Judge rules against Oracle in $10 billion military cloud computing dispute
A federal judge has ruled against Oracle’s motion to block the Pentagon’s 10-year, $10 billion cloud computing contract, siding with the Defense Department and Amazon Web Services in a contentious eight-month-long legal battle.
The Friday decision in the Court of Federal Claims should clear the way for the Pentagon to award the long-awaited contract to either Amazon or Microsoft, the two companies it says are eligible. It is the third time a bid protest has failed to quash the award; earlier attempts by Oracle and IBM were respectively denied and dismissed. (Amazon founder Jeff Bezos owns The Washington Post.)
Defense spokeswoman Elissa Smith said the department is pleased with the decision.
“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,” Smith wrote in an emailed 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.”
The contract, called the Joint Enterprise Defense Infrastructure, or “JEDI” for short, would create a departmentwide cloud computing infrastructure for military agencies. It is meant to serve as a springboard for artificial intelligence applications and make it easier for military agencies to share classified information with deployed soldiers, sailors and Marines.
But the effort has been marred by allegations that it is biased in favor of Amazon Web Services, which has years of experience working with classified data under an earlier partnership with the CIA.
In Oracle’s most recent protest, it alleged conflicts of interest on the part of Defense Department officials who were later hired by Amazon, arguing that a series of revolving-door hires tainted the procurement in the company’s favor. It sought a permanent injunction that would disallow the Defense Department from moving forward with the contract.
But in a decision published Friday morning, Judge Eric G. Bruggink said the court had concluded that “an organizational conflict of interest [on the part of Amazon] does not exist,” refuting Oracle’s primary claim. Bruggink also concluded that the official overseeing the procurement was not “arbitrary and capricious” in her review of the facts, another Oracle claim.
An Oracle spokeswoman declined to comment on whether the company would appeal the decision, instead emailing a statement touting the “performance and security capabilities” of Oracle’s cloud products.
“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,” the Oracle spokeswoman said.
In an email to reporters, an Amazon Web Services spokesman said the company “stands ready to support and serve what’s most important — the DoD’s mission of protecting the security of our country.”
The AWS spokesman criticized other companies’ attempts to interfere with the Defense Department’s plans.
“Despite the many attempts by others to distract and delay, today’s ruling re-affirms what we’ve said all along, that Oracle’s claims were meritless and a desperate attempt to distort the facts,” the AWS spokesman wrote.
Although Oracle’s protest appears to have failed to block the contract award entirely, it did manage to delay the award by a few months while the Pentagon investigated Oracle’s claims. The Defense Department now expects to award the contract in August, which would reflect a four-month delay from its initial plan.