Pentagon's JEDI Contract Clears Legal Hurdle But Others Remain

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Oracle’s lawsuit against the Pentagon over its Joint Enterprise Defense Infrastructure contract is over, clearing the way for an award.

A lengthy and complex ruling released Friday by U.S. Court of Federal Claims Senior Judge Eric Bruggink clears the legal roadblocks for the Pentagon to award its Joint Enterprise Defense Infrastructure contract in late August.

The full filing comes two weeks after the judge announced his decision in favor of the defendant Pentagon over bidding tech firm and plaintiff Oracle because the tech firm could not meet certain gate criteria when bids were due in late 2018. It indicates the judge actually sided with both parties in various claims.

In one instance, Bruggink found the Defense Department violated a 2008 law requiring indefinite-delivery, indefinite-quantity contracts be awarded to multiple bidders if the ceiling value exceeded $112 million. JEDI, with a potential total ceiling value of $10 billion over 10 years if all options are exercised, met that criterion, and the judge found the exemption the Pentagon used was improper.

However, in another instance, the judge sided with the Pentagon’s use another Federal Acquisition Regulation subsection that mandates the government use single-award contracts if certain criteria are met. The judge agreed with the Pentagon’s justification of a single-award contract would produce “more favorable terms and conditions, including pricing,” and simpler contract administration.

The judge acknowledged the seemingly contradictory nature of the rulings, calling them “in tension” with one another and offered an explanation.

“This peculiar state of affairs is an artifact of a code section which is a mixture, rather than an alloy, of various pieces of legislation. Not surprisingly, the parties have different views about the implications of this possible result,” the judge said.

In a statement to reporters, the Pentagon said it was “pleased” with the court’s decision, though it disagreed with the court’s analysis that it violated the law regarding its fixed price justification. The Pentagon also used the ruling to trumpet how JEDI is expected to impact warfighters at home and aboard. 

JEDI will essentially provide a common cloud infrastructure where military data around the world is hosted, analyzed and available to warfighters in the least connected regions in the world. Oracle, IBM, Microsoft and Amazon Web Services bid on the contract, but Oracle’s and IBM’s bids were tossed out early because they did not meet the contract’s minimum gate requirements. Neither company prevailed in their bid protests.

“Read in its entirety, the ruling highlights that DOD’s unique needs for the warfighter have consistently driven decisions related to JEDI. Empowering the warfighter is the first principle of all DOD acquisition and has been the guiding light for the dedicated team of public servants working under terrific scrutiny to bring the tools of the digital age to our nation’s men and women in uniform,” said Pentagon spokeswoman Elissa Smith.

The judge also sided with the Pentagon regarding Oracle’s allegations of conflicts of interest between AWS and Pentagon officials. Oracle’s lawsuit alleged several Defense personnel working on the JEDI procurement were conflicted over their ties to AWS and helped bias the requirements.

“We think that the conclusion the [contracting officer] in effect asks us to draw, that these individuals were bit players in the JEDI Cloud project, is correct,” the ruling states. “While they should not have had the opportunity to work on the JEDI Cloud procurement at all, or at least for certain periods of time, nevertheless, their involvement does not taint the work of many other persons who had the real control of the direction of the JEDI Cloud project.”

Oracle, which filed its case in December, has not said whether it will appeal the ruling.

But the Controversy May Not Be Over

On Saturday, CNN reported President Trump was shown a one-page document last week claiming Amazon and the Pentagon orchestrated a conspiracy to create the JEDI contract. The document includes a flow chart titled “A Conspiracy to Create a Ten Year DoD Cloud Monopoly,” and allegedly contains a rehash of allegations contained in a dossier circulated last year, originally reported by Nextgov and sister publication Defense One.

According to CNN, the one-page document was created by Oracle’s top Washington lobbyist, Ken Glueck, though it is unclear how it reached Trump’s desk. The one-pager appears to be the latest effort to influence the president and other members of Congress in an effort to squash JEDI.  

In mid-July, Trump told reporters he had received “tremendous complaints” from “some of the greatest companies in the world,” before naming Oracle, IBM and Microsoft. In a press conference with the prime minister of the Netherlands, Trump said he’d take a look at the contract after having heard it “wasn’t competitively bid.”

Meanwhile, high profile lawmakers including Sen. Marco Rubio, R-Fla., Rep. Mark Meadows, R-N.C. and Sen. Ron Johnson, R-Wisc., have either called for a delay or cancellation of JEDI. On July 19, an opposing group of four Republicans lawmakers from the House Armed Services Committee wrote Trump, asking him to stay out of the contract.

Pentagon officials continue to stress JEDI’s importance, with several officials suggesting delays to JEDI could harm national security.