Oracle [ORCL] has filed a pre-award protest challenging the Pentagon’s decision to stick to a single-award contract for its $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud project.
The protest, submitted to the Government Accountability Office on Monday, arrives ahead of a Sept. 17 deadline to submit bids for the massive cloud computing effort and challenges the DoD’s decision to avoid a multi-cloud approach.
“The technology industry is innovating around next generation cloud at an unprecedented pace and JEDI virtually assures DoD will be locked into legacy cloud for a decade or more. The single-award approach is contrary to industry’s multi-cloud strategy, which promotes constant competition, fosters innovation and lowers prices,” Deborah Hellinger, a spokeswoman for Oracle, told Defense Daily. “The DoD seeks to procure so-called ‘commercial services’ that are wholly inconsistent with the commercial sector and the [determinations & findings] falls far from meeting the rigorous legal standards required for a single award contract.”
Oracle is arguing a single-award approach fails to factor in rapid technological change over the ten-year work period for JEDI and claim DoD worked around procurement regulations requiring multi-award consideration for contracts over $112 million, according to a copy of the bid protest document.
“Standardizing on a single cloud today makes no more sense than standardizing on a single on premise computing architecture decades ago,” Oracle wrote in its protest. “Indeed, DoD previously has acknowledged that the diversity of its mission necessitates a multi-cloud environment.”
DoD released the final JEDI RFP on July 26 after missing an original May deadline and completing a full review of the acquisition effort (Defense Daily, July 26). The review followed persistent industry pushback on the single-award structure potentially creating bias toward the largest cloud computing companies, such as Amazon [AMZN] Web Services.
“Neither DoD nor commercial technological marketspace leaders can accurately predict where the still nascent cloud computing industry will be or who will lead it five years from now, much less 10. With quantum computing, blockchain, artificial intelligence and machine learning, internet of things, and other technologies actively disrupting a disruptive technology, the only constant is change. DoD knows this,” Oracle wrote in its protest.
Oracle argues that a single-award approach cuts out a significant portion of the market from legitimately competing for the JEDI award.
“Significantly, the multiple award process tracks best practices of the cloud market today: namely a multi-cloud approach benefiting from differentiated products, varied expertise, and constant competition to encourage both innovation and lower prices,” Oracle writes.
GAO is expected to release its decision on the protest in November.
A DoD spokesperson said the department does not comment on pending litigation.
Washington Technology first reported the news of Oracle’s pre-award protest.
Oracle has previous success challenging DoD in this area, when GAO released a decision on May 31 upholding a protest of an award to REAN Cloud to provide cloud work for U.S. Transportation Command (Defense Daily, June 1).
The original contract to REAN Cloud was worth $950 million, but was then reduced to $65 million in April and adjusted to only cover TRANSCOM cloud efforts.
GAO said in their decision the award to REAN, which is a partner of Amazon Web Services, failed to comply with statutory preconditions and ordered the deal terminated.