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Nick Wakeman

Does Oracle's lost protest lay the foundation for future litigation?

There is a lot we don’t know about the U.S. Court of Federal Claims decision rejecting Oracle's lawsuit challenging the Defense Department’s JEDI cloud contract strategy.

From the judge’s two-page order released Friday, it seems like a slam dunk for DOD and Amazon Web Services, which had joined the case as a co-defendant because of Oracle’s accusations that there was a conflict of interest between DOD and AWS.

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The judge reject those rejected those arguments and his full written opinion is expected in the next week or so.

But as I try to read between the lines of his order and look back at previous rulings both at the court and at the Government Accountability Office, I can’t help but wonder if the foundation is there for the next JEDI protest.

The competition for the $10 billion single-award contract for cloud infrastructure is now a race between Microsoft and AWS.

So what happens if AWS wins? What might Microsoft protest? The seeds of that protest might be found in Oracle’s failed attempt.

From the court case, we’ve learned that Oracle admitted that it couldn’t pass the gate criteria described in the solicitation. The court ruled that the criteria was reasonable and that pretty much killed the protest. 

Oracle was eliminated from competition. Even if there were problems with the rest of the solicitation and the procurement process, it doesn’t really matter as far as Oracle is concerned.

Microsoft obviously passed the gate criteria.

The judge also rejected Oracle’s claims that there were conflicts of interest involving certain people who worked at AWS, then worked at DOD and then went back to AWS.

The judge supported the contracting officer’s findings that an organizational conflict of interest didn’t exist and the alleged individuals' conflicts of interest did not have an impact on the procurement.

This is the part I want to read more about. I want to understand what the judge is saying and how he reached his conclusions.

It is important to note that one of the requirements for making a conflict of interest claim is to show that you have been damaged. In rejecting Oracle’s protest, GAO said because there had been no award, Oracle couldn’t show damage from a conflict of interest. That kind of determination can only be made after an award.

If the judge says something similar, then that’s a big opening for Microsoft if they lose the competition.

The two-page order leaves very little wiggle room so my hypothesis might be a stretch. The judge says that the contracting officer’s findings on the conflicts of interest were “not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

But what’s behind that? I’m sure Microsoft’s attorneys want to know too.

If Microsoft wins, it’ll be a whole other matter if we see an AWS protest.

And another wildcard is Congress, where there is still a lot of skepticism about JEDI and the single-award approach. The longer an award is delayed, the more likely we are to see some action from Capitol Hill. They probably won’t stop and award but they could put up roadblocks to its usage.

So we’ve passed a major milestone with the Court of Federal Claims ruling but suffice it to say, there are still more checkpoints ahead.

Posted by Nick Wakeman on Jul 15, 2019 at 11:08 AM


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