Pentagon Wins Lawsuit Over Massive Cloud-Computing Contract
July 12 2019 - 1:23PM
Dow Jones News
By Ryan Tracy
A federal judge declined to throw a roadblock in front of a
massive Pentagon cloud-computing contract, granting a legal victory
to Amazon.com Inc. in its bid to secure the deal and a loss to
competitor Oracle Corp.
Senior Judge Eric Bruggink of the U.S. Court of Federal Claims
on Friday ruled against Oracle, which had sued to protest a Defense
Department decision last year to move forward with the bidding
process for a contract to provide the military cloud-computing
power. The contract is estimated to be worth up to $10 billion. The
Pentagon has said it plans to award the contract by the end of
August.
In a three-paragraph order, the judge rejected Oracle's
allegations that potential conflicts of interest weren't properly
investigated. He backed the government's findings that the
procurement process was proper and in accordance with the law.
"This is a clear win for Amazon and [founder Jeff] Bezos,"
analysts at Wedbush Securities said in a note to clients Friday.
Microsoft Corp. is also in the running for the contract.
A spokeswoman for Oracle declined to address the litigation
Friday but said the company stands ready to work with the
government on cloud computing.
A spokesman for Amazon Web Services, the Amazon subsidiary
bidding on the deal, said it stands ready to support the Defense
Department's mission. "Despite the many attempts by others to
distract and delay, today's ruling reaffirms what we've said all
along, that Oracle's claims were meritless and a desperate attempt
to distort the facts," he said in a statement.
A Defense Department spokeswoman had no immediate comment. A
representative for Microsoft declined to comment.
The contract for the program known as Joint Enterprise Defense
Infrastructure, or JEDI, was originally expected to be awarded this
past spring, but was delayed after allegations of conflicts of
interest, in part involving a former Pentagon employee who worked
at Amazon both before and after working on cloud computing for the
government.
The Wall Street Journal earlier this month reported on meetings
between former Defense Secretary Jim Mattis and Amazon executives
including Mr. Bezos. Both Amazon and the Pentagon have said the
contract didn't involve any special treatment.
The deal is also facing hurdles in Congress. A bill passed by
the House on June 19 stipulates that no funds be spent to move data
to the JEDI cloud until the Defense Department explains how it
plans to later transition to multiple cloud providers, the
government's stated preference.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
July 12, 2019 14:08 ET (18:08 GMT)
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