A new problem for Amazon in the $ 10 billion JEDI contract



The Department of Defense has agreed to investigate some of the central complaints raised by Oracle in the context of a lawsuit. The lawsuit was the method used by Oracle to win a $ 10 billion Cloud Computing contract from Amazon, which has long been considered the favorite of the win-win contract.

On Tuesday, Pentagon lawyers demanded a suspension – that is, a postponement – of the lawsuit filed by Oracle, to which no one, not even Oracle, objected. The motion to suspend was sealed, the Wall Street Journal reported.

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But, in granting the suspension, the court said the Pentagon was asking to investigate the charges raised in the case, according to the court record, as Business Insider has seen.

In particular, Bruggink J. wrote:

"For valid reasons, the court approves the unopposed petition of the government to suspend the case while the Ministry of Defense if any potential conflicts of personal interest have affected the integrity of JEDI's cloud supply. The government is directed to file a status report within five days of the DoD's final decision. "

The Joint Defense Infrastructure Program (JEDI) is a 10 year contract of up to $ 10 billion. The Pentagon would use a single cloud provider for most of its general computing needs. While Amazon eliminates its competition in the cloud market – not only in market share, but in the number of features offered by its cloud, it has long been considered the market's favorite.

But competitors such as Google, Microsoft and Oracle complained that the Pentagon was going to use only one provider, probably Amazon, instead of splitting the premium into several companies. Since then, Google has abandoned the race to contract, citing ethical concerns and fearing to lack certain capabilities to fulfill the contract.

Oracle has tried various methods to influence and stop this train, including the fact that CEO Safra Catz raises the issue during a dinner with President Trump, as well as an unsuccessful protest with the General Service Administration (GSA) , the body that manages government contracts.

In the end, Oracle filed a lawsuit, alleging that two former DoD staff members involved in the deal had links to Amazon, creating a conflict of interest that falsely distorted the balance. in favor of Amazon. The most serious allegation concerned Deap Ubhi, an employee of Amazon before coming to work for the government as part of the JEDI contract process, and then joining Amazon afterwards.

Earlier, Oracle had also asked the court to authorize the review of a multitude of documents outlining Amazon's offer of this contract. In a query at the time, arguing that such documents should not be granted to Amazon, Amazon is eager to defend it, claiming that Oracle "grossly overestimate" the involvement of the company. Ubhi to the JEDI process – limited to seven weeks of market research – until he recuses himself from the process. He objected "as a result of the interest shown by AWS for a start-up he owned," Amazon said at the time.

The person taking over the contract for the Pentagon examined his potential conflict of interest and concluded that it had no impact on the transaction and that Ubhi had not gone any further than to write a table of contents to include before giving up. Ubhi could not be contacted immediately for comment.

And so, it seems that the Pentagon decides to stop the train of lawsuits and investigate.

Interestingly, this does not put Amazon out of the race with a long shot. The company's cloud services are so advanced that even the former Microsoft executive, Steve Ballmer, the largest shareholder of Microsoft, has chosen AWS to host the new technology of his basketball team. Ballmer told Bloomberg that even though he was "bleeding" Microsoft, AWS had the best technology to run CourtVision, its new mobile video technology for fans of the Los Angeles Clippers.

And, even if the sabotage of Oracle brings the Pentagon to split the contact between several cloud providers, it is not for nothing that Oracle would be one. The next most likely choice would be Microsoft, and some industry observers believe that Microsoft is increasingly planning to take the risk.

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Amazon did not immediately respond to a request for comment.


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