the executive branch, where the powers are enumerated in Article II, executes the spending decisions of the Congress.  In the past, earmarks have been a way for Congress to funnel money to favored projects and to take away control of the directing of spending from government bureaucrats.  This ended up badly with many projects, like the infamous “Bridge to Nowhere” in Alaska, and a number of other projects that ended up in corruption.  In 2005, the bridge project was a $223 million earmark for Ketchikan, Alaska to build a bridge that was completely unnecessary, yet funneled cash to interest favored by earmark lobbyists. The power to dictate spending decisions has not always lead to great results and both chambers of the Congress stopped earmarking projects after a number of scandals rocked the Capitol.

When Congress got out of the earmarking business, that gave government bureaucrats more power to dictate how appropriated money was spent. That also led to contracting problems rife with cronyism and waste.  The Obama Administration was stung by the infamous alternative energy grant to the bankrupt company Solyndra. In 2011, the company Solyndra received a $535 million loan guarantee, the first one made under the Obama Administration’s alternative energy grant program, to manufacture a unique brand of solar panels that became obsolete when conventional solar panel technology prices went down. The company went belly up and taxpayers were on the hook for this ill-advised project authorized by the executive branch.

Now we have an example of Congress taking back the power to oversee projects and dictate how taxpayer dollars are spent that will actually save the taxpayer money. The Amazon effort to lock down a multi-billion dollar contract is controversial and it makes sense for Congress to force some transparency in the process.  Amazon is already one of the biggest companies on the planet and they have sunk a large chunk of their resources to become the largest contractor for the federal government.  When you have a monopoly in the private sector, it only makes sense to go after huge government contracts to continue to grow.

The problem is that this cloud computing contract pursued aggressively by Amazon is under a cloud of controversy.  One way to disperse the cloud is for Congress to continue the fight for clearness in every aspect of this contract to disperse any appearance of cronyism, favoritism or rigging of the contracting process in favor of one company.  Our Founders did get it right when they gave the authorization and appropriations power to Congress to stop large companies from gaming the system with cronyism and an army of lobbyist.

This new law is an example of Congress getting something right. The appropriations bill was not a great example of legislating, yet there was one nugget buried in the new law that will protect taxpayers from cronyism that has been the subject of multiple reports.  Congrats to Congress for flexing some constitutional muscle over the executive branch to force them to walk away from a dirty process that had the stink of cronyism and favoritism for one company.