Court keeps Amazon’s JEDI challenge intact, dealing blow to DoD, Microsoft

A federal judge on Wednesday rejected motions by the Defense Department and Microsoft that would have partially dismissed Amazon Web Services’ lawsuit challenging the JEDI Cloud contract, likely prolonging the litigation process in a bid protest saga that has already dragged on for more than two years.

The government and Microsoft — the winner of the multibillion dollar contract — had asked the Court of Federal Claims to dismiss the portion of Amazon’s suit that claimed JEDI was tainted by conflicts of interest, including alleged improper involvement by former President Donald Trump. Wednesday’s ruling does not mean the court has reached any conclusions on those allegations, but does signal that Judge Patricia E. Campbell-Smith believes they deserve a full airing before the court.

However, Wednesday’s long-awaited decision also casts considerable doubt on whether DoD will attempt to proceed with the JEDI contract at all, at least in its current form.

In an information paper sent to members of Congress in January, the department said that if the court agreed to allow Amazon to try to prove its improper influence allegations, the litigation process would become much more complex and “elongate the timeline significantly.” DoD added that it “would have to reassess its strategy going forward” if a scenario akin to Wednesday’s ruling were to occur.

That’s largely because proving those allegations would require depositions from senior DoD and former Trump administration officials. Indeed, Amazon has indicated in prior court filings that it wants to depose the former president himself, though the judge has not yet made any decisions on which, if any, current or former officials would be compelled to testify.

“The record of improper influence by former President Trump is disturbing, and we are pleased the court will review the remarkable impact it had on the JEDI contract award,” Amazon said in a statement shortly after the ruling. “We continue to look forward to the court’s review of the many material flaws in the DoD’s evaluation, and we remain absolutely committed to ensuring that the department has access to the best technology at the best price.”

Meanwhile, Microsoft downplayed the import of Wednesday’s decision.

“This procedural ruling changes little,” said Frank Shaw, the company’s top spokesman. “Not once, but twice, professional procurement staff at the DoD chose Microsoft after a thorough review. Many other large and sophisticated customers make the same choice every week. We’ve continued for more than a year to do the internal work necessary to move forward on JEDI quickly, and we continue to work with DoD, as we have for more than 40 years, on mission critical initiatives like supporting its rapid shift to remote work and the Army’s [Integrated Visual Augmentation System].”

Asked for comment on Wednesday’s ruling, a Pentagon spokesman said the department had “nothing to add” to what it said in the January info paper that foretold a reassessment of the strategy.

A decision on whether the court would let the political influence claims proceed has been anticipated since January, when litigants filed their final arguments for and against the partial dismissal.

DoD and Microsoft had claimed that Amazon’s allegations of bias came too late – and that under a court precedent known as “Blue and Gold,” any allegations of political influence in the source selection process needed to be raised in a pre-award protest, rather than after Amazon had already lost the contract.

“If AWS had raised its bias allegations in a timely pre-award protest, this court could have adjudicated those claims before DoD spent many months evaluating — and then reevaluating — the proposals. If AWS had persuasively shown bias, this court could have directed DoD to replace its allegedly-biased source selection team, before DoD and the offerors expended the months of time and effort associated with the corrective action, which involved numerous proposal submissions and amendments to the solicitation,” Microsoft attorneys wrote. “The court also would have resolved AWS’s objections before DoD twice disclosed Microsoft’s price to AWS in post-award debriefings. AWS’ serial ‘wait and see’ approach to litigating its bias claim is directly at odds with Blue & Gold’s policy of discouraging strategic, untimely protests.”

Although that argument evidently proved unpersuasive, it’s not yet clear why. Judge Campbell-Smith filed the text of her Wednesday order under seal, and gave attorneys for the parties until May 28 to propose redactions that would remove sensitive information from the document.

The JEDI contract has been a subject of intense controversy almost since the initial planning for the up-to-ten-year procurement began in September 2017. DoD has faced three separate bid protests, including two lodged by Oracle before the award was made to Microsoft in Oct. 2019, and the current lawsuit, which Amazon filed shortly after it lost the contract.

And as the Pentagon has hinted, any further delays could potentially cause it to walk away from the current JEDI approach. In a court filing just two weeks ago, the government urged the judge to provide some insight on when she might rule, saying the delays in delivering cloud services to warfighters were already creating “national security implications.”

And there are many indications that the single-award JEDI approach may have outlived its usefulness already.

Unwilling to wait out the court battle, the Army, Navy and Air Force have already begun rolling out multi-cloud environments of their own, using separate procurement vehicles that allow them to buy services from Amazon, Microsoft and other vendors.

The Air Force’s Cloud One was the first such large-scale examples. In an interview with Federal News Network in March, Nicolas Chaillan, the Air Force’s chief software officer, said his service sees his a multi-cloud, multi-vendor approach as essential.

“It’s all about timing. If I had to make the decision three years ago, I could have had decided to make the same [single-award] decision,” he said during Federal News Network’s DoD Cloud Exchange. “With technology, things change fast, and the time it takes us to do our acquisition process puts us into trouble sometimes. If we were to make the same decision today, we would probably not make the same decision.”

Via its newly-established Enterprise Cloud Management Agency, the Army is also pursuing a multi-cloud approach. And it’s considering a separate enterprise contract to refactor and migrate existing applications to its new cloud environment, called cArmy.

“We’ve adopted a multi-cloud strategy where I’ve got a number of different cloud service providers that I’m leveraging that I have to deliver common cloud services into, and then I’m able to let tenants start to populate those secure environments, and only focus on their application, their data sets and their mission and their customer,” Paul Puckett, the agency’s director said during the same event. “What we’ve seen is that rather than taking nine to 12 months for a system to move to the cloud, for instance, we had one start in February of 2020 and went operational by May.”

The Army is also striving to leverage multiple vendors’ clouds at the tactical edge — where JEDI was designed to deliver cloud services from a single company, said Alex Miller, the science and technology advisor to the Army’s deputy chief of staff for intelligence.

“Every day I turn on my phone and I have access to poly-cloud technologies. What is really difficult for us today is contracting in a way that allows us to leverage services vice focusing on kit,” he said. “It’s very hard when we start shifting that to, ‘Hey, I want to buy a little bit of this service and combine it with a little bit of that service, and I don’t know the pricing model is for this over time, because I don’t know what my user base is going to do. But a poly-cloud technology ecosystem is not an unachievable goal. It’s something we’re striving towards.”

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