Two weeks after a federal court cleared the Pentagon against a legal challenge to its Joint Enterprise Defense Infrastructure cloud program, the full ruling unsealed on Friday has detailed the project’s “flawed” contract strategy and potential ethics violations.
A federal claims court judge acknowledged instances of alleged conflicts of interest with Amazon Web Services [AMZN] and sided with the plaintiff, technology firm Oracle [ORCL], over its objection to the Pentagon’s justification for a single-award approach, but ultimately deemed the issues did not prevent the program from moving forward.
Judge Eric Bruggink noted since Oracle conceded it could not meet JEDI’s gate criteria the court was unable to demonstrate prejudice in the JEDI program “even if the procurement was otherwise flawed.”
Bruggink denied Oracle’s challenge to JEDI earlier this month in a brief opinion, clearing the way for a late August contract award for the potential $10 billion JEDI program to either AWS or Microsoft [MSFT], the two vendors to meet the gate criteria (Defense Daily, July 12).
In the full version of the ruling, the court found the Pentagon did not adhere to a 2008 law requiring IDIQ contracts over $112 million to be awarded to multiple vendors.
While the provision does allow for exceptions, Bruggink found officials’ justification that future orders would be placed with firm, fixed prices was not applicable.
Bruggink agreed with Oracle’s claim that the provision doesn’t account for requirements that the eventual vendor build in future commercial cloud capabilities as new technologies are developed.
Elissa Smith, a DoD spokeswoman, said in a statement the department “disagrees with the court’s analysis on the department’s use of the fixed price justification for the single award determination,” but was pleased to see the justification for the program was upheld.
“As DoD has asserted all along, and as confirmed by the Court, DoD reasonably evaluated and equally treated all offerors. The court’s decision unequivocally concludes that JEDI is a full and open competition and, despite uninformed speculation to the contrary, its integrity remains intact,” Smith said.
The ruling details industry’s pushback on the single award approach following the release of the RFI, which included eventual finalist Microsoft noting that a multi-cloud approach would offer greater competition and flexibility.
“Many responders questioned whether a single award would offer the best cost model, whether one vendor could possibly be the leader in all areas, and whether a single vendor would devalue investment made by existing vendors,” Bruggink wrote.
The court also acknowledged allegations against several individuals associated with the JEDI program and potential ties to AWS, while reaching a similar conclusion to previous investigations that the relationships did not affect the procurement effort.
Bruggink noted that a former deputy chief of staff for the defense secretary was an AWS consultant before joining the Pentagon and a Defense Digital Service official previously worked with the technology company, while finding their work had no impact on the integrity of the program.
“While they should not have had the opportunity to work on the JEDI Cloud procurement at all, or at least for certain periods of time, nevertheless, their involvement does not taint the work of many other persons who had the real control of the direction of the JEDI Cloud project,” Bruggink wrote.
Smith noted that the court’s decision aligned with previous investigations and the JEDI contracting officer’s own findings that potential ethical violations didn’t prevent the program from moving forward.
“The court concurs with DoD’s extensive review – that the individuals at issue were ‘bit players,’ in the Court’s own words, and the alleged conflicts had no impact on the integrity of the procurement,” Smith said.
Newly appointed Defense Secretary Mark Esper told reporters he would take a “hard look” into JEDI following the president’s recent remarks that he had received complaints from several companies about the program (Defense Daily, July 26).