Pentagon can proceed with $10bn ‘war cloud’ contract, judge rules

The US Department of Defense can go ahead with plans to award a multi-billion dollar contract to revamp its data storage system, a federal judge has ruled, rejecting a legal challenge claiming a conflict of interest.

The US Court of Federal Claims on Friday knocked down a case brought by the cloud computing company Oracle, which claimed the Pentagon’s contract-awarding process gave undue favor to Amazon Web Services and posited conflicts of interest between the department and the tech giant.

“An organizational conflict of interest does not exist and … individual conflicts of interest did not impact the procurement” process, wrote Senior Judge Eric Bruggink in his opinion, adding that Oracle failed to “demonstrate prejudice.”

Oracle Corp Chief Executive Larry Ellison ©  REUTERS/Noah Berger

The ruling clears the path for the Defense Department to proceed with its Joint Enterprise Defense Infrastructure (JEDI) project, which seeks to develop a new storage system for the department’s data, dubbed the “war cloud.” After Google dropped out of the bidding contest last year, Microsoft and Amazon have emerged as the most likely candidates for the $10 billion contract.

The DoD and Amazon have both denied Oracle’s accusation of bias, stating the company’s services simply did not meet the project’s requirements.

“AWS ... stands ready to support and serve what’s most important – the DoD's mission of protecting the security of our country,” an Amazon spokesperson said in a statement on Friday, adding that the Pentagon “deserves access to the best technology in the world.”

While Amazon founder Jeff Bezos is the frequent target of President Donald Trump’s ire on Twitter, leaked emails revealed last year that a company executive held behind-the-scenes discussions with administration officials, advising them on the creation of a new government procurement portal. The legislation that created that portal was dubbed the “Amazon amendment” by critics, who raised the specter of public-private collusion.

Last October, Bezos came out vocally in favor of the JEDI deal, declaring that “If big tech companies are going to turn their back on the Department of Defense, this country is in trouble,” insisting the US “needs to be defended.”

The JEDI contract is expected to be awarded in late August.

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