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Oracle pushes ahead with legal challenge over Pentagon’s JEDI cloud contract

The US Defense Department has sent shockwaves through the cloud computing sector with a decision in October that Microsoft Azure had won the multi-billion single award Joint Enterprise Defense Infrastructure (JEDI). 

Cloud behemoth Amazon Web Services, long considered to be the one to beat in the closely watched and often controversial process, expressed surprise at the outcome. Some insiders have suggested that challenges during the bidding gave Microsoft time to pull together a more cohesive and competitive cloud play. But others, including Oracle Corp, a one-time competitor for the deal, are calling out the process as inherently unfair. 

Oracle Corp is continuing its protest in the courts with a new filing in the US Court of Appeals. After the Pentagon rejected Oracle’s bid saying the company had not met certain gating criteria, Oracle filed suit in US Federal Claims Court contesting the bidding process based on conflicts of interest that Department of Defense employees that allegedly had with Amazon Web Services. At least two former Pentagon procurement staffers that had some history with the JEDI bid are now employed by AWS.

After Judge Erik Buggink sided with the findings of an internal Pentagon investigation into the bidding process and dismissed the complaint, Oracle Corp appealed the decision saying the lower court applied the wrong precedent to make its decision that the software giant’s bid had not been impacted by the single-source nature of the award. Oracle Corp filed a brief in early November after Microsoft won the JEDI contract protesting, among other issues, the arbitrary timeframes competitors were required to meet gating criteria.

Oracle and others have taken issue with the single award nature of the contract, something that runs counter to the trend in the industry to rely on multiple cloud providers for redundancy and price control. President Donald Trump added fuel to the fire by weighing in on the procurement process. Trump suggested in July that he would investigate the process, telling reporters that he was “getting tremendous complaints about the contract with the Pentagon and Amazon”.

The JEDI procurement process has been turbulent throughout. Beyond complaints about the deck being stacked in favour of AWS, some employees of the competitor expressed consternation on the ideological basis of supporting warfighting efforts through their technological development and delivery efforts. At least reportedly in part because of these internal protests, Google withdrew its bid. Some Microsoft staffers have also decried the award though Microsoft says it plans to move forward. As of 11 November 2019 – Veterans Day in the US – Amazon Web Services was still deliberating over what, if any, protest action to take.

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