Oracle says federal court ‘erred gravely’ by letting DoD’s JEDI contract go forward

Attorneys for software giant Oracle America are telling a federal appeals court that a lower court judge made serious legal and factual errors when he ruled against the company and let the Defense Department go forward with its multibillion-dollar JEDI Cloud contract.

The brief, filed with the Court of Appeals for the Federal Circuit on Friday, represented the opening salvo in Oracle’s latest attempt to force the Pentagon to make changes to the JEDI contract, and came a week after DoD awarded the contract to Microsoft.

In the appeal, the company heralded the fact that Judge Erik G. Bruggink found DoD had violated procurement law through its decision to structure JEDI as a single-award, winner-take-all contract. But Oracle said he “erred gravely” by ruling the company wasn’t prejudiced by the decision because it had already been disqualified by other factors.

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Among other factors, the company said Bruggink, who decided the case at the Court of Federal Claims (COFC), used the wrong legal standard for prejudice. He ruled that Oracle wasn’t harmed by DoD’s sole-source decision because there wasn’t a “substantial chance it would have received the contract award” if the government had done everything right.

But Oracle attorneys said that standard only applies to post-award protests. Since the company challenged the RFP before DoD named a winner, it only needed to show that it suffered a “non-trivial competitive injury,” they said.

“COFC agreed that DoD’s single-award approach violated the law and that DoD might reissue the solicitation for multiple awards,” according to the brief. “DoD, accordingly, wrongfully deprived Oracle of the opportunity to compete under a multiple-award solicitation — a prejudicial injury.”

The lower court found Oracle couldn’t have won the JEDI contract because it was kicked out of the competition under one of the gate criteria the Pentagon laid out in the initial RFP. Oracle has challenged that gate factor, which required bidders to have three data centers certified by the government’s FedRAMP program before they submitted their bids, as illegal all along.

But in its latest appeal, the company also said the court shouldn’t have used that gate criteria as a reason not to order DoD to restart the JEDI procurement as a multiple-award contract. The court found that if DoD had changed its strategy to a multiple-award one, the security requirements would only have gone up.

“How DoD would structure JEDI under a multiple-award solicitation with task order competition appears nowhere in the record and COFC could not fill this gap,” attorneys wrote. “Under the Administrative Procedure Act, COFC may not presume how DoD would structure a multiple-award procurement as DoD must make that decision in the first instance.”

Oracle also contends that it now has the ability to pass the gate criteria the department laid out, and only failed the initial tests because DoD imposed arbitrary timeframes that dated back months before when bids were due to measure cloud providers’ capacity and security posture.

The prejudice and single-award vs. multiple-award issues were not the only alleged problems Oracle raised in its appeal.

The other two main issues it raised to the appeals court were ones that have dominated its legal filings in the two JEDI bid protest battles it has lost so far before the Government Accountability Office and the Court of Federal Claims.

The company continued to argue the entire JEDI procurement was hopelessly tainted by alleged conflicts of interest involving several DoD employees who worked for Amazon Web Services either before the procurement planning process, afterward, and in one case, both.

The allegation of pro-AWS bias on the part of the department was perhaps surprising in light of the fact that Microsoft, not Amazon, won the award. Amazon has several more days to decide whether to file its own post-award bid protest.

But Oracle argued DoD should have stopped the JEDI contracting process in its tracks once it had evidence that its employees might have violated federal conflict of interest laws. Instead, the JEDI contracting officer decided the alleged violations weren’t significant enough to affect the procurement, and referred the matter to the Pentagon’s inspector general. The DoD IG is still reviewing the JEDI contract, and expects to issue a public report sometime this month.

Oracle said Bruggink was wrong to trust the contracting officer’s judgement on how significant the alleged ethical breaches were, and should have ruled on his own that at least two former employees — Deap Ubhi and Victor Gavin — violated procurement integrity statutes.

“By deferring to the contracting officer, COFC broke from established law and injected uncertainty into an objective standard,” attorneys wrote. “The law required COFC to consider whether Ubhi’s and Gavin’s conduct violated section 208, and void the procurement if it did. COFC’s failure to do so requires reversal and remand for further proceedings.”

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