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Top Amazon Boss Privately Advised US Government on Web Portal Worth Billions To Tech Firm (theguardian.com)

Posted by msmash on from the tussle-continues dept.

A top Amazon executive privately advised the Trump administration on the launch of a new internet portal that is expected to generate billions of dollars for the technology company and give it a dominant role in how the US government buys everything from paper clips to office chairs. From a report: Emails seen by the Guardian show that the Amazon executive Anne Rung communicated with a top official at the Government Services Authority (GSA) about the approach the government would take to create the new portal, even before the legislation that created it -- known to its critics as the "Amazon amendment" -- was signed into law late last year. Amazon and the Trump administration appear to have an antagonistic relationship because of the president's frequent Twitter attacks on the Amazon founder, Jeff Bezos, who also owns the Washington Post. But the behind-the-scenes lobbying by Amazon officials underscores how the company has quietly amassed an unrivalled position of power with the federal government.

The 2017 correspondence between Rung -- a former official in the Obama administration credited with transforming the federal government's procurement policies before she joined Amazon -- and Mary Davie at the GSA, offers new insights into how Amazon has used key former government officials it now employs -- directly and as consultants -- to gain influence and potentially shape lucrative government contracts. It has not yet been determined which companies will build the US government's new e-commerce portal, but Amazon is widely expected to take on a dominant role, giving it a major foothold in the $53bn market for federal procurement of commercial products.

56 comments

  1. And how by Anonymous Coward · · Score: 1

    Exactly am I supposed to take advantage of the government if they are allowed to walk around asking questions of experts? Disgusted I am. That is the absolute worst thing I have ever heard.

    1. Re: And how by Anonymous Coward · · Score: 1

      It's all about which "experts" they ask and what answers they get.

      In this case, they're basically handing money to their "friends in high places" who are as qualified to comment on this subject as Trump is to give reviews on hotel dining.

    2. Re: And how by Type44Q · · Score: 1
      That is the most blatant and incompetent attempt at shilling that I've seen in a while.

      Thanks for the chuckle.

  2. its called rent-a-friend by Anonymous Coward · · Score: 1

    it sounds sleazy, but its an absurdly common part of the business of government to call people you know in industry for advice. this happens for essentially two reasons.

    1) government workers will tell you a realistic, if unsatisfying truth, whereas industry will tell you what you want to hear, the way you want to hear it.

    2) appointees are always on the lookout for executive jobs when their appointment is over.

    that said, sometimes the advice is pretty good, and not what the bureaucrats would have come up with, typically because they arent up to speed on the latest thing.

  3. Rungs by mentil · · Score: 4, Funny

    Amazon executive Anne Rung

    I bet her coworkers are willing to step on her in order to climb the corporate ladder.

    --
    Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
    1. Re:Rungs by Anonymous Coward · · Score: 0

      Only if they bave a better Golf Handicap than her... As El Trumpo loves the game I guess that advice came well before thr 19th hole.

      Don't use Amazon. If they keep on going the way they are, they will soon be the only retailer left. Then they can dictate the prices. Low prices? Forget it...

  4. Federal procurement is a hot mess by MikeRT · · Score: 4, Interesting

    I think the procurement kabuki is a key part of why there is a lot of malaise in the federal workforce. It takes an incredible amount of paperwork compared to the private sector to do something as simple as drop $50k on new IT equipment that has been identified as a key need. For example, you can't just do this:

    Government PM: "Mr. Contracts Officer I have 20 contractors onboarding over the next 6 weeks. I need 20 new laptops, 20 new monitors and 20 new keyboard/mouse setups."
    Contracts Officer: "Sounds good, I'll call John Smith at Dell after lunch and arrange a purchase order. I'll tell him to expedite the shipping so the first new hires hit the ground running."

    That is what the public would like. That is also what would get both parties sent to prison for violating multiple procurement statutes.

    But hey, no appearance of impropriety if we can beat you unconscious with the paperwork.

    1. Re:Federal procurement is a hot mess by DalM · · Score: 4, Interesting

      That's not true at all.

      The whole point of the GSA program is to streamline services. When you have an approved GSA schedule, the government has pre-negotiated rates for your services (It's a complicated process, whereby the company has to promise to give the Federal Government their lowest prices. It's actually illegal to provide a lower price to anyone else.) That contract officer you mention *can* in fact pick up the phone and call and call any GSA technology supplier and order the equipment based on the pre-negotiated rates.

      Granted, the specific ask you mention for laptops would probably have to be procured competitive bid since it's unlikely any supplier would have pre-negotiated rates for whatever specific laptops they are needing. But, in government, it's pretty rare that jobs just come up out of no where unexpectedly where they need to direct hire 20 people where they couldn't just move some folks around temporarily from other projects. And even that event would be rare. MOST likely what would happen in your situation is that the government would just contract that particular need that is causing the staffing out to a consultant company that has a GSA schedule, and the consultant can hire who ever they like and buy whatever equipment they like.

    2. Re:Federal procurement is a hot mess by JaredOfEuropa · · Score: 1

      My experience (in a different country though):

      PM: "I need 20 new laptops, desks & chairs, a coffee machine and a water cooler, and an armored personnel carrier"
      Procurement: "That's fine, they should be ready by the time your contractors show up for work"
      PM: "Oh and I need a couple of thumb drives"
      Procurement: "Erm... how about we schedule a meeting so we can review your exact requirements? Then we can go over the list of suppliers, request bids, and we'll have them in 3 to 4 business months"

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    3. Re:Federal procurement is a hot mess by Anonymous Coward · · Score: 1

      It's actually illegal to provide a lower price to anyone else.

      Not quite. It is a violation of the contract that is signed when agreeing to do business with the government, as you are required to give them accurate information on how your other customers are treated.

      Which can stretch into fraud, but may simply be a tort.

    4. Re:Federal procurement is a hot mess by DalM · · Score: 1

      Yes. That's closer to the reality of US Federal procurement.

    5. Re:Federal procurement is a hot mess by Anonymous Coward · · Score: 0

      Still sounds like a fucking nightmare. You're not selling it.

      Also - illegal to provide a lower price to anyone else? What the fuck is this place Soviet Russia? Government price controls and criminal statutes for adjusting prices? Holy fucking shit who would want to be a government or corporate slave who could get thrown in prison for violating some obscure law? It is not a selling point to crow about the increasing number federal criminal penalties for non violent "crimes".

      Talk about the boiling frog.

    6. Re:Federal procurement is a hot mess by DalM · · Score: 1

      Except in this particular case the entity the contractor would be defrauding is the Federal Government.

      The punishment for doing so would depend on the severity, but it's likely to get you a visit from the FBI.

    7. Re:Federal procurement is a hot mess by DalM · · Score: 1

      Easy there, Soldier of Freedom.

      The federal government isn't forcing anyone to do anything. It's a program they offer to help streamline their procurement. You're business can apply to be a part of it if you like. No not, whatever. Most businesses don't because it's a heck of a lot of work to get in, but if you choose to agree to the terms there is a lot of work you can get.

    8. Re: Federal procurement is a hot mess by Anonymous Coward · · Score: 0

      Except in this particular case the entity the contractor would be defrauding is the Federal Government.

      It isn't necessarily fraud, it is possible to violate a contract without meeting the criteria for fraud.

      The punishment for doing so would depend on the severity, but it's likely to get you a visit from the FBI.

      Any number of acts can get an FBI visit though.

    9. Re:Federal procurement is a hot mess by The+Snazster · · Score: 1

      No, I spent some time as a contracting officer for a federal installation. It was ridiculous.

      Say I needed twenty buttons for a communications console that are only made by AT&T. Buying them from AT&T would have required 3 days of paperwork justifying why I had to buy them from the only manufacturer, despite the fact they were not a small business and were not female or minority owned. Instead I would would call three such companies, probably operating out of the family garage, who had no idea what I wanted, but would get back to me. Then they called AT&T, would get a price, then call me with that price plus around ten percent. And I was instructed to get it from which ever one was cheapest, rather than take the 3 days of my time working up a small purchase order. In that one case, once I had the overpriced quotes, and because I was young and outraged, I called AT&T, explained the problem, and they sent us the buttons as a free sample, but you certainly can't count on that happening very often, and I had dozens of purchase orders a day to cut.

      The GSA schedule was a joke, too. In many cases, I would have been money and time ahead just to jump in my car and drive over to Wal-Mart or Home Depot and buy whatever it was. Hell, I probably could have filled hundreds of work orders a day on that basis.

      Now I use Amazon for a lot of my basic needs at home because it's generally a good price and tends to come right to my front door when they say it will. Personally, I suspect this could be a serious win-win-win for Amazon, the government and, of course, us taxpayers.

      Really glad I bought some stock in Amazon. but that's beside the point, I'd sell it and boycott them if I really felt like they were taking advantage of me.

    10. Re:Federal procurement is a hot mess by Anonymous Coward · · Score: 0

      That free sample was illegal. A gift to the Govt from a prohibited source.

    11. Re:Federal procurement is a hot mess by DalM · · Score: 1

      Under what statute? How is ATT a prohibited source? You can't give a gift to an employee, but you can give time and materials to a project.

    12. Re:Federal procurement is a hot mess by Anonymous Coward · · Score: 0

      Funny what you've described is exactly how procurement work in gov in other places. How else can it work? In the case of laptops and accessories everything needs to be whitelisted and compatible. Dell wins a particular contract and gets to supply their garbage for X years.

    13. Re:Federal procurement is a hot mess by rtb61 · · Score: 1

      Which in the end, is why it is better for Governments to do as much internally as possible. Contracting stuff out, is not about reducing price, it is all about introducing increasing levels of corruption, just the way it is. Part of the problem is being forced to take the lowest price, in private business only idiots always take the lowest price, smart people always work to price performance ratios, getting the most bang for the buck. Government works smoother when it is all internal, the more they contract out, the worse the performance and the greater the final price (not the initial one, that's cheap but it never ever lasts) and the greater the corruption.

      How to make money on government procurement systems run and controlled by private corporation, put in back doors to track tender prices and underbid and there will be back doors, on purpose because the system has to be maintained by private for profit contractors and the more corrupt they are the lower their bid can be.

      --
      Chaos - everything, everywhere, everywhen
    14. Re:Federal procurement is a hot mess by Anonymous Coward · · Score: 0

      Actually, all they have to do is update the price they give to GSA to match the new, lower price.

    15. Re: Federal procurement is a hot mess by Anonymous Coward · · Score: 0

      Also, if they refuse to give you their best prices you can kidnap and rape their daughters and sell their wives off into third world economies. Government doesn't know the bounds of good taste or humanity. You're rich? That's cute...is it in dollars? Good night.

  5. New National Holiday by Anonymous Coward · · Score: 0

    I think this coming January 3rd should be declared a national holiday.

    We can call it "Investigation Day". Think about it - 2/3 of the country will be celebrating.

    1. Re: New National Holiday by Anonymous Coward · · Score: 0

      I prefer to call it "Adult Supervision" Day as clearly the Infant Terrible needs proper guidance as he tries to use a phone call to the troops to brag about his penis size.

    2. Re: New National Holiday by Anonymous Coward · · Score: 0

      2/3 of the country is scrambling to find a New Yearâ(TM)s Eve party right now and keeping their phones on silent while they surf the web looking for parties. I suppose because they already have flashy bling they expect to bring it to a party. How do the other 1/3 live exactly?

  6. And then ... by GrumpySteen · · Score: 5, Informative

    30-40 other industry people advised the US government, offering many suggestions on rewriting the amendment to make it more open to other businesses besides Amazon.

    And congress listened to them and made changes, which basically made everyone happy except the government contractors who were making a killing selling $37 screws, a $7,622 coffee maker and $640 toilet seats to a government that wasn't allowed to buy from other sources.

    And all this happened over a year ago.

    1. Re:And then ... by Anonymous Coward · · Score: 0

      https://en.wikipedia.org/wiki/USS_Thresher_(SSN-593)
      Because we don't want nuclear secrets to end up on the bottom of the ocean (AGAIN), or have to worry about irradiating civilians (AGAIN) we have to use the strictest QA procedures for extracting the ore that will become our screws, and washers on submarines, carriers, and multi-billion dollar nuclear bombers.

      That level of QA is not cheap.

  7. I don't see anything wrong here by DalM · · Score: 1

    Amazon: You know, you guys should make a new website. This one sucks. We would do it like this.
    Government: That's a good idea, we'll make a recommendation to congress for them to order us to to procure one.
    *GovernmentpProduces specifications based off of Amazon's recommendations, Opens procurement to competitive bid*
    *Government receives qualified bids*
    *Government awards contract to lowest qualified bidder (Amazon)*

    I really don't see anything wrong with Amazon informally petitioning their government to fix something, so long as the government follows through on that petition with a formal standard procurement process.

    1. Re: I don't see anything wrong here by Anonymous Coward · · Score: 0

      The scenario where procurement happens quickly is common when qualified people are handling procurement. Generallly the government ought to act in best interest of the public. There are very few statutes that specify precisely what that means. If a government agent believes an action is in the best interest of the public they are free to pursue it. Only the people selling expensive screw drivers would have you believe otherwise. In fact I would fire people for using rules as excuses to make decisions that were not good for the public

  8. arriving late with inferior/damaged goods by Anonymous Coward · · Score: 0

    nothing really new in centuries? cease fire stand down.. there are mothers and children in every town.. in the moms we trust..

    1. Re: arriving late with inferior/damaged goods by Anonymous Coward · · Score: 0

      I have never had this problem. A few minutes late maybe, merchandise always pristine

  9. [federalnewsnetwork.com is harmful by Anonymous Coward · · Score: 0

    federalnewsnetwork.com is listed as a harmful website by all of my wesbsite filters.

    WTF is GrumpySteen paying at?

    1. Re:[federalnewsnetwork.com is harmful by Anonymous Coward · · Score: 0

      I got through just fine, and the filters here are pretty strict...

    2. Re: [federalnewsnetwork.com is harmful by Anonymous Coward · · Score: 0

      Lemme guess you typed something and pressed submit? (Eye roll)

  10. Curious by argStyopa · · Score: 5, Insightful

    I find it interesting that the story repeatedly references "the Trump" administration in attack sentences, but later buried in the text we find out the Amazon exec doing the surreptitious advising...used to be in the Obama administration? (My suggestion is that she's likely simply leveraging personal contacts for personal/corporate enrichment.)

    Do you really think Trump had a hand in making Bezos richer? Really? Because there's some cognitive dissonance here: Trump can't be a complete know-nothing boob nincompoop AND ALSO a criminal mastermind meticulously micro-managing the development of an Amazon-favoring web portal?

    "But the behind-the-scenes lobbying by Amazon officials underscores how the company has quietly amassed an unrivalled position of power with the federal government. " TBH Amazon has generally amassed an unrivalled position of power WITH ALL OF AMERICAN COMMERCE.

    --
    -Styopa
    1. Re: Curious by Anonymous Coward · · Score: 0

      amazon so nosy. Drinking at the teat of the federal government. Anybody think that maybe trump is just incredibly fortunate? Or he has been watching the wrong YouTube videos.

    2. Re:Curious by Anonymous Coward · · Score: 0

      It's more of a non-story than that: The Amazon exec has talking to the GSA. However, the "Amazon amendment" was written by Congress - an entirely different branch of government.

      On top of that, the "Amazon amendment" was later revised after dozens of other industry executives, from companies like Microsoft and Oracle, contacted Congress to ask for changes, undoing all the Amazon-specific stuff.

      This article attempts to paint the picture of an Amazon-government conspiracy and corrupt officials, but it actually just shows that government procurement is an insanely complicated mess, where the biggest players in the market have lots of influence. What a shock.

  11. too narrow scope by Anonymous Coward · · Score: 0

    how the US government buys everything from paper clips to votes.

    FTFY.

    Posting AC because not having time to log in due to black heli outside needing my attention.

  12. Not surprising by Registered+Coward+v2 · · Score: 1

    First, you have someone who can bring federal procurement and private sector expertise to the table; helping to bridge the gap. Career employees think linger term than just the current administration. They follow the rule set forth by the administration, but they have to live with the results long after the administration changes. Some are also considering their post-government gig and it doesn't hurt to have private sector contacts for when they leave; and that doesn't mean they will violate the law while in the government but their door is open when needed. Finally, every large company tries to influence legislation and contracts. Sometimes smaller ones do too if they are the incumbent and want to have the best chance of winning.

    --
    I'm a consultant - I convert gibberish into cash-flow.
  13. Couple quick questions by kenh · · Score: 2

    1) Amazon offers quality products at reduced prices and delivers customer-focused service - these are the reasons they have been so successful - why shouldn't the federal government consider purchasing goods and services from Amazon, just as countless millions of Americans do?

    2) If the woman from Amazon was highly-regarded for revolutionizing government procurement under Obama administration, why does she instantly turn evil when she steps into Amazon?

    3) Since when is seeking/accepting advice from industry experts (in this case the woman that used to head this up this department under the previous administration) BEFORE passing legislation considered a bad thing? Better government officials should refuse to speak with industry experts before passing legislation?

    It is amazing how a simple story can be twisted to try and attack this administration. At it's roots, this story is very simple:

    "Before drafting legislation that will change/revolutionize the way the federal government spends an estimated $53BN/yr on various office supplies, the current administration consulted with the highly regarded woman that previously was credited with revolutionizing government spending."

    Yeah, imagine, someone in the Trump administration working with experts from the previous administration to address issues in gov't spending. - those corrupt bastards!

    --
    Ken
    1. Re: Couple quick questions by Anonymous Coward · · Score: 0

      I honestly do not know what peoples problem is. I mean they have literally gotten everything from the government they have ever asked for and then bitch bitch bitch and throw shit. Is it any wonder government is looking for experts? Any wonder government will keep the best experts around indefinitely?

  14. Subtitle by Anonymous Coward · · Score: 0

    He still needs to learn that being the biggest penis isn't the same as having the biggest penis.

    Anyway, sorry for all the temper tantrums. We're still trying to ween him off his binky. This is clearly gonna take a while.

    Sincerely,
        The Republican Party

    P.S. - Oh, yeah, and sorry about the coming recession, too. Don't worry, we're already prepping his 2020 campaign slogan. This is what we got so far:
      * #MAGA - (Make America Great Again)
      * #MAGA...aA...aA . . . - (Make America Great Again . . . and Again . . . and Again . . .)
      * #SIFUOER.PP,VFMA,SIDLLAOTD - (Sorry I Fucked Up Obama's Economic Recovery. Pretty Please, Vote For Me Again, So I Don't Look Like A One Term Douchebag)
      * #BTW!!WAYLA?NR,IMIT.BM. - (Build The Wall!! What Are You Laughing At? No Really, I Mean It This Time. Believe Me.)
      * #P!!BC&N!! - (Pwned!! By Chuck & Nancy!!)
      * #GFTGSR - (Going For The Government Shutdown Record)

    P.P.S. - We're debating adding a subtitle to the last one: IDWPWYNM!!ITMKAGH!! - (I Don't Wanna Play With You No More!! I'm Taking My Kickball And Going Home!! )

    1. Re: Subtitle by Anonymous Coward · · Score: 0

      Talk to the binky. Unless you live in Beijing then you could just talk.

  15. Orange Man Bad!! by Anonymous Coward · · Score: 0

    Ahhh, soooo!! Orange Man Bad!!!! He No Comprehend!!! We no talk to Orange Man!! We too busy 'raffing at him!! ROR!!!

  16. summarized by astrofurter · · Score: 2

    Article summarized: Amazon does same lawfully-crooked things as other megacorps, reaps similarly lucrative rewards.

    1. Re:summarized by cstacy · · Score: 3, Insightful

      Article summarized: Amazon does same lawfully-crooked things as other megacorps, reaps similarly lucrative rewards.

      Lawful-Evil is the term you are looking for.

      You know, back when this used to be a geek site...

    2. Re: summarized by Anonymous Coward · · Score: 0

      Nerds != Geeks

  17. WTF is the Government Services Authority? by Anonymous Coward · · Score: 0

    GSA = General Services Administration. If they can not get the name of the agency right, what else about this article is wrong?

    1. Re:WTF is the Government Services Authority? by Anonymous Coward · · Score: 0

      Check the link. The Guardian got it right, as usual. The original poster (msmash) screwed it up. Easy to click the link and check it out.

  18. Nazi Crony Capitalism, CHECK! by Anonymous Coward · · Score: 0

    So #freedumbs very #Amerika

  19. You're making my point by MikeRT · · Score: 1

    Granted, the specific ask you mention for laptops would probably have to be procured competitive bid since it's unlikely any supplier would have pre-negotiated rates for whatever specific laptops they are needing. But, in government, it's pretty rare that jobs just come up out of no where unexpectedly where they need to direct hire 20 people where they couldn't just move some folks around temporarily from other projects. And even that event would be rare. MOST likely what would happen in your situation is that the government would just contract that particular need that is causing the staffing out to a consultant company that has a GSA schedule, and the consultant can hire who ever they like and buy whatever equipment they like.

    I know about the GSA schedule. It helps, but not nearly enough.

    The situation you describe is quite easy to create.

    1. Contractor wins new contract.
    2. Contractor submits a bunch of resumes.
    3. Personnel security screens them one by one. Some come on faster than others.
    4. Multiple days of mandatory training and paperwork to get everything setup.
    5. No one got GFE supplied; they also need GFE per the terms of the contract that the government itself wrote.

    The government frequently sees the jobs coming months in advance and no one in the "support branches" was preparing for it. No one. There are times I honestly don't know how some government PMs don't lose it and get hauled out in handcuffs with the amount of crap they often have to put up with.

  20. Awful! by nospam007 · · Score: 1

    1.Firm sells office supplies.
    2. Client buys office supplies.
    3. Firm advises on how to order office supplies to save money in the future..
    4. Scandal, because ...I don't see it.

  21. Really, this is news? by Anonymous Coward · · Score: 0

    Heck, AWS has it's own pure Gov AZ if I remember correctly. Any corp as big as Amazon, Apple, Google, etc have so many employees and contribute so much to their homeland economies that it's no surprise at all how deeply involved they are with their government. There's probably so much more going on on a day-to-day basis between the corps and the gov that we never get to hear about. It's in the gov's interest to keep huge corps running and feeding the economy and it's in the interest of the corps to stay close to the gov for lucrative contracts and tax breaks. It's been happening since the early civilizations first learned the imporatance of organised finance, trading and keep the gov or king sweet, it's not going to change any time soon.

  22. What is the Government Services Authority? by wiredog · · Score: 1

    I've been doing Federal contracting for years and I've never heard of them. Are they part of the General Services Administration?

    --

    Best Slashdot Co