Court Rules in Favor of Pentagon in JEDI Lawsuit

Posted on Sunday, 14th July 2019 @ 03:33 AM by Text Size A | A | A

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The Defense Department has triumphed in the eight-month-long U.S. Court of Federal Claims lawsuit filed by Oracle over its $10 billion Joint Enterprise Defense Infrastructure contract.

On Friday, Senior Judge Eric Bruggink ruled in favor the Defense Department—and Amazon Web Services, which joined the lawsuit as an intervener—stating that Oracle could not meet certain gate criteria when bids were due in late 2018.

The judge’s order also denied numerous allegations made by Oracle over the course of several months, including an alleged conflict of interest between AWS and Defense Department officials.

“Because the court finds that [gate criteria] is enforceable, and Oracle concedes that it could not meet that criteria at the time of proposal submission, we conclude that it cannot demonstrate prejudice as a result of other possible errors in the procurement process,” Bruggink’s order states. “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”.

The decision comes 18 months into the competition for JEDI among several large tech companies that included influence campaigns, a dossier full of allegations of impropriety on AWS’ behalf and three bid protests. 

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Amazon’s surging profits over the past few years have had little to do with the company’s core business of selling stuff – or allowing third parties to sell stuff – on its online marketplace. Instead, Jeff Bezos has built Amazon Web Services into a cloud computing behemoth, allowing tens of thousands of companies to outsource their back-end responsibilities. But after years of explosive growth, AWS’ revenue growth has started to slow in recent quarters. Which has made securing a multi-billion-dollar DoD cloud-computing contract all the more important to Bezos & Co. Unfortunately for them, the process for awarding the contract to build the Joint Enterprise Defense Infrastructure, or JEDI, has become embroiled in controversy, as rivals have sued alleging they were unfairly excluded from the bidding.

Microsoft officials announced Tuesday that the company had achieved the required security levels to host secret U.S. military and intelligence data on its could computer network, Azure, and claimed they were on track to to host “top secret” information soon. The developments put the computer giant in closer competition with cloud rival Amazon to handle the government’s most delicate and important information and perhaps to vie for the Pentagon’s coveted nearly $10 billion cloud contract known as JEDI.

The Defense Department amended its Joint Enterprise Defense Infrastructure contract Thursday, adding context to numerous industry questions on pricing, objectives, definitions and small business participation that were included in the final request for proposals thatwent out to bid in July. “We are excited at the continued level of interest in JEDI Cloud and appreciate industry’s participation in the solicitation process,” the Pentagon said in the update. “Since we feel that industry’s participation is vital, we are providing a second, limited question and answer opportunity.”

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