Amazon or Microsoft set to pick up $10 billion DoD cloud deal after Oracle complaints rejected in court

Profile picture for user slauchlan By Stuart Lauchlan July 15, 2019
US Judge knocks back Oracle claims, clearing the way for AWS or Microsoft to pick up contract.

Department of Defense

Amazon or Microsoft are set to pick up the US Department of Defense’s JEDI cloud project next month after Oracle’s claim that the procurement process for the $10 billion had been unfair was rejected in the Court of Federal Claims.

Oracle had alleged that former AWS employees in DoD steered the JEDI  (Joint Enterprise Defense Infrastructure ) procurement process in AWS’ favor. But in a pre-judgement filing Judge Eric Briddink said Oracle couldn’t meet the DoD’s contractual requirements, noting that the firm didn’t have enough data centers in enough locations  far enough apart to maintain service in the wake of a massive disaster.

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,

As things stand, Amazon is the only cloud provider that can currently meet the DoD’s security requirements for the contract. Microsoft is bidding with the promise that it will meet the security requirements if they win the award.

Oracle had also alleged that there was insufficient exploration of organizational conflicts of interest by the DoD’s contracting officer. Judge Briddink dismissed this:

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.

Oracle had also questioned the decision to choose a single provider for the contract which it argued violated federal procurement law to ensure competition. The DoD in turn argued that security risks would be lowered by having a sole provider.  The point was also made that JEDI will not replace all of the DoD’s existing 500 or cloud contracts, leaving room for other vendors to pick up business.

For its part, the DoD welcomed the conclusions reached:

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. 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.

It’s unclear whether Oracle will appeal the decision. But it appears to keen not to put future deals at risk. In a statement the firm says:

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.”

Microsoft is keeping schtum, but Amazon Web Services, which entered the lawsuit in support of the DoD, said in a statement:

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.

My take

As noted, Oracle may still mount an appeal so it’s not appropriate to comment on the specifics of the ruling at this time. On a general note, I do find the idea of a ten year gig of this size being awarded to a single provider, whoever it ends up being, something of a throwback at a time when private sector organisations are comfortably multi-cloud in nature. It’s a decision that smacks of ‘Big IT’ of the worst kind.