Court temporarily blocks work on DoD’s JEDI Cloud contract

The Court of Federal Claims issued a preliminary injunction on Thursday, blocking performance under the JEDI contract until further notice.

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A federal judge ruled on Thursday that the Defense Department cannot move ahead with work on its contentious JEDI Cloud contract, at least for the time being.

Judge Patricia E. Campbell Smith issued the preliminary injunction at the request of Amazon Web Services, which is suing the Pentagon in an effort to overturn the JEDI award to Microsoft.

Thursday’s order bars the department from moving ahead with any work on the contract, which was to begin as soon as Friday: under a schedule Amazon, DoD and Microsoft had already agreed to, the department had planned to issue its first substantive task order to Microsoft on Feb. 14.

Under that initial task order, DoD had planned to begin building the unclassified portions of the JEDI cloud environment in preparation for a handful of “pathfinder” projects later this year.

“We are disappointed in today’s ruling and believe the actions taken in this litigation have unnecessarily delayed implementing DoD’s modernization strategy and deprived our warfighters of a set of capabilities they urgently need,” Lt. Col. Robert Carver, a Pentagon spokesman, said in a statement. “However, we are confident in our award of the JEDI Cloud contract to Microsoft and remain focused on getting this critical capability into the hands of our warfighters as quickly and efficiently as possible.”

Amazon did not immediately respond to a request for comment on the ruling.

The judge’s order was filed under seal, suggesting the document contains references to sensitive information, so the court’s exact reasoning for siding with Amazon in the case is still unknown.

But in its motion for stop-work order, Amazon had argued that the court must prevent DoD and Microsoft from starting work on JEDI while the underlying bid protest unfolds, because the steps the department was planning to take in the early stages of the contract would “entrench” Microsoft as the incumbent contractor.

“Wrongful deprivation of a contract is undeniably irreparable harm under the court’s precedent,”
Amazon attorneys wrote. “Without an injunction, continued performance of the JEDI Contract could jeopardize the relief available to AWS if it prevails in the protest. In contrast, because Microsoft has no rightful claim to the JEDI Contract, it would not suffer any cognizable harm at all.”

Steven Schooner, a professor of government contract law at George Washington University said it is unusual – but not unprecedented – for the government to not agree to voluntarily stop work on a contested contract during a bid protest at the Court of Federal Claims.

“What is significant is that, given DOJ’s objection (on DoD’s behalf), the court is signaling that that it is more likely than not that the plaintiff has pled a case in which it appears to be entitled to a remedy and is likely to prevail on the merits,” he said.

However, in case Amazon does not, the judge is requiring the company to post a $42 million security bond “for the payment of such costs and damages as may be incurred or suffered in the event that future proceedings prove that this injunction was issued wrongfully.”

In court filings made public Wednesday, DoD had urged the judge to reject Amazon’s request to stop work, partly because any delays would indeed add costs to the department’s cloud computing endeavors.

In one declaration from an unnamed contracting official, the department suggested that if JEDI were delayed, it may move ahead to buy cloud services via other, existing contracting vehicles, but that doing so would “nearly double” the prices it paid to vendors.

“Over 20 different contracts for cloud services are available to the DoD that vary significantly in size, scope, CSP, and accessibility,” the official wrote in the heavily-redacted filing. “While still lacking several key features of the JEDI Cloud … [DoD] anticipates a financial harm of between $5 and $7 million dollars every month that performance of the JEDI contract is delayed.”

Defense officials had also argued that delaying JEDI would harm national security.

“The continued absence of DoD-wide, enterprise cloud computing capability seriously impedes the military’s ability to collaborate and share information with our military services, partner nations, and the intelligence community,” Lt. Gen. Brad Schwedo, the Joint Staff’s chief information officer wrote in a declaration to the court. “The United States cannot expect military success fighting tomorrow’s conflicts with yesterday’s technology. Providing DoD with rapid access to an enterprise cloud, one which provides elastic computing power and storage, is vital to U.S. national security.”

But Amazon attorneys told the judge she should not be persuaded by arguments over national security urgency. Since the initial request for proposals was first released in July 2018, the contract has already been delayed by two other legal challenges and at least one internal investigation.

“DoD did not display the urgency it now chums after it closed that investigation,” AWS wrote in one of its filings. “Rather than awarding the contract to allow performance by July 2019, DoD initiated a ‘review’ of the JEDI procurement by Defense Secretay Mark Esper. Before Secretary Esper even commenced his review, he publicly confirmed there was no ‘hard timeline’ for its completion, and certainly did not indicate imminent urgency for national security.

(This story will be updated)

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