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By Nick Wakeman

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Nick Wakeman

Court filing details Oracle's JEDI conflict-of-interest charges

In a seven-count complaint filed at the U.S. Court of Federal Claims, Oracle has released its most public and detailed version to date about what they see wrong the Defense Department’s JEDI cloud infrastructure contract.

Oracle lost a pre-award protest at the Government Accountability Office late last month and now has filed a lawsuit to try and stop JEDI in its current form.

Many of their allegations in the court mirror what Oracle complained to GAO about. In a nutshell, the company argues that the single-award strategy violates federal regulations that say the government should use multiple award contracts whenever possible. Oracle argues that DOD hasn’t justified its single award strategy and hasn’t followed requirements placed on it by Congress.

But the redacted complaint filed with the Court of Federal Claims also details more fully the conflict-of-interest allegations that Oracle says has set up the competition in favor of Amazon.

It is important to note that the filing is Oracle’s version of the story and a response hasn’t been filed by the Defense Department. So far, Amazon has not filed as an interested party in the legal action.

Oracle names two people who either worked for or consulted with Amazon and also were involved in the development of JEDI while they were Defense Department officials.

Deap Ubhi, now a general manager with Amazon Web Services, was a product director with the Defense Digital Service. He joined DDS in July 2016 but before that was in a startup business development role at AWS from January 2014 to January 2016.

Oracle describes him as the lead project manager for the JEDI solicitation. During JEDI’s development and before Ubhi left to rejoin Amazon, the company was negotiating with him to buy a startup company he owned. When those negotiations began, he stopped working with the JEDI team.

The JEDI contracting officer also looked at Ubhi's potential conflict-of-interest. But the CO ruled that no conflict existed because it had been over a year between his work at AWS and when work began on JEDI.

But Oracle argues that the contacting officer declined to investigate communications between Ubhi and Amazon when he was negotiating his return to AWS. The CO also didn’t identify non-public information that he had access to during his time at DDS or the documents on which he worked.

The contracting officer also didn’t interview Ubhi nor consider that he left DOD to rejoin AWS.

An attempt to reach Ubhi was not successful.

A second DOD official Oracle argues had a conflict-of-interest is Anthony DeMartino, whose DOD roles included chief of staff for the deputy secretary of defense and deputy chief of staff to the defense secretary. Prior to working at DOD, DeMartino was a consultant to Amazon.

In looking at his potential conflict, the contracting officer ruled that his “involvement was ministerial and perfunctory in nature.” He provided no input into the acquisition documents and didn’t participate substantially in the procurement, according to the contracting officer.

But Oracle argues that the CO didn’t talk to DeMartino nor review his emails or other documents.

In its complaint, Oracle outlines multiple areas where they see DeMartino being involved in the procurement, including editing the slides for a briefing given by Defense Secretary James Mattis.

DeMartino regularly briefed the secretary and deputy secretary and participated in sessions related to development of the JEDI acquisition including its business case, security strategy, acquisition strategy and whether it should be single or multiple award.

He also received information related to the acquisition, including information that shouldn’t be shared with contractors. DeMartino also reached out to the CIA for market research help. Oracle claims DeMartino also directly communicated with AWS about JEDI.

Attempts to contact DeMartino, a founding partner of Pallas Advisors, were not successful.

Oracle raised the same conflict-of-interest allegations in its protest filed at GAO, which ruled against the company.

In the case of Ubhi, he only worked on JEDI for about seven weeks and had left DOD nine months before the solicitation was released, according to the GAO decision.

In the case of DeMartino, GAO repeats DOD’s position that his role was mostly administrative.

According to GAO, Oracle is arguing that DeMartino and Ubhi helped shape the solicitation’s requirements. GAO reviewed how DOD justified its requirements and its single-award strategy and found DOD to have acted reasonably.

What is interesting in GAO’s decision in this area is that it implies that a conflict-of-interest that creates a prejudice against a company is generally part of a post-award protest. Because you don’t know if the solicitation is prejudiced against you until after an award has been made.

In other words, GAO is saying that Oracle needs to wait until after an award has been made to claim the conflict-of-interest prejudice.

It is important to remember, that the Court of Federal Claims isn’t reviewing GAO’s decision. It is approaching the case as if it were brand new, so you can be sure that they’ll rehash all of these arguments.

No hearings have been scheduled by the court.

As expected, IBM’s protest at GAO was dismissed on Dec. 11.

Posted by Nick Wakeman on Dec 11, 2018 at 9:45 AM

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