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By Nick Wakeman

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Nick Wakeman

Oracle takes a hit but JEDI fight not over yet

As widely expected, the field is now down to Amazon Web Services and Microsoft for the $10 billion "JEDI" cloud infrastructure contract. But this one is far from over folks.

The Defense Department announced Wednesday that downselect from four bidders -- AWS, Microsoft, IBM and Oracle -- as part of a broader statement announcing that DOD's investigation into possible conflicts of interest found “no adverse impact” on the procurement.

Pentagon spokeswoman Elissa Smith said July would be the earliest we would see an award.

But there are a few hurdles to clear before then.

DOD has asked that the U.S. Court of Federal Claims lift its stay on the lawsuit Oracle filed in objecting to the JEDI single-award strategy. Oracle also made allegations about possible conflicts of interest within DOD in shaping the procurement. The court paused the case after DOD said it found some new information.

With this new DOD decision, there is no reason the court can’t move forward with the case. Before the stay, the court was to hold oral arguments on April 4. Therefore, that will need to be rescheduled. A new date has not been set yet.

This is a blow to Oracle but all hopes for them aren't dashed. GAO has already ruled against their conflict of interest allegations as well as the challenges to the single-award strategy. But it isn’t unheard of for the Court of Federal Claims to make a different ruling even when it is looking at essentially the same set of facts.

A big difference between what GAO saw and what is available to the court is this latest DOD investigation, which some sources say is the third time the conflict of interest allegation has been reviewed.

Oracle likely can question DOD’s conclusions before the judge. As much as a long shot as it might seem, Oracle can argue that a different finding should be made based on the facts from the investigation. That is probably the last straw they can grab as far as conflicts of interest go.

But the court is a wild card here. They still need to rule on the appropriateness of the single-award strategy. GAO ruled in DOD’s favor on that point but the court isn’t bound by the same rules, and has more authority than GAO to enforce a ruling.

Another hurdle before a final award could be a challenge to being eliminated from the competitive range. Oracle and IBM can both challenge DOD's decision, but that will likely need to be after the court makes its ruling.

Oracle's lawsuit mainly attacks the development of the solicitation, while a challenge to the elimination from the competitive range would be a challenge to how DOD conducted its technical evaluation.

Also hanging out there is IBM. They filed a protest on the eve of proposals being due in October, but GAO dismissed after Oracle filed its lawsuit at the Court of Federal Claims. IBM is arguing some of the same points as Oracle but Big Blue could refile its protest after the court makes its ruling. IBM's protest would have to raise challenges that weren’t included in the court’s ruling.

Oracle’s attorney declined to comment and IBM also declined.

And the final hurdle is another protest after an award has been made. Either protester -- AWS or Microsoft -- would have the choice of going to GAO or directly to the Court of Federal Claims. Like the challenge to the competitive range, this would most likely look at how DOD conducted its evaluation of the proposals.

So, there is still a lot of ground to cover before JEDI is awarded and free and clear to operate. I predict that it won't be until early in calendar year 2020 before that happens.

Posted by Nick Wakeman on Apr 10, 2019 at 9:57 AM

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