Makes sense, this does, says US appeals court as it swats away Oracle's protests in $10bn JEDI contract spat

Seems the only things being generated by Pentagon deal are legal arguments

Updated The ongoing JEDI pantomime took another turn today [PDF] as Oracle's challenges to the handling of the winner-takes-all $10bn cloud contract were rejected by a US appeals court.

Somewhat irrelevant to Microsoft, which was awarded the Joint Enterprise Defense Infrastructure (JEDI) contract in October, Big Red's protest was related to an alleged breaking of the rules in how the contract was set up by the Pentagon, as well as allegations of conflicts of interest with Oracle's fellow JEDI loser, Amazon Web Services.

The lucky winner, pending all the appeals and stays, of the JEDI contract will be expected to provide America's Department of Defense with enterprise-grade cloud computing services over the course of 10 years.

That the deal was awarded to a single provider, rather than multiple vendors, upset Oracle among other things. Hence the lawyers and legal challenges.

The US Court of Federal Claims took a long, hard look at the database goliath's gripes, and its decision on Wednesday was not good news for Larry Ellison's crew.

Although the court agreed that a legal error had been committed when Uncle Sam opted for the single-source approach, it also concluded that the error had been harmless. Even if the multi-source approach had been used, "Oracle would not have been able to satisfy the requirements of Gate 1.2."

Gate 1.2 required a JEDI bidder to have already in place at least three commercial cloud-hosting data centers within the US, separated by at least 150 miles, and met various requirements regarding FedRAMP, which is the US government's program for assessing and managing the security of computer systems used by federal workers.

"Oracle," according to the court, "did not satisfy the FedRAMP Moderate Authorized requirement as of the time the proposals were to be submitted."

Furthermore, the court also rejected Oracle's contention that Gate 1.2 was unreasonable because it "unnecessarily restricted competition." Not so, said the court, which looked at the needs of the Department of Defense and reckoned its requirements were reasonable.

Thus, in this instance, the complaint regarding single versus multiple awards was moot.

The decision, filed this morning, held that "the only logical conclusion is that, if multiple awards were made, the security concerns would ratchet up, not down."

If multiple awards were made, the security concerns would ratchet up, not down

The court also looked into Oracle's contention of conflicts of interest of three former Dept of Defense employees that had allegedly tainted the procurement. For instance, two were negotiating for employment with AWS at the time of the JEDI procurement, according to court filings. The DoD had already denied there had been any conflicts of interest after probing itself last year.

Again the court rejected the challenge, agreeing with the contracting officer that while there may have been some conflict, "those conflicted individuals did not impact the decision to use a single award approach or the substance of the evaluation factors."

Those worrying how all those lawyers will manage to pay for their Ferraris need not fret. The rejection by the appeals court of Oracle's challenge is one of several appeals being processed by the US legal system regarding JEDI.

In a separate vendor bias lawsuit filed by Amazon against the United States and Microsoft, the Pentagon last month [PDF] asked for extra time to look over the contract bids again, and was allowed to stall the case until September 16. Amazon’s objection to the whole affair is based on a contention that Microsoft’s bid relied on allegedly "non-compliant" storage technology and should therefore have been ruled out.

Oracle, Microsoft and Amazon all declined to comment. ®

Updated to add

On Friday the US Department of Defense officially confirmed the $10bn contract is going to Microsoft.