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FBI Is Investigating JEDI Cloud Procurement Process: Report

After complaints from Oracle about conflicts of interest that favor AWS, one person involved in the military's looming $10 billion cloud transformation initiative has been interviewed by both the DoD's IG and the FBI's Public Corruption Squad, according to Federal News Network

The FBI has become involved in a probe of the process by which the military crafted criteria for its potentially $10 billion JEDI cloud computing contract, according to a new report.

The Federal News Network, a news outlet that covers the federal government, reported Monday that at least one person involved in the matter met with the Department of Defense's inspector general as well as the FBI's Public Corruption Squad to answer questions about Joint Enterprise Defense Infrastructure procurement.

The FBI's involvement suggests investigators are looking into potential criminal conduct around the contract that has generated a firestorm of controversy throughout the tech industry over the last year, including protests to the Government Accountability Office by Oracle and IBM, and, more recently, a lawsuit brought by Oracle.

Oracle and other name-brand technology vendors have repeatedly claimed the winner-take-all nature of the award and criteria by which a vendor will be selected violate industry best practices and were geared to deliver the entirety of the contract to Amazon Web Services.

[Related: Oracle Again Looks To Court To Shoot Down JEDI Cloud's Single Provider Criteria]

The Federal News Network source said the DoD IG and FBI also asked about relationships of contractors and government personnel working on JEDI and other contracts.

Oracle declined to comment on the latest report of FBI involvement. CRN has reached out to the FBI for comment.

Weeks ago, a federal judge issued a stay in Oracle's lawsuit contesting the JEDI bidding process, citing potentially new information emerging around possible conflicts of interest. Oracle had previously argued JEDI was rife with conflicts of interest between the Pentagon and AWS.

In legal filings, Oracle questioned the "propriety" of the procurement process after obtaining communications in which an official called colleagues voicing support for AWS rivals "dum dums."

The Redwood City, Calif., tech giant alleges that two people who helped lead the JEDI initiative– Deap Ubhi, who served as JEDI project manager at the DoD, and Anthony DeMartino, chief of staff for the Deputy Secretary of Defense – were conflicted because of their relationship with Amazon Web Services.

Ubhi, the lawsuit states, worked at AWS until joining the Defense Digital Service in the summer of 2016. He returned to AWS as general manager in November 2017.

"While engaged in the JEDI Cloud procurement, Ubhi held discussions with AWS regarding AWS buying one of Ubhi’s businesses, and had employment discussions with AWS," the complaint alleged.

Ubhi was involved in "highly technical" discussions with JEDI Cloud competitors, including Microsoft and Google, and "drove the single award decision." At the same time, Oracle claims, Ubhi’s messages on Slack shared with other members of the DDS team were "riddled with inappropriate comments about competitors, DoD personnel and others, raising significant questions about the propriety of this procurement."

In a series of Slack messages on Oct. 5, 2017, Ubhi allegedly insulted one of the Under Secretary’s deputies, Jane Rathbun, after she referred favorably to Microsoft: "Role playing: I’m Jane R./holy sh[*]t, SaaS is the holy grail, they [Microsoft] do it all for us!"

"She compared Office 365 with AWS," he wrote. "We’ve got some real dum dums in here, their names usually begin with J…"

Additionally, Oracle said Ubhi allegedly "attacked anyone who took multi-cloud positions or advocated non-AWS solutions."

Oracle also said a DoD assessment of Ubhi’s alleged conflicts "span less than one page," did not involve an interview with Ubhi and "failed to identify when or how the Ubhi-AWS business negotiations began," among other things.

But the DoD countered in a memo that made clear Ubhi recused himself from JEDI in October 2017, when discussions with AWS started.

"His access to any JEDI Cloud materials was immediately revoked," the memo reads.

DeMartino, a former AWS consultant, also advocated "procurement positions, including single source" and participated in JEDI Cloud meetings — in violation of conflict restrictions of the U.S. code, the code of federal regulations and his executive order ethics pledge, Oracle argued in its filings to the court.

The DoD Standard Of Conduct Office had warned DeMartino not to get involved in any matter involving AWS without prior approval from the office, the complaint stated. But he allegedly ignored the warning and participated in JEDI Cloud discussions for over six months. When he did seek approval, Oracle alleged, the office "directed DeMartino to separate from the JEDI Cloud procurement."

"The procurement damage from DeMartino’s months of involvement had already occurred," Oracle argued, asking for a full investigation of DeMartino’s involvement before the DoD awards the contract to any company.

Oracle also argued that three of the JEDI RFP’s seven "Gate Criteria" that each bidder must pass in order to compete for the contract exceed the DoD’s needs and violate the Competition In Contracting Act (CICA), to the "significant competitive disadvantage of Oracle."

Oracle’s lawsuit was filed in December, a month after the Government Accountability Office, the federal government watchdog that oversees procurement, tossed out Oracle's protest over the contract.

Amazon, which voluntarily joined the lawsuit as a co-defendant of the federal government, said Oracle grossly mischaracterized the Pentagon's work in forming its solicitation for RFPs.

Choosing a single vendor, as opposed to taking a multi-cloud approach, was a decision approved at high levels of the Pentagon to "Meet the Needs of the Warfighter." That decision, specifically, was made by the Under Secretary of Defense—and no allegations of bias have been made against her, Amazon argued.

As to disputed "gate criteria", the Deputy Director of the Defense Digital Services has already justified all of them. He too has not been accused of any bias.

The roles of Ubhi and DeMartino, as well, are "wildly overstated," Amazon contended to the court.

Oracle "stitched together a self-serving narrative from snippets of e-mails and informal Slack messages to create the impression that the purported bias of Mr. Ubhi and Mr. DeMartino impacted the single-award determination and/or resulted in adoption of the purportedly unduly restrictive Gate Criteria," the opposition motion reads.

AWS, the industry's dominant cloud provider, was awarded a $600 million contract to build the CIA’s private cloud in 2013 and it already has a government-focused GovCloud service. Last year, AWS launched a "secret" cloud service for the CIA and other intelligence services. Amazon also recently announced a significant expansion in Crystal City, Va.—about a mile from the Pentagon.

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