Oracle’s Lawsuit Challenging JEDI Cloud Gets The Go-Ahead After Stay

April 16, 2019, 03:57 PM EDT

Now that the Pentagon has indicated either AWS or Microsoft will win the lucrative deal, it's unclear to what ends Oracle will further pursue its lawsuit against the federal government

Now that the Pentagon has concluded potential conflicts of interest didn't corrupt the JEDI (Joint Enterprise Defense Infrastructure) cloud contracting process, a federal judge ruled Tuesday that Oracle's lawsuit challenging that process can proceed.

Judge Eric Bruggink on Tuesday lifted a stay in Oracle's suit against the federal government and Amazon Web Services and scheduled upcoming filing deadlines in the case, including Oracle's submission of a supplemental complaint before April 26.

The Pentagon last month requested Bruggink pause the case so it could further investigate some of the issues raised by Oracle, including allegations of conflicts involving two military officials who had business ties to Amazon as the Department of Defense was setting criteria and requesting bids for a potentially $10 billion contract to modernize its IT infrastructure in the cloud.

Judge Bruggink said he issued the stay because of potentially new information emerging around those possible conflicts.

When the Pentagon concluded the integrity of its process in selecting an enterprise cloud provider was sound, it simultaneously said it would award the winner-take-all JEDI contract to either Amazon or Microsoft.

Given that Oracle has now been definitively knocked off the short-list of vendors still vying for the award, it's not clear what the budding cloud provider will choose to argue in its case against the government and AWS, or if it will continue to pursue the matter in court.

An Oracle spokesperson declined a CRN request for comment.

AWS and Microsoft, the first and second largest enterprise cloud providers, respectively, were the only two bidders in the $10 billion sweepstakes that met the military's "competitive range determination" to proceed in the process, said Elissa Smith, a spokeswoman for the Department of Defense.

In scheduling oral arguments for the week of July 8, the judge noted the Pentagon will not award the contract before July 19.

"Source selections of this magnitude are complicated and with the investigation, and protest litigation activities generally, award dates are often impacted. The earliest the contract is likely to be awarded is mid-July," Smith told CRN, adding the government hasn't yet set a specific date.

A Defense Department Inspector General's investigation is still probing "potential ethical violations" surrounding two former Amazon employees who were involved in the military's vendor selection process, Smith said.

In March, the FBI's Public Corruption Squad became involved in that probe.

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 AWS.

In its 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."

Oracle has honed in on 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.

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.

DeMartino, chief of staff for the Deputy Secretary of Defense, was a consultant for AWS before being tapped by the DoD.

The JEDI initiative is only one component of the military's ambitious cloud modernization strategy, but it has created a firestorm of controversy in Silicon Valley, including criticism from an industry trade group, the protests to the GAO, and Oracle's lawsuit.

A Cloud Strategy document presented to Congress makes a distinction between the DoD's need for a "General Purpose" cloud, and ones that will be "Fit For Purpose"

The General Purpose cloud that will go to AWS or Microsoft will be the cloud of first-choice, with a "primary implementation bias" for all defense agencies.

"Only when mission needs cannot be supported by General Purpose will Fit For Purpose alternatives be explored," the document reads.

"Mission owners" that want to stray from the cloud provider selected through the JEDI initiative will have to submit an "Exception Brief" to the DoD's CIO explaining why they believe the capability they require cannot be met by the General Purpose cloud.

David Harris contributed to this report.