Court rules Pentagon can award $10B ‘war cloud’ contract later this summer

A federal judge ruled on Friday that the Department of Defense (DOD) can move forward with its plan to award a $10 billion “war cloud” contract later this summer, which will be likely given to either Amazon or Microsoft, knocking down a legal challenge by cloud-computing competitor Oracle.

The U.S. Court of Federal Claims opinion, written by Senior Judge Eric Bruggink, denied Oracle’s claims that the Pentagon created the contract specifically with Amazon in mind or that there were conflicts of interest between Amazon’s cloud-computing service, Amazon Web Services (AWS), and the DOD.

{mosads}Bruggink said Oracle “cannot demonstrate prejudice” against itself in the Joint Enterprise Defense Infrastructure (JEDI) contract process.

“We conclude as well that the contracting officer’s findings that an organizational conflict of interest does not exist and that individual conflicts of interest did not impact the procurement were not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” the opinion states.

The highly anticipated decision paves the way to allow the Pentagon to award JEDI to either AWS or Microsoft’s cloud-computing service, Azure, likely by August.

Amazon and Microsoft are now the top contenders for the contract, which requires a high-level security clearance and enormous technical capabilities that most other cloud-computing services cannot offer.

“AWS, along with our partner community, stands ready to support and serve what’s most important — the DoD’s mission of protecting the security of our country,” an AWS spokesperson said in a statement on Friday. “The DoD deserves access to the best technology in the world and we are unwavering in our support to their mission.”

Oracle has claimed that the contract process was biased against them from the outset, saying the security specifications opened the door for only AWS. AWS and the DOD have aggressively beat back those claims, saying Oracle’s cloud-computing service simply didn’t meet the necessary security criteria.

“Oracle’s cloud infrastructure 2.0 provides significant performance and security capabilities over legacy cloud providers,” an Oracle spokeswoman said in a statement after the DOD v. Oracle decision emerged on Friday. “We look forward to working with the Department of Defense, the Intelligence Community, and other public sector agencies to deploy modern, secure hyperscale cloud solutions that meet their needs.”

Government investigations have determined that conflicts of interest did not feature in the procurement process.

But multiple Republican lawmakers and groups have raised concerns that the JEDI contract was built specifically with AWS in mind, raising concerns over market competition and unfair treatment.