Oracle loses JEDI appeal

A panel of federal appellate judges affirmed a lower court decision denying a protest by Oracle in the Defense Department's $10 billion cloud procurement dubbed JEDI.

Oracle was one of the original bidders in the Joint Enterprise Defense Infrastructure procurement, but did not advance to a competitive phase of the bidding because contracting officers determined that the company did not meet certain base requirements with regard to cloud capacity and security.

Oracle filed a pre-award protest, alleging that the Pentagon cooked up the requirements in the procurement with Amazon Web Services in mind, that there were three individuals who worked on or close to the procurement who had organizational conflicts of interest, and that the department's top acquisition official violated law and agency policy in fashioning a single-source contract instead of creating a vehicle that would allow for multiple vendors competing at the task order level.

In July of last year, the Court of Federal Claims agreed with the government and ruled that Oracle hadn't made enough of a case with any of its arguments to restart the procurement. Eventually the JEDI contract went to Microsoft and that award is the subject of another lawsuit – this one brought by Amazon Web Services. The AWS lawsuit is on pause while the award decision is being reconsidered -- the Pentagon retooled some of the criteria it used in awarding the contract to Microsoft and a revised decision is expected later this month.

In the Oracle case, the U.S. Court of Appeals for the Federal Circuit agreed with the lower court judge that there were some missteps on the part of the government and evidence of organizational conflicts of interest, but that these weren't sufficient to take JEDI back to square one.

"While we share the views of the contracting officer and the Claims Court that some of the conduct at issue is troubling, at the end of the day we agree with the Claims Court that the conflict of interest problems of those three individuals had no effect on the JEDI Cloud solicitation," Judge William C. Bryson wrote. His decision also states that there were legal issues with DOD's plan to create a single-source procurement, the "error was harmless" because in other respects Oracle would not have been able to advance in the bidding on JEDI because of its inability to meet certain requirements "which the Department would have imposed regardless of whether the procurement was conducted on a single-source or multi-source basis."

Oracle had argued more recently that its current level of cloud security accreditation would have made it eligible to advance in the JEDI procurement, but the appeals court stated that any events subsequent to Oracle's initial bid are irrelevant.

An Oracle spokesperson declined to comment on the ruling.