November 12, 2019
Oracle is back in court to register its protest against the method by which Department of Defense (DoD) is awarding its coveted, $10 billion JEDI contract to a single cloud provider.
The move comes even though DoD months ago eliminated Oracle (and IBM) from contention for the deal, with a federal judge reaffirming the decision.
Strangely, Amazon Web Services — the expected JEDI winner who in late October lost to Microsoft — has yet to challenge the DoD in court, as many observers have expected would happen. While the cloud giant did not respond to Channel Futures’ Oct. 28 inquiry regarding that possibility, an unnamed AWS source did tell Business Insider the previous Friday, when the contract was awarded, that the company was “evaluating options.”
But that may not be in Amazon’s best interest, according to FedScoop. AWS may not push back because it may decide not to take the chance of hurting its relationship with the DoD, which still could be a large AWS customer down the road.
DMMI’s Dave Mihelcic
“It might get AWS to profitability with the DoD more quickly to instead go ahead and focus on the next opportunity,” Dave Mihelcic, head of DMMI LLC, told FedScoop.
For Oracle, though, none of that actually matters. The Redwood City, California-based company continues to pursue its complaints that the JEDI (Joint Enterprise Defense Infrastructure) contract broke federal procurement laws by only naming and using one vendor, and that the contract unfairly favored AWS from the beginning. Oracle also said it now meets the JEDI’s minimum requirements, an assertion that may tie, in part, to the corporation’s recent announcement that it will hire 2,000 Oracle Cloud staff.
Oracle now has a 144-page opening brief filed with the Court of Appeals for the Federal Circuit, calling on the judge to order the DoD to restart the JEDI contract as a multiple-vendor bid. As news outlet GCN noted, even though Microsoft won the JEDI contract on Oct. 25, Oracle did not make any claims against its competitor with the appeals court or with the Government Accountability Office.
Instead, Oracle is focusing on the single-provider limit for JEDI and claiming conflicts of interest between DoD and AWS, specifically regarding financial compensation. Oracle says three DoD officials had conflicts of interest with AWS, which arose from what company alleges is “lax oversight” and “deception” on the part of one official.
Oracle further claims that Amazon offered jobs to two of the DoD officials involved in the JEDI contractor selection and another used to consult for AWS before working on the JEDI project. (CNBC says the DoD’s ethics office advised that official to recuse himself from matters involving AWS.)
A DoD spokesperson told CNBC in a statement that the agency…
…is aware of Oracle’s appeal and “will continue to review it along with the Department of Justice.”
The spokesperson said DoD has “reasonably evaluated and equally treated all offerors” throughout the JEDI contract award process.
Meantime, a procurement law expert with George Washington University (GWU) told The Washington Post (which Amazon founder Jeff Bezos owns) that DoD awarding JEDI to Microsoft probably bears little impact on Oracle’s litigation. In fact, the suit may effect some change.
GWU’s Steven Schooner
“I could easily see a panel of Federal Circuit judges being sufficiently troubled by the conflicts of interest … and concluding that DoD has to take a step back and more proactively address those concerns before it can proceed,” Steven Schooner told the newspaper.
JEDI is the DoD’s $10 billion, 10-year cloud initiative. DoD will use cloud, AI and other “digital modernization” technology to share sensitive data among different military branches.
“The National Defense Strategy dictates that we must improve the speed and effectiveness with which we develop and deploy modernized technical capabilities to our women and men in uniform,” Dana Deasy, chief information officer for the DoD, said in October when JEDI went to Microsoft. “This award is an important step in execution of the Digital Modernization Strategy.”
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