Innovation

US rejects Oracle's complaint against Pentagon's single-vendor cloud contract

The contract for the JEDI Cloud could be worth more than $10 billion over 10 years. The GAO rejected Oracle's arguments that it should go to multiple vendors.

Written by Stephanie Condon, Senior Writer Nov. 14, 2018 at 11:50 a.m. PT

A federal oversight agency on Wednesday rejected Oracle's complaint against the Pentagon's plans to award a massive cloud computing contract to a single vendor.

The Pentagon is legally entitled to grant the contract to just one vendor "because the agency reasonably determined that a single-award approach is in the government's best interests for various reasons, including national security concerns," according to the US Government Accountability Office (GAO).

Cloud

The Pentagon is in the process of considering bids from cloud computing vendors for the Joint Enterprise Defense Infrastructure (JEDI) Cloud. The contract for the JEDI Cloud could be worth more than $10 billion over 10 years. It's expected to include both IaaS and PaaS services in classified and unclassified environments.

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Back in August, Oracle filed a complaint arguing that due to the size of the contract, the Pentagon is legally obligated to use multiple vendors. Oracle also argued that the deal unduly restricted competition. It also said the Pentagon failed to consider potential conflicts of interest related to the deal.

The GAO rejected all of those arguments.

Amazon Web Services is widely considered the frontrunner for the JEDI project, while Microsoft has also put in a bid for the contract. Last month, Microsoft announced it expects to be certified for Top Secret US classified data by the first quarter of 2019.

Google recently dropped out of the running because it lacked the certifications required to host some classified data and argued that the deal might clash with its AI principles. Google said it would have submitted a proposal were it not for the single-vendor requirement.

Oracle, Microsoft, and Google have been lobbying Defense to make JEDI a multi-vendor arrangement. And last month, IBM followed Oracle's lead in filing an official complaint with the GAO against the single-vendor contract.

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In response to the GAO's decision Wednesday, an Oracle spokesperson gave the following statement to ZDNet: "Oracle believes that both the warfighter and the taxpayer benefit most from a rigorous and truly competitive process. We remain undeterred in our commitment to bring tremendous value and flexibility to our customers, including the Department of Defense. Oracle's JEDI bid represents a forward-thinking, next generation cloud focused on security, performance, and autonomy and a move away from the legacy cloud infrastructure that seems to be favored in the RFP. We are convinced that if given the opportunity to compete, DoD would choose Oracle Cloud Infrastructure for a very substantial portion of its workloads because OCI delivers the best, most performant and most secure product available at the best price."