SATURDAy, MARCH 7 , 2020. THE WASHINGTON POST EZ SU A
Economy & Business
DEFENSE INDUSTRY
Judge: Amazon ‘likely
to succeed’ in lawsuit
A federal judge has concluded
that a bid protest lawsuit
brought by Amazon over
President Trump’s intervention
in an important Pentagon cloud
computing contract “is likely to
succeed on the merits” of one of
its central arguments, according
to a court document made public
Friday.
The document provides the
first indication of how Judge
Patricia Campbell-Smith of the
U.S. Court of Federal Claims
might rule in a high-stakes bid
protest over the Pentagon’s JEDI
cloud computing contract, which
was awarded to Microsoft in
October following intervention
from the White House and
members of Congress.
In a blow to Microsoft and the
Defense Department, Campbell-
Smith recently ordered the
Pentagon to halt work on JEDI.
(Amazon founder and chief
executive Jeff Bezos owns The
Washington Post.)
A Defense Department
spokesman expressed
disappointment in the ruling but
declined to comment on its
specifics. Microsoft spokesman
Frank X. Shaw downplayed the
ruling, saying it focused on a
single technical factor. Amazon
representatives did not
immediately respond to requests
for comment on Friday’s ruling.
Campbell-Smith has not yet
ruled on Amazon’s contention
that Trump interfered personally
in the bidding process, and the
opinion published Friday did not
mention the president by name.
The Joint Enterprise Defense
Infrastructure contract, betterknown as JEDI, calls for a
powerful cloud computing
system through which military
agencies can harness data
centers operated by a
commercial tech company.
—Aaron GreggTECHNOLOGYTrump orders halt
to Chinese acquisitionP resident Trump ordered the
Chinese acquisition of a hotel
property management software
company reversed on national
security grounds.
Trump ordered Beijing Shiji
Information Te chnology to
unwind its 2018 acquisition of
StayNTouch, the White House
said in a statement on Friday.
Trump said there was
“credible evidence” the Chinese
company “might take action thatthreatens to impair the national
security of the United States.”
The order marked the third
time Trump has blocked a
foreign takeover of a U.S. firm
while citing concerns about
national security.
The administration has
ramped up scrutiny of Chinese
acquisitions of U.S. businesses
over risks to national security.
The panel that reviews foreign
investments in U.S. firms, the
Committee on Foreign
Investment in the United States,
has thwarted a number of
Chinese deals, especially for
technology companies.
— Bloomberg NewsBIOTECHNOLOGYStem-cell pioneer to
get $191 million in saleA Stanford Universityprofessor and stem cell pioneer is
poised to receive a $191 million
windfall from the sale of the
immunotherapy biotech firm he
co-founded.
Irv Weissman, 80, owns
4.2 percent of Forty Seven Inc.,
which Gilead Sciences agreed to
buy for about $4.9 billion, a
remarkable amount considering
the company’s market value was
less than $250 million just five
months ago.
Forty Seven is named for a
molecule found on healthy and
cancerous cells that emits a
“don’t eat me” signal that allows
cells to go undetected by the
immune system. Working in
their Stanford lab, Weissman,
fellow founder Ravindra Majeti
and Siddhartha Jaiswal
identified the role of CD
proteins in the progression of
cancer stem cells into a more
malignant form.“The whole system is set up to
be able to look at dangerous cells
and eat them,” Weissman said in
a phone interview. CD47 can
interfere with that, allowing
cancer to spiral if ignored by the
body’s defenses.
— Bloomberg NewsALSO IN BUSINESS
More than 250 private equity
firms operating in France have
pledged that women will make
up 40 percent of their investment
teams within a decade, according
to the country’s leading industry
association. The companies also
committed to putting women in
at least a quarter of senior roles
by 2030, according to the charter
published by France Invest on
Friday. Advent International and
Carlyle Group were among the
larger international private
equity firms to sign up to it.
— From news servicesDIGESTing’s senior vice president for
space and launch. “We had all
agreed to that plan, and we exe-
cuted the plan. And it wasn’t g ood
enough.”
As a result, NASA is now plan-
ning on embedding some of its
software experts with Boeing’s
team to more rigorously oversee
its work and testing.
“We had delegated too much
authority to the software board to
approve changes,” Loverro said,
referring to the engineering team
reviewing software processes.
Meanwhile, NASA’s probe of
Boeing and its processes contin-
ues, as the space agency tries to
figure out when it will allow
Boeing to try again.
“We’ll evaluate the results of
their work,” Loverro said. “A nd
we’ll be in a position to decide
whether or not we need another
test flight or not. We are still a
ways away from that. And I can’t
even tell you what the schedule is
for making that decision because
it’s very dependent upon what we
see as Boeing’s corrective action
plan.”
A r epeat of the test would come
at an enormous cost for a pro-
gram that is governed by a “firm
fixed-price cost” contract. In case
it does have to repeat the test,
Boeing has taken a $410 million
charge, it said during its most
recent earnings call.
Boeing has been under enor-
mous financial strain since the
grounding of its 737 Max airplane
fleet after two fatal crashes killed
a total of 346 people. Both the
Max and Starliner failures were
tied to software problems, and
Chilton said Friday that the issues
discovered during the Starliner
investigation have been shared
with the commercial airplane di-
vision.
christian.davenport
@washpost.comground — one that could have
caused the service module to
crash into the crew module be-
fore the spacecraft reentered the
atmosphere.
“It’s important to remember
we went into this flight... with a
test plan,” said Jim Chilton, Boe-problem that went undiscovered
because Boeing’s p reflight testing
had been cut short and had used a
faulty computer simulator.
While Starliner was in flight,
Boeing uncovered another soft-
ware problem that should have
been unearthed by testing on theday, we can fly astronauts safely
on Starliner.”
The test of Boeing’s Starliner
ran into trouble almost from the
moment it was hoisted into space
shortly before Christmas. The
spacecraft’s internal clock was off
by 11 hours, a significant softwareits attempt to fly humans again
from U.S. soil.
Given that lives are on the line,
Loverro added: “I want to make
sure everybody understands that
we at NASA are taking this very
seriously.... And we’re going to
make sure that at the end of theBY CHRISTIAN DAVENPORTIn the initial days and weeks
after Boeing’s t est flight of its new
spacecraft went awry, the compa-
ny and NASA went to great
lengths to highlight the positives
of the mission — how, as NASA
Administrator Jim Bridenstine
said then, “a lot of things went
right.”
But more than two months
after the test mission was cut
short by what Boeing and NASA
now acknowledge were potential-
ly catastrophic software errors,
the space agency is being far more
blunt about the poor perfor-
mance of one of its most trusted
contractors and dictating the
steps Boeing must take to fix the
serious problems that have been
uncovered.
In a call with reporters Friday,
NASA officials said an indepen-
dent investigation of the marred
test flight of Boeing’s Starliner
spacecraft has produced 61 cor-
rective actions and identified 49
gaps in Boeing’s testing proce-
dures. A decision on whether
Boeing will be allowed to proceed
with flying astronauts or have to
redo the test mission without
humans on board may be months
away, they said.
“We could have lost a space-
craft twice during this mission,”
said Doug Loverro, NASA’s a ssoci-
ate administrator for human ex-
ploration and mission opera-
tions. “So clearly this was a close
call.”
Along with SpaceX, Boeing is
under contract to build a space-
craft to fly NASA’s astronauts to
the International Space Station
as part of the space agency’s
Commercial Crew Program.
NASA hasn’t had the ability to fly
astronauts since the space shuttle
was retired in 2011, and has faced
numerous delays and setbacks in
NASA takes tougher tone on Boeing’s spacecraft problems
JONATHAN NEWTON/THE WASHINGTON POST
Workers assemble Boeing’s Starliner spacecraft last June. Its test flight in December was marred by software malfunctions.○
DOW 25,864.
DOWN 256.50, 1.0% ○NASDAQ 8,575.
DOWN 162.98, 1.9% ○S&P 500 2,972.
DOWN 51.57, 1.7% ○GOLD $1,672.
UP $4.40, 0.3% ○CRUDE OIL $41.
DOWN $4.62, 10.1% ○10-YEAR TREASURY
UP $14.80 PER $1,000; 0.76% YIELDCURRENCIES
$1=105.39 Y EN, 0.89 EUROSabout the leisure and hospitality
industries g oing forward. Chinese
travelers are suddenly missing
from major tourist destinations,
and Visa warned of a significant
blow to profits from reduced trav-
el and tourism to and from Asia.
Global airline stocks have shed
$41 billion in value, or 25 percent
of the sector’s market cap, in the
past month. The International Air
Transport Association is predict-
ing an 11 to 19 percent drop-off in
global passenger revenue this
year, driven by falls in airfreight
and cargo.
“Many of these industries, such
as leisure and hospitality, are
among those most likely to be
affected by the coronavirus and
related fears,” Nick Bunker, eco-
nomic research director at In-
deed, wrote in a commentary.
“This forward momentum could
help t hese industries weather t his
shock, but also raises t he possibili-
ty t hat job growth m ay s low s ignif-
icantly if the impact of the virus
hits these industries hard.”
Industries with large numbers
of workers who can do their jobs
from home are less likely to be
affected, said Julia Pollak,
ZipRecruiter’s l abor economist. In
the past three years, ZipRecruiter,
an online employment market-
place, has seen the share of job
postings that offer work from
home increase 40 percent.
[email protected]
[email protected]
[email protected]As investors have largely fled
global stocks in the past two
weeks, many have piled into the
safety of U.S. government debt,
which pays a low yield but carries
low risk. At its current price, the
10-year Treasury bond is paying
less than 1 percent interest. The
10-year note is a crucial global
financial measure that can be an
indicator of future economic
health, as well as a marker for
mortgage rates and car loans.
“The low yield on the 10-year
Treasury is a sign that the inves-
tors are very concerned about fu-
ture growth in the economy,” said
Eric Jacobson, a senior research
analyst at Morningstar. “That’s
what happens. When people are
worried about everything else,
th ey run to Treasurys because
they know they are going to get
paid back.”
The labor market data showed
just how far the economy had
come before the coronavirus out-
break began taking its toll. Te m-
porary jobs, which may have been
one of the first employment areas
affected by the coronavirus, de-
clined by 3,300 in February.
The February data shows that
women continue to outnumber
men in the workforce, a threshold
that was crossed in December for
only the second time in history.
Wage growth continued to
climb, with workers seeing their
average hourly earnings rise 3 per-
cent i n the past year.
Still, economists are worriedare under $50 per barrel. They
will drop like flies over the course
of the second half of the year if
prices don’t move higher.”
Stalled production at Chinese
factories has dealt blows to toy-
makers and electronics manufac-
turers alike, many of which were
already dealing with the unpre-
dictability of Trump’s trade war
with China. Earlier this week, the
Federal Reserve took the unusual
step of cutting the b enchmark U.S.
interest rate by half a percentage
point, to get ahead of economic
and financial fallout from the cor-
onavirus.ing, travel and consumer spend-
ing. Analysts are predicting that
global growth this quarter could
slow to the lowest levels since the
financial crisis.
The price o f oil dropped sharply
Friday as talks b etween OPEC and
Russia over production cuts col-
lapsed without a deal. B rent c rude
was down 8 percent, to about $
a barrel, by late morning.
“This is an existential threat to
many oil companies if the price
per barrel doesn’t stabilize and go
higher,” s aid John Kilduff of Again
Capital. “Many of the companies
are unprofitable when oil pricesaverage had fallen sharply earlier
Friday before rallying, and ended
down 257 points at the close. For
the week, the Dow ended slightly
higher than where it began.
“The employment report was
nearly perfect in February before
the growing economic storm
posed by the spreading coronavi-
rus around the country that
threatens many industries where
the public gathers from movies, t o
travel, to the airline industry, e ven
shops and malls,” Chris Rupkey,
chief financial economist of
MUFG Union Bank, wrote in a
commentary Friday.
President Trump heralded the
“tremendous” jobs report while
he signed Congress’s $8.3 billion
emergency coronavirus spending
package. He said the report was
evidence of the country’s contin-
ued economic resilience in the
face of the outbreak. But as he
spoke, White House officials were
considering targeted steps t o help
the airline, travel and cruise in-
dustries stabilize as many Ameri-
cans cancel trips because of con-
cerns about the virus’s reach.
Over the past few weeks, ex-
perts have gone from sanguine to
increasingly alarmed about the
virus’s threat to global growth, as
the outbreak has spread to nearly
90 countries and sickened more
than 100,000 people. Global mar-
kets have shown volatility and
fallen sharply as investors have
monitored the coronavirus’s
dampening effect on manufactur-BY TAYLOR TELFORD,
RACHEL SIEGEL
AND THOMAS HEATHThe U.S. economy added
273,000 jobs in February, s howing
impressive strength before the
coronavirus outbreak began
weighing heavily.
The report, published by the
Bureau of Labor Statistics, offers a
snapshot of an economy that was
relatively s trong i n the days before
the coronavirus’s spread into the
United S tates.
The jobs data was collected
largely before U.S. financial mar-
kets began a dramatic slide, oil
prices fell sharply, the Federal Re-
serve announced an emergency
interest rate cut and Congress
rushed to pass an $8.3 billion
spending bill to boost the govern-
ment’s health readiness.
The unemployment rate in Feb-
ruary fell slightly to 3.5 percent,
near a 50-year low. The outstand-
ing growth was driven by gains in
health care, restaurant, govern-
ment a nd construction h iring. But
many investors and business ex-
ecutives are more concerned
about the future.
Wall Street ended its tempestu-
ous, week-long coronavirus ride
Friday with all three major stock
indexes in the red for this year,
and investors continued to flee to
the safety of government bonds
because they are unsure what the
virus’s impact on the economy w ill
be. Still, the Dow Jones industrial
Labor market strong in February, but coronavirus clouds future outlook
STUART ISETT FOR THE WASHINGTON POST
Lunchtime crowds vanished near Amazon’s headquarters in Seattle
this week as the company urged employees to work from home.