By: Charles Fraser
On October 25, 2019, the Department of Defense (DOD) announced it had awarded its cloud computing solicitation, Joint Enterprise Defense Infrastructure contract (JEDI), to Microsoft Corporation.[1] Amazon was predicted to win the contract as both tech companies’ battled to provide a cloud computing software for the nation’s defense system.[2] Since the DOD’s release of its request for proposal (RFP) for a modern cloud computing system to enhance our nation’s security, the battle to win the JEDI contract has been shrouded in controversy. Today, in the aftermath of the DOD’s final award decision, the controversy from the procurement process remains as Oracle America, Inc. (Oracle) takes its fight against the JEDI contract’s procurement process to the U.S. Court of Appeals for the Federal Circuit.[3]
In July 2018, the DOD released its RFP for the JEDI contract, which detailed that the contract would last for ten years and cost up to $10 billion.[4] The RFP also stated that the DOD would conduct a full and open competition, and that it would award the contract to a single contract vendor rather than multiple.[5] Since the RFP was issued, the DOD remained eager to award the contract in an effort to keep up with its adversaries.[6] Initially, the DOD noted in its RFP that the period of performance would commence on April 17, 2019.[7] However, the contract’s procurement process faced many setbacks and criticisms from IT professionals,[8]Congress,[9]and even the White House.[10] The contract decision was ultimately postponed multiple times and was not awarded until six months after the proposed start date.[11]
Since the RFP was released, one of the biggest controversies that it faced was its request to award the JEDI contract to a single cloud vendor.[12] After this detail emerged, Google publicly announced that it was dropping out of the bidding war because it believed that taking part in a single cloud vendor contract would conflict with its corporate values.[13] This controversy ultimately made its way to the White House with President Trump requesting Pentagon officials to audit the JEDI contract procurement over alleged complaints that the process was bias towards Amazon because of its single vendor contract approach.[14]
However, the biggest attack against the single cloud vendor approach came in 2018 when Oracle America Inc. submitted a bid protest to the Government Accountability Office (GAO).[15] In its protest, Oracle argued that the DOD’s RFP violated 10 U.S.C. § 2304a(d)(3), which requires an indefinite delivery/indefinite quantity (IDIQ) contract over $112 million to be awarded to multiple vendors.[16] In its decision, GAO denied the protest and concluded that the DOD properly argued that a single vendor contract was in the best interest of the country and in our national security.[17] Oracle then took this argument to the U.S. Court of Federal Claims.[18] The court agreed that there were inconsistencies with the JEDI contract and 10 U.S.C. § 2304a(d)(3)(B);[19]however, the court ultimately denied Oracle’s arguments for prejudicial reasons.[20] Presently, Oracle continues to challenge the procurement process of the JEDI contract and has appealed the U.S. Court of Federal Claim’s decision to the U.S. Court of Appeals for the Federal Circuit.[21]
Oracle’s fight against the JEDI contract procurement process is properly justified as the U.S. Court of Appeals for the Federal Circuit’s decision will undoubtedly set a precedent for either limiting or expanding the power of big tech companies and government related matters. If the U.S. Court of Appeals for the Federal Circuit rules against Oracle’s arguments, it is imperative that the government begin to create a proper oversight structure for big tech companies involved with our nation’s defense and security. Inevitably, big tech companies will become more involved with the military. But it is important to note that over the past few years, the public’s concerns have grown over tech companies’ access to our privacy and personal data.[22] With the tech companies’ growing presence in the country’s defense and national security sectors, having an oversight mechanism can help the government maintain control over these companies and its relationship with government matters. This not only helps regain public trust, but ensures that tech companies do not develop influential power.
[1]Ben Wolfgang, Microsoft tops Amazon, wins Pentagon’s $10 billion ‘JEDI war cloud’ contract, Wash. Times(Oct. 2, 2019), https://www.washingtontimes.com/news/2019/oct/26/microsoft-tops-amazon-wins-pentagons-10-billion-je/
[2]See id. (writing that the decision was stunning because Amazon was the likely frontrunner for the JEDI contract even after public criticism).
[3]See Mike Scarcella, Big Law Government Contracts Lawyers Ready for Battle After Microsoft Snags $10B Pentagon Order, Law.com (Oct. 29, 2019), https://www.law.com/litigationdaily/2019/10/29/big-law-government-contracts-lawyers-prep-after-microsoft-snags-10b-pentagon-order-407-10273/ (noting that Oracle most recently submitted its appeal to the U.S. Court of Appeals for the Federal Circuit).
[4]See Heidi M. Peters, Cong. Research Serv. Insight, The Department of Defense’s JEDI Cloud
Program9 (2019) (detailing that the maximum price for the contract is $10 billion dollars over a ten-year period).
[5]Id. at 8.
[6]Amanda Macias, Pentagon eager to resolve JEDI contract as China races to develop military cloud computing system, CNBC (Aug. 14, 2019), https://www.cnbc.com/2019/08/14/pentagon-eager-to-resolve-jedi-contract-as-china-develops-military-cloud-system.html.
[7]See Heidi M. Peters, Cong. Research Serv. Insight, The DOD’s Jedi Cloud Program2 (2018) (detailing that the base ordering period time frame would begin on April 17, 2019).
[8]See Tom Schatz, A closer look at DOD’s cloudy JEDI contract, Fed. Comput. W.(Aug. 10, 2018), https://fcw.com/articles/2018/08/10/comment-schatz-jedi.aspx (implying that the IT industry has concerns over the JEDI contact seeking a single cloud provider).
[9]See Adam Mazmanian, Under new management, Congress renews JEDI objections, Fed. Comput. W.(May 20, 2019), https://fcw.com/articles/2019/05/20/jedi-cloud-house-approps.aspx (highlighting Congress’ legislative report which argues that DOD is deviating from industry best practices for low costs and comprehensive data innovation).
[10]See Drew Hansen, Congress members urge Trump not to intervene in Pentagon’s $10B cloud contract, Wash. Bus. J.(July 22, 2019), https://www.bizjournals.com/washington/news/2019/07/22/congress-members-urge-trump-not-to-intervene-in.html (detailing President Donald Trump’s announcement that the White House would review the bidding process for the JEDI contract after he received multiple complaints from different tech companies).
[11]See Peters, supra note 8, at 2 (detailing the start date for the JEDI contract as April 17, 2019); see also Andrew Eversden, Amazon or Microsoft? DoD picks a winner for its controversial JEDI contract, fed. times (Oct. 26, 2019), https://www.federaltimes.com/home/2019/10/26/amazon-or-microsoft-dod-picks-a-winner-for-its-controversial-jedi-contract/ (noting that the JEDI contract procurement process has faced months of delays before the contract was finally awarded in October).
[12]See Mark Hensch, 1st Federal Ciso: I’m ‘Very Uncomfortable’ with DOD’s Jedi Cloud, Govloop (Sept. 6, 2019), https://www.govloop.com/1st-federal-ciso-im-very-uncomfortable-with-dods-jedi-cloud/ (reporting that many companies and industry insiders are uncomfortable with DOD asking for a single cloud vendor for the JEDI contract).
[13]Id.
[14]Id.
[15]Oracle America, Inc., B‑416657 et al., (Comp. Gen. Nov. 14, 2018).
[16]Id. at 10.
[17]Id.at 13.
[18]Oracle America, Inc. v. USA., No. 18-1880C (Fed. Cl. July 19, 2019).
[19]Id.at 42.
[20]Id. at 60; see Jared Serbu, Judge says DoD’s JEDI contract violated law on multiple awards,Fed. News Network (July 26, 2019), https://federalnewsnetwork.com/defense-news/2019/07/judge-rules-dods-jedi-contract-violated-law-on-multiple-awards/ (noting that the U.S. Court of Federal Claims agreed with Oracle’s argument that the JEDI contract violated the law, but ruled against Oracle because of prejudicial reasons).
[21]Scarcella, supra note 3.
[22]See Clara Hendrickson & William A. Galston, Big tech threats: Making sense of the backlash against online platforms, The Brookings Institution(May 28, 2019), https://www.brookings.edu/research/big-tech-threats-making-sense-of-the-backlash-against-online-platforms (stating that the public discourse has coarsened because of tech companies’ effect on our democracy).
