A few weeks ago, my colleague Doris Berke sent me a story from the New York Times, which gave us both deja vu.
Reported about the work According to the Trump administration officials, he “donated” an online service that managed a wireless connection and cell reception in the White House.
The donation has embarrassed some former officials given in history. But this immediately impressed us as the potential iteration of the Trump’s tested maneuver, which we spent months, reporting last year. In what is the investigationWe focused on the transactions between Microsoft and Biden Administration. The agreements were based on the fact that most consumers understand: “free” offers usually have catch.
Microsoft began to offer federal government “free” upgraded cybersecurity and consulting services in 2021, after President Joe Biden pressed technology companies to help strengthen the country’s cyber. Our investigation has shown that the alleged altruistic proposal of the White House, as it was known in Microsoft, is called for a more complex, profitable agenda. The company knew the notorious catch: after the free trial, federal customers who accepted the offer and installed the modernization would be blocked effectively in preserving them because the transition to a competitor will be expensive and bulky at the moment.
Former Microsoft staff told me that the company’s proposal was similar to drug users who connect free samples. “If we give you a crack and you take a crack, you will like a crack,” one said. “And when the time comes for us to pick up the crack, your end users will say,” Don’t take it away. “And you will have to pay me.”
What Microsoft predicted internally has gone. When the free tests are over, the huge sections of the Federal Government retained modernization and started paying higher subscription fees, unlocking billions in future sales for the company.
Microsoft stated that all agreements with the government were “ethically and fully complied with federal laws and rules”, and that its sole purpose during this period was “raising the security of federal agencies that were constantly aimed at the complex entities of the nation -state.”
But state contracts told me that the campaign maneuvers were legally insignificant. They bypassed the competitive process, which is the basis of public procurement, closing competitors from a profitable federal business and, in expanding, thinking innovation in the field.
Having read the Times’ story about Starlink’s donation to the White House, I checked with these experts.
“It doesn’t matter whether it was Microsoft last year or today Starlink today or another company,” – said Jessica TilipmanAssociate Dean of Legal Studies of Public Procurement at George Washington’s University Law School. “Whenever you do, it’s the back door around the competition processes that guarantee that we have the best goods and services from the best sellers.”
Usually, in the process of competitive bidding, the government requires proposals from the suppliers of the goods and services it wants to buy. Then these suppliers submit their proposals to the government, which theoretically choose the best option in terms of quality and cost. The distribution is bypassed by the whole process.
However, to hear how the secretary of the commerce Howard Lutnita tells, the Trump administration wants not only to normalize such donations, but also to encourage them on Washington.
Last month during appearance on Silicone Valley podcasts “All-In“He sailed into the concept of the seller” Free “, which” gives the product. Government. You just give things to the government. You literally give yourself. You’re not looking for anything. You don’t take money. “
Since President Donald Trump has taken the post in January, Musk, which is classified as an unpaid “special employee of the Government”, has made providing his services to the President and the product from his companies “”No taxpayer costs“The White House donation was only the last step. 4000 terminals.
During our Microsoft investigation, the sellers told me that under the campaign, the obvious “final game” transformed state users into paid subscriptions after a free trial and ultimately received a market share for Azure, its cloud platform. It is unclear what the final game is for Moscow and Starlinka. None of them answered the e -mail questions.
The federal law has long tried to limit the donations of the government, to a great extent to maintain costs.
At least in the 19th century, the executive officers concluded contracts without seeking the necessary financing from a congress that was supposed to have the power of the wallet. Legislators did not want the taxpayers to be on the hook to spend that Congress did not assign, so they passed the Anti -Deficiency Law, the version of which remains in force today. One part restricted “voluntary services” to protect the alleged volunteer later, demanding a state payment.
But in 1947, the General Accounting (now called the Government accountable department), which proposes opinions about financial laws, accepted the release: providing what has become known as “free services” will be allowed as long as the parties agreed “in writing” and in advance.
Microsoft used this release to transfer consulting services, which were estimated at $ 150 million to its public customers, concluding the so-called joker services. To give out actual cybersecurity products, the company provided the existing federal customers of “100% discount” per year.
It is unclear whether there were agreements on gratuitous services for the distribution of Musk. The White House and FAA did not answer written questions. Also did not make SpaceX. Official said The New York Times Last month, a lawyer at the White House’s lawyer’s office checked Starlink to the White House.
For the experts I consulted, written agreements can help companies fulfill a letter of the law, but of course not with the spirit of it. “That Eve LyonA lawyer who worked for four decades as a federal government specialist.
Lyon said that the consequences of the distribution, no matter how transferred, may be far away, and government officials “cannot understand the loss at the beginning.”
Tillipman agreed, saying that the risk of duties on points was particularly detected when it comes to technology and IT. Users become dependent on one supplier, which leads to “lock the supplier,” she said. It is too fast to tell you what will happen from Starlink donations, but the Microsoft White House’s offer gives preview what is possible. According to its goal at the beginning, the world’s largest software campaign continues to expand its mark throughout the federal government while performing with the competition.
Source from last year’s investigation Microsoft recently called for catching up. He told me that when the government is recorded in Microsoft, rivals continue to get out of federal contracts. When I asked for an example, he shared the 2024 document from the Defense Information Systems Agency or the Disa dealing with the Ministry of Defense. The document describes “Exception with a fair opportunity” in the purchase of various new IT services, saying that the order of $ 5.2 million “will be issued directly by Microsoft.”
Excuse? Microsoft’s transition to another supplier “will lead to extra time, effort, costs and performance.” Disa did not answer the questions by email.
Doris Burke have made research.
