JEDI lawsuit on hold as judge grants DoD’s request to reconsider contract

A federal judge has granted the Defense Department’s request to revise and reconsider at least some parts of its controversial JEDI Cloud procurement.

The order, issued Friday, puts the bid protest lawsuit Amazon Web Services had filed on hold for at least the next four months while DoD updates the contract to deal with at least one shortcoming the Court of Federal Claims has already identified.

It’s not yet clear how many aspects of the vast, complex procurement DoD will be reconsidering when it asks AWS and Microsoft to submit revised bids. But in a statement, the Defense Department suggested the changes and reconsiderations would be “limited.”

“We are pleased with the court’s decision to grant our motion for voluntary remand,” said Lt. Col. Robert Carver, a Pentagon spokesman. “We will immediately execute the procedures outlined in the motion for voluntary remand, issuing a solicitation amendment to allow for limited proposal revisions and a reevaluation of the proposals. We remain focused on delivering this critical capability to warfighters as quickly and efficiently as possible.”

In its own request to Judge Patricia E. Campbell-Smith, the department had asked for a fairly narrow remand to deal primarily with one issue, called Price Scenario 6, which had to do with how bidders priced data storage offerings in the JEDI Cloud environment. That’s the same portion of the contract the judge faulted last month when she issued a preliminary injunction stopping work on JEDI.

In an order unsealed on Saturday, the court agreed to accept DoD’s proposal for only a limited recompetition.

But Amazon had objected to that approach. The company has been arguing that the court should force the department to reconsider a much broader range of issues, since cloud storage is inextricably linked to other service offerings in the contract and how they’re priced, AWS claims.

In court filings, the company charged that DoD’s approach would simply let it amend the solicitation to suit the bid Microsoft already submitted. Amazon asked for an order that would force the department to reopen bidding on five other evaluation factors beyond the price scenario at issue.

“DoD’s proposed pricing constraint would irrationally benefit only Microsoft by preserving its position as the allegedly lowest-priced offeror, after this court specifically exposed that position as false in its preliminary injunction decision based on Microsoft’s noncompliant solution to Price Scenario 6,” attorneys wrote in a recent filing. “The court should not allow DoD to unfairly constrain the recompetition in this way.”

In a statement on Monday, Amazon said it would seek relief with the court if DoD’s remand process does not address all of its concerns.

“In the interests of getting the best technology to our warfighters as quickly as possible, we hope that the DoD’s corrective actions will fully and fairly address all of the issues raised in our bid protest,” the company said. “Should the same errors, flaws, and biases fail to be addressed in the re-evaluation, we will continue to seek an objective and comprehensive examination from the Court

In its own statement, issued prior to the decision, Microsoft criticized Amazon’s request for a broader reopening of the contract.

“It’s now apparent that Amazon bid too high a price and is seeking a do-over so it can bid again. As the IG’s report indicates, Amazon has proprietary information about Microsoft’s bid that it should never have had,” said Frank Shaw, a Microsoft spokesman. “At this stage, Amazon is both delaying critical work for the nation’s military and trying to undo the mistake it made when it bid too high a price.”

The statement was a reference to portions of a sweeping DoD Inspector General report, issued Tuesday, that found that after the contract award, DoD inadvertently sent AWS 13 separate technical evaluation board reports that contained sensitive information about Microsoft’s JEDI proposal.

The department took steps to contain the data spillage once it discovered the problem, but 71 separate AWS employees had already seen the documents by the time DoD alerted the company to find and destroy them.

The same IG investigation found the department’s overall acquisition approach — including the decision to structure JEDI as a winner-take-all contract — was “reasonable.”

Despite its preference for a narrow approach to reconsidering the JEDI contract, the Pentagon has told the court it’s possible that whatever action it takes over the next several months could eliminate the need for more litigation.

But that’s far from a sure bet. And it’s possible that the reconsideration could take even longer than Friday’s court order envisions.

Judge Campbell-Smith ordered government, AWS and Microsoft attorneys to submit a status report by June 16 to update the court on how the process is playing out. Once the reconsideration process is finished, another update is due within five days, along with each party’s views on whether the lawsuit needs to continue. But the order makes clear that the 120-day remand period could be extended.

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