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A new stay on proceedings was ordered by U.S. Court of Federal Claims Senior Judge Eric Bruggink I in the legal battle between Oracle and the Pentagon over its $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud contract.  New information about conflicts of interest surfaced.  The Pentagon will review during the stay whether conflicts had impacts on the integrity of the procurement.  The government’s unopposed motion was granted to stay this case.

Judge Bruggink’s order suggests that the Defense Department could thoroughly re-review whether two people Oracle alleges shaped the procurement in AWS’ favor actually did so.  Oracle alleges AWS created a conflict of interest when it rehired employee Deap Ubhi in November 2017 after Ubhi spent close to two years working for the Pentagon—including on the JEDI contract—within its Defense Digital Service. Oracle alleges that Ubhi, who publicly described himself on Twitter as an “Amazonian” while still working for the Pentagon in January 2017, had significant influence in shaping the JEDI acquisition.

The Pentagon acknowledged Ubhi worked on the JEDI contract for seven weeks, but stated his role was limited and that the key acquisition decisions were made after Ubhi left. Ubhi recused himself from JEDI-related work in October 2017, one month before he was rehired at AWS, according to legal filings. The filings indicate the Pentagon called Oracle’s allegations a “broad fishing expedition” and said its contracting officer found no conflicts of interest regarding Ubhi during her investigation.

Why IBM and Oracle are Protesting the Jedi Cloud Contract

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By Debbie Gregory.

The biggest cloud companies, including Amazon, Microsoft, IBM and Oracle, had all been jockeying for bidding position for the winner-take-all Joint Enterprise Defense Infrastructure (JEDI) contract. IMB proactively filed a pre-award bid protest with the Government Accountability Office just days before final bids for the lucrative but controversial contract were due.

The contract was ultimately awarded to Microsoft Azure. Oracle Corp had also filed a protest against the Pentagon’s “winner-take-all” cloud computing contract, citing that it restricts the field of competition.

Defense Department officials said in early March that the $10 billion, 10-year contract would be bid out to a single cloud provider, arguing that using more than one provider would add needless complexity.

“We’ve never built an enterprise cloud,” said Dana Deasy, the Pentagon chief information officer overseeing the process. “Starting with a number of firms while at the same time trying to build out an enterprise capability just simply did not make sense.”

“Throughout the year-long JEDI saga, countless concerns have been raised that this solicitation is aimed at a specific vendor,” said Sam Gordy, general manager of IBM U.S. Federal. “At no point have steps been taken to alleviate those concerns.”

The Jedi project involves moving massive amounts of Defense Department data to a commercially operated cloud system. The JEDI cloud is expected to absorb some of the Pentagon’s existing efforts and is considered a “pathfinder” that the Defense Department will build upon for decades.

During this process, at least nine companies had coordinated their opposition in Washington to the government awarding the contract to a single provider.

The latest legal action follows a months-long coordinated lobbying campaign in Washington from IBM and other tech companies to encourage the Defense Department to change its procurement strategy. Whether it will work remains to be seen.