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Oracle's JEDI Cloud Contract Protest Shot Down By GAO

The Government Accountability Office says the Pentagon is within its right to seek a single cloud vendor for its $10 billion cloud transformation initiative, and military leaders have not violated any procurement laws.

The federal government watchdog that oversees procurement on Wednesday tossed out Oracle's protest over the military's looming JEDI cloud-computing contract.

The General Accountability Office denied Oracle's three claims: that a single award violates a statutory preference for multiple vendors; that the terms of the award restrict competition by exceeding the actual needs of the military; that the Pentagon didn’t consider potential conflicts of interest.

The Pentagon, in fact, complied with all federal procurement laws and regulations, according to a statement released by Ralph O. White, the GAO's managing associate general counsel for procurement law.

It's entirely legal for the Department of Defense to pursue a single cloud vendor as that decision resulted from concerns over national security, White said.

[Related: Microsoft President On U.S. Military Contracts: ‘Microsoft Will Be Engaged’]

The GAO has yet to publicly release the full decision because of concerns over sensitive information it may contain.

The GAO also hasn't ruled on a similar protest from IBM, which joined Oracle in formally challenging the military's RFP just days before final bids were due Oct. 12 for the cloud contract that could total $10 billion over ten years.

IBM argued the Pentagon's decision to go with a single cloud provider creates a military liability. IBM declined to comment on this story.

"Oracle believes that both the warfighter and the taxpayer benefit most from a rigorous and truly competitive process. We remain undeterred in our commitment to bring tremendous value and flexibility to our customers, including the Department of Defense,” said Deborah Hellinger, Oracle’s head of global corporate communications, in a statement.

“Oracle’s JEDI bid represents a forward-thinking, next generation cloud focused on security, performance, and autonomy and a move away from the legacy cloud infrastructure that seems to be favored in the RFP,” said Hellinger. “We are convinced that if given the opportunity to compete, DoD would choose Oracle Cloud Infrastructure for a very substantial portion of its workloads because OCI delivers the best, most performant and most secure product available at the best price.”

While other technology powerhouses also complained about JEDI's bidding process through an industry trade group, none filed formal protests with the GAO.

In April, Microsoft, IBM, Dell and HPE all joined Oracle in urging the Pentagon to abandon a winner-take-all approach to the multi-billion contract. Eventually a coalition of nine companies gelled in opposition to what they believe is Amazon's preordained selection, including SAP America, General Dynamics Corp.’s CSRA unit, Red Hat and VMware.

The Information Technology Industry (ITI) Council's IT Alliance for Public Sector, a consortium that's comprised of all the cloud providers involved in the dispute, has argued a multi-cloud approach would adhere to best practices for ensuring price competitiveness and avoiding vendor lock-in.

The Pentagon has pushed back against complaints and resisted calls to change the nature of the award.

Pentagon brass have said any threat of vendor lock-in can be mitigated by demanding submitted RFPs that include plans that enable the military within two years to switch to another provider. Leveraging application containers is one way, the military believes, it can migrate if it decides not to commit to three- and five-year extensions stipulated in the contract.

Military leaders have argued that deploying workloads across multiple providers will increase security management challenges and make data less accessible to U.S. forces deployed in remote settings, such as naval vessels.

Oracle has argued the RFP appears crafted to give Amazon Web Services a leg up in the bidding process.

In October, that position gained support from two U.S. congressmen, who accused military leaders of violating federal law and industry best practices to deliver the entirety of the massive contract to a single provider.

The Republican politicians -- Steve Womack from Arkansas and Tom Cole from Oklahoma -- wrote a letter to Glenn Fine, principal deputy inspector general for the U.S. Department of Defense, that severely criticized the RFP process that ended in bids submitted a week earlier.

While Womack and Cole didn't name the favored contractor, based on the requirements that provoked their concern—specifically a provider that meets Defense Information Systems Agency Impact Level 6—it was clear referred to Amazon Web Services.

The congressmen also wrote it has come to their attention, through media reports, that people in high-ranking positions within the military are going against the department's ethics guidelines because they "have significant connections" to that contractor.

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