Info-tech

Oracle loses appeal in $10-billion Pentagon contract row

Bloomberg | | Updated on: Sep 03, 2020
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Company was not qualified anyway, was not harmed by government errors, says judge

A US appeals court has rejected Oracle Corp’s challenges to the Pentagon’s disputed $10-billion cloud-computing contract.

Oracle had raised a number of issues, including allegations of conflicts of interest involving Amazon.com Inc., and claims the Pentagon violated its own rules when it set up the contract to be awarded to a single firm. The US Court of Appeals for the Federal Circuit on Wednesday affirmed a lower court ruling that Oracle wasn’t harmed by any errors the Pentagon made in developing the contract proposal because it wouldn’t have qualified for the contract anyway.

“otwithstanding the extensive array of claims raised by Oracle, we find no reversible error in the US Court of Federal Claims’ decision to reject those arguments,” Circuit Judge William Bryson wrote for the three-judge panel.

Cloud computing deal

Oracle was fighting its exclusion from seeking the lucrative cloud computing deal, known as the Joint Enterprise Defense Infrastructure, or JEDI. The Pentagon awarded the contract to Microsoft Corp. in October over market leader Amazon Web Services. The project, which is valued at as much as $10 billion over a decade, is designed to help the Pentagon consolidate its technology programmes and quickly move information to warfighters around the world.

Oracle argued that the Defense Department unfairly and unnecessarily tailored the minimum contract requirements for Amazon and Microsoft. The company also alleged that the bidding process was fatally tainted by conflicts of interest, including former Pentagon employees who went on to work for Amazon after helping to craft the bid.

The Federal Circuit agreed with the Defense Department that it used competitive procedures, rejecting Oracle’s argument that a requirement for data centre capabilities ensured only Amazon and Microsoft would qualify for bidding. The panel also found the conflict-of-interest allegations raised by Oracle to be troubling but ultimately had no effect on the JEDI Cloud solicitation.

Amazon and Microsoft declined to comment. Representatives from Oracle didn’t respond to a request for comment.

The ruling is a win for the Pentagon, which over the last three years has faced criticism from lawmakers, industry and even President Donald Trump over its decision to choose just one company for the lucrative cloud deal. The Defense Department has said picking one vendor for the project would reduce its technical complexity and security risks.

Published on September 03, 2020

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