Amazon, Microsoft Favoritism Remains, Oracle Tells High Court

Sept. 20, 2021, 2:10 PM

Oracle America Inc. told the U.S. Supreme Court that its cloud computing dispute with the Department of Defense isn’t moot despite cancellation of the JEDI contract because DOD admitted it will favor rivals Amazon and Microsoft in a new procurement.

Oracle filed a petition in January asking the court to review its claims that the DOD’s single-award approach was improper and the procurement was tainted with conflicts of interest. The government Sept. 8 said the petition should be denied because of DOD’s July 6 procurement cancellation and Sept. 1 termination of Microsoft’s contract award.

But DOD’s new multiple-award procurement called Joint Warfighting Cloud Capability isn’t likely to involve open competition in a way that would address prior deficiencies, Oracle asserted in a Sept. 17 supplemental brief.

A defendant must show it is absolutely clear that allegedly wrongful behavior couldn’t reasonably be expected to recur for a court to lose jurisdiction over a case, Oracle said.

DOD took the “highly unusual step of declaring (at least presumptively) that JWCC will involve ‘multiple'-award competition only in the sense that the Department has pre-selected two particular cloud providers as the winners,” Oracle said.

Other competitors will be excluded based on security requirements like those used to exclude Oracle from consideration in JEDI, Oracle said.

Oracle also said the government hasn’t shown that JWCC will be untainted from the conflicts of interest that occurred in the JEDI procurement.

If JWCC’s requirements are based on the research of an Amazon employee who worked on JEDI while employed with DOD, the department will have perpetuated conflicts, not remedied them, Oracle said.

Oracle, Amazon, IBM, and Microsoft submitted bids for the JEDI contract. DOD eliminated Oracle’s bid for failing to satisfy cloud capacity requirements, and Oracle protested.

The U.S. Court of Federal Claims rejected the protest in July 2019, ruling that Oracle didn’t meet the criteria for the bid and couldn’t demonstrate prejudice from possible errors.

The Federal Circuit affirmed in September 2020.

DOD awarded the contract to Microsoft in October 2019 and Amazon protested at the claims court. The DOD agreed to reconsider a portion of its award decision but then affirmed the award to Microsoft.

The claims court dismissed Amazon’s protest as moot July 8 after the JEDI cancellation.

Arnold & Porter Kaye Scholer LLP represented Oracle.

The case is Oracle Am. Inc. v. United States, U.S., No. 20-1057, 9/17/21.

To contact the reporter on this story: Daniel Seiden in Washington at dseiden@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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