The JEDI Cloud Solicitation

Why this multi-billion dollar challenge failed?

JEDI Cloud Solicitation - Why this multi-billion dollar challenge failed.

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Despite Oracle's pre-bid protests, their efforts failed.

Last week, the Federal Circuit rejected a protest filed by Oracle that challenged the legality of the multi-billion dollar Defense Department JEDI Cloud solicitation.  An overview of the key issues follows.

THE SOLICITATION

The DOD issued a solicitation known as the Joint Enterprise Defense Infrastructure (JEDI) Cloud procurement.  The solicitation contemplated a single award for a ten-year IDIQ contract for the provision of enterprise-wide cloud computing services.

The solicitation included several “gate” provisions that bidders needed to satisfy.  The primary gate in issue here was Gate 1.2, which required that a contractor have at least three existing physical commercial cloud offering data centers within the United States, each separated by at least 150 miles. These data centers were required to provide certain offerings that were “FedRAMP Moderate Authorized” — a designation given to systems that had successfully completed a government approved authorization process providing a minimum security level for processing or storing the Department’s least sensitive information.

THE PROTEST CHALLENGE

As of the date that proposals were due, Oracle could not meet the Gate 1.2 requirement.  Oracle filed a pre-bid protest with the GAO challenging the government’s inclusion of Gate 1.2 in the solicitation.  It also challenged the legality of awarding the contract on a single-award basis.  The GAO denied the protest, and Oracle filed suit in the Court of Federal Claims.  The court also denied the protest, and Oracle took this appeal to the Federal Circuit.

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THE FEDERAL CIRCUIT’S RULING

In addressing the issues raised by Oracle, the Court ruled as follows:

  • Although Oracle correctly asserted that the government invoked a legal ground to support use of a single award that was not consistent with the terms and conditions of the solicitation, this was harmless error and did not prejudice Oracle.  The Court concluded that even if this error required the government to make multiple awards, Oracle had no chance of obtaining any of them because it was unable to meet the Gate 1.2 requirement.
  • The solicitation’s use of competitive procedures was consistent with law, and DOD’s use of Gate 1.2 was not unduly restrictive of competition.
  •  Gate 1.2 was not a “qualification requirement” requiring government justification; rather it was an intrinsic requirement meant to ensure that bidders would be able to meet the government’s needs under the solicitation.
  •  Oracle correctly asserted certain conflicts of interest of former DOD employees, but these conflicts did not taint the procurement.

POSTSCRIPT

The Court’s denial of this protest did not end the legal wrangling over this procurement. After DOD issued award to Microsoft, Amazon Web Services filed a protest at the Claims Court challenging the source-selection. This case is still pending before the court.  Stay tuned for further developments!

About the Author
Jack Delman

Hon. Jack Delman served as a judge on the Armed Services Board of Contract Appeals for 29 years and has extensive experience in the adjudication and mediation of large and complex contract disputes, including equitable adjustments, terminations and cost and pricing issues.

 
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