New court documents explain reasoning behind JEDI stop-work order

The federal judge handling the bid protest lawsuit over DoD’s multibillion dollar JEDI Cloud contract found that the Pentagon treated Amazon Web Services unfairly when it awarded the multibillion dollar contract to Microsoft, and that Microsoft’s bid included a technical approach that was not allowed under the terms of the contract.

The additional details in the case came via newly-unsealed court documents Friday afternoon. They explain Judge Patricia E. Campbell-Smith’s rationale for the order she issued last month that temporarily blocked DoD and Microsoft from getting to work on the JEDI contract.

And they show that out of a long list of allegations Amazon has made in its lawsuit, the ruling came down to the relatively mundane sorts of procurement law issues that dominate federal bid protests. Amazon’s headline-grabbing allegations of improper interference by President Donald Trump, for instance, are not mentioned at all.

Instead, the judge found that DoD allowed Microsoft to get by with a solution to data storage that shouldn’t have been allowed under the JEDI solicitation’s terms.

The exact details of the storage approach Microsoft proposed are redacted from the newly-released order and from other court filings. But the court found they did not comply with a provision in DoD’s request for proposals that required information stored in JEDI’s “Cloud data warehouse” to be “online” and “highly accessible” to JEDI users “without human intervention.”

The ruling suggests Microsoft was able to bid at a lower price because it proposed a “non-compliant” approach to data storage.

“The court considers it likely that [Amazon’s] chances of receiving the award would have increased absent defendant’s evaluation error,” the judge wrote. “Even if what appears to be a deficiency did not result in [Microsoft’s] elimination from competition, a reduction in the price advantage attributed by the Pricing Evaluation Board to [Microsoft’s] use of [redacted] storage likely would affect the price evaluation, which in turn, would affect the best value determination.”

Court documents show the DoD pricing evaluation board that helped inform the contract decision found that Microsoft’s data storage approach caused a “significant variance” in price between Amazon and Microsoft’s proposals.

DoD and Microsoft have argued that Amazon is splitting hairs over definitions of online and “highly accessible” storage, and that Microsoft’s approach is completely in line with what the Pentagon intended for JEDI. In any case, they say the department’s technical evaluation board had the discretion to decide whether Microsoft’s approach was feasible — and they decided it was.

The judge disagreed.

“Defendant has not identified any evidence in the record that the DoD’s decision to deem [Microsoft’s] proposal as ‘technically feasible’ resulted from an exercise of discretion, nor does it explain how the DoD’s discretion could extend so far as to allow it to depart from the precise and explicit definition of the term ‘highly accessible.’”

The decision is by no means the end of the case. Attorneys for Amazon, Microsoft and the government are still arguing over whether additional evidence should be brought into the lawsuit before they file their final arguments and the court issues a final judgement on whether to overturn the award. That’s not expected to happen for several more months.

But as part of her decision to issue the preliminary injunction, the judge did find that Amazon is likely to succeed on the same grounds that formed the basis for the stop-work order.

In arguing against the injunction, DoD argued that delaying the JEDI award would harm national security and nearly double its costs for cloud services. The court found some sympathy with that argument, and ordered Amazon to post a $42 million bond to cover those costs in case it turns out that the injunction should never have been issued.

But as a general matter, Judge Campbell-Smith said DoD would be harmed by the injunction less than Amazon would if work were allowed to get underway. The Pentagon had planned to issue its first task order to start building the unclassified portions of JEDI on Feb. 14, before the court blocked it.

“A delay in the JEDI program would simply require defendant to continue using the means by which it is presently accomplishing its important missions until the court can determine whether the procurement at issue was properly conducted,” the judge wrote. “Plaintiff has identified specific losses reasonably expected during the transition period including the loss of competitive advantage in any renewed competition, and damage to plaintiff’s ability to serve its customers.  These are precisely the types of injuries that this court has previously found to constitute irreparable harm.”

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