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Pentagon: JEDI Cloud Contract Award May Be Delayed As Amazon Conflict Probe Continues

It’s the first time the agency has acknowledged the path to digital transformation is paved with speed bumps.

The Department of Defense told CRN that Oracle’s lawsuit challenging the federal government’s bidding process in a $10 billion cloud computing contract and an internal investigation probing potential conflicts of interest may delay the deadline for the awarding of the contract.

A Pentagon spokesperson said as recently as last December that the projected award date would be April of this year, but Pentagon spokesperson Elissa Smith now says that an investigation of potential conflicts of interest, and “protest litigation activities generally, are expected to impact the award date.” Smith said she did not have “additional information about the timeline or anticipated award date at this time.”

Although it was generally assumed the litigation and new information about potential conflicts would impact the timeline of Pentagon’s awarding of the cloud contract, it’s the first time the agency has acknowledged the path to digital transformation is paved with speed bumps.

[RELATED: Federal Judge Eyes New Conflict Claims In Oracle’s JEDI Cloud Contract Suit]

The news comes after a federal judge last week issued a stay in the Oracle case in which the tech giant is contesting the contract’s bidding process.

The Redwood City, Calif. tech giant had previously argued in its lawsuit that the Joint Enterprise Defense Infrastructure (JEDI) contract procurement process was rife with conflicts of interest between the Pentagon and Amazon Web Services, which is also competing for the valuable contract.

U.S. Court of Federal Claims Senior Judge Eric Bruggink wrote at the time that the court granted the stay in the case while the Department of Defense reconsiders whether “possible personal conflicts of interest impacted the integrity of the JEDI Cloud procurement. The government is directed to file a status report within five days of a final decision by DoD.”

DoD spokesperson Elissa Smith said last week that the agency “can confirm that new information not previously provided to DOD has emerged related to potential conflicts of interest. As a result of this new information, DOD is continuing to investigate these potential conflicts.” Smith did not say whether those potential conflicts relate to AWS or any other company.

Oracle's legal challenges to the Pentagon's JEDI cloud initiative have all so far failed, but the software giant is persisting in its attempts to block the military from awarding the potentially $10 billion cloud contract to a single provider.

Oracle filed a lawsuit last December against the federal government related to the awarding of the contract. The complaint was filed in the U.S. Court of Federal Claims, a court that typically hears monetary claims against the U.S. government.

Oracle, in addition to arguing against awarding a cloud contract to a single vendor, had previously claimed the government hasn't adequately investigated the role two "heavily-conflicted" former officials played in establishing the JEDI contract's onerous requirements, according to Oracle.

Deap Ubhi served as JEDI project manager at the DoD, but previously worked for Amazon Web Services and has since gone back to Amazon. CRN has previously reached out to Ubhi for comment. Anthony DeMartino, chief of staff for the Deputy Secretary of Defense, was a consultant for AWS before being tapped by the DoD.

“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 alleges.

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