A federal judge on Friday ruled in favor of the Pentagon in Oracle’s [ORCL] legal challenge to the potential $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud computing program, clearing the way for a late August contract award to either Amazon [AMZN] Web Services or Microsoft [MSFT].
The Court of Federal Claims denied Oracle’s argument of conflicts of interest between AWS and Pentagon officials on JEDI and upheld that the program’s stringent criteria did not violate federal procurement laws.
“We are pleased with the determination made by the U.S. Court of Federal Claims. This reaffirms the DoD’s position: 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,” Elissa Smith, a DoD spokeswoman, said in a statement. “DoD has an urgent need to get these critical capabilities in place to support the warfighter and we have multiple military services and combatant commands waiting on the availability of JEDI. Our focus continues to be on finalizing the award decision.”
Judge Eric Bruggink wrote in his brief two-page opinion that the gate criteria for JEDI, which effectively eliminated Oracle and IBM [IBM] from competition, was enforceable and noted that Oracle conceded “it could not meet that criteria at the time of proposal submission.”
“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,” Bruggink wrote.
An internal DoD investigation earlier this year also concluded there no conflicts of interest with JEDI, while Pentagon officials noted that potential ethical violations had been referred to the department’s inspector general (Defense Daily, April 11).
Pentagon CIO Dana Deasy told reporters last month that a JEDI contract, originally slated mid-July, is now likely to be awarded in late August (Defense Daily, June 25).
JEDI has faced several delays due to pre-award protests and program reviews, as well as pushback from both Congress and industry over the single-award contract structure and stringent requirements potentially skewing the competition toward only the largest cloud vendors, including AWS.
“AWS, along with our partner community, stands ready to support and serve what’s most important – the DoD’s mission of protecting the security of our country. The DoD deserves access to the best technology in the world and we are unwavering in our support to their mission,” an AWS spokesperson said in a statement.
Sen. Marco Rubio (R-Fla.) sent a letter to National Security Adviser John Bolton on Thursday urging him to direct the Pentagon to delay awarding a contract for JEDI, which he said “suffers from a lack of competition.”
“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 wrote. “And in the end, DoD plans to award this massive contract to a single vendor, even though multiple vendors would ensure continuing price competition and access to the latest innovations.”
Rubio noted that over 200 companies expressed initial interest in JEDI with only four companies submitting bids for the actual JEDI work due to the stringent criteria.
This is Oracle’s second unsuccessful challenge to JEDI, with the GAO denying an earlier pre-award protest last November (Defense Daily, Nov. 14 2018).
“Oracle’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,” Deborah Hellinger, an Oracle spokeswoman, told Defense Daily.