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Oracle Cloud JEDI Suit Dismissed, AWS, Microsoft Azure in Line for Contract

A federal court rejected Oracle’s claim that the $10 billion project's contract process favored larger cloud providers.

Jeffrey Burt

July 15, 2019

4 Min Read
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Amazon Web Services or Microsoft Azure will eventually be rewarded the federal government’s $10 billion JEDI cloud contract now that Oracle’s complaint regarding the wording of the single-provider contract, which the enterprise software maker claimed favored its larger cloud rivals, has been dismissed.

Both Oracle and IBM had complained that the application process for the massive 10-year Joint Enterprise Defense Infrastructure (JEDI) cloud project was written to favor AWS and Azure, and Oracle’s objections grew louder after Oracle and IBM in April were dropped as contenders, paving the way for AWS or Azure to take the contract.

Oracle officials in May added to their complaints, claiming that AWS offered jobs to two Department of Defense (DoD) employees who were involved in the JEDI program.

All that has now gone by the wayside. The presiding judge for the U.S. Court of Federal Claims late last week dismissed Oracle’s lawsuit against the DoD (AWS joined the lawsuit on the DoD’s side as an intervener), saying Oracle didn’t have standing to file the suit because it couldn’t meet certain criteria laid out by the DoD when the bids were due late last year. Senior Judge Eric Bruggink also dismissed Oracle’s claims of bias.

Bruggink wrote in the decision that the court agreed with the findings from two internal audits completed by the DoD that there was no conflict in the processing for applying for the contract.

“We conclude as well that the contracting officer’s findings that an organizational conflict of interest does not exist and that individual conflicts of interest did not impact the procurement, were not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” he wrote.

U.S. Sen. Marco Rubio, (R-Fl.), also entered in the debate, sending a letter to National Security Advisor John Bolton July 11, asking that the DoD delay awarding the JEDI contract to ensure a fair process. Rubio wrote that he was concerned the procurement process “suffers from a lack of competition. This, it is feared, will result in wasted taxpayer dollars and fail to provide our warfighters with the best technology solutions.”

Noting the price and length of the contract, the senator wrote that “this type of fiscal and time commitment should demand a procurement steeped in competition and conducted without bias toward any one vendor. However, DoD has used arbitrary criteria and standards for bidders.”

Rubio pointed to the fact that while 200 companies initially were interested, the DoD’s “restrictive criteria” resulted in only four companies bidding on the JEDI project, and additional “arbitrary criteria” led to IBM and Oracle being dropped.

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Endpoint Technologies Associates’ Roger Kay

Roger Kay, principal analyst with Endpoint Technologies Associates, told Channel Futures that it isn’t surprising the requirements of such a wide-ranging and complex project would match the capabilities of the largest cloud providers.

“This process looks pretty normal to me,” Kay said.

The DoD said in a statement that the court’s decision reaffirms its position that “the JEDI Cloud procurement process has been conducted as a fair, full and open competition, which the contracting officer and her team executed in compliance with the law.”

Oracle in its own statement said the company’s “cloud infrastructure 2.0 provides …

… significant performance and security capabilities over legacy cloud providers. We look forward to working with the Department of Defense, the Intelligence Community, and other public-sector agencies to deploy modern, secure hyperscale cloud solutions that meet their needs.”

Oracle got a late start in the cloud provider space and has been pushing for the past several years to catch up, including last year unveiling the latest version of its Oracle Cloud Infrastructure (OCI), which included the idea of regions and availability domains and improved performance, security, governance, value and controls. Last month the company partnered with Microsoft in a deal that allows customers of each to run their mission-critical workloads on the other’s cloud.

Endpoint Technologies’ Kay said despite such work, Oracle continues to lag the top cloud service providers, particularly AWS, Azure and Google Cloud Platform, which he said “are the only ones with any position in this market.”

With the court’s decision in, the DoD is now set up to award the JEDI contract to either AWS or Azure, a move that could happen as early as next month. JEDI is designed to become the DoD’s primary cloud environment, though it’s only part of a larger cloud modernization effort.

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