Canada markets closed

Amazon Denies Unfair Advantage in Oracle Challenge of JEDI

Naomi Nix

(Bloomberg) -- Amazon.com Inc. is denying a Pentagon cloud-computing contract valued at as much as $10 billion was unfairly tailored for the e-commerce giant.

In a court filing made public Monday, Amazon countered rival Oracle Corp.’s claims that bidding for the lucrative cloud deal was tainted by relationships between its employees and former Pentagon officials.

Oracle is appealing a July ruling from the U.S. Court of Federal Claims that dismissed its legal challenge of the cloud contract based on claims that the bidding violated procurement law and was marred by conflicts of interest. Amazon Web Services, the company’s cloud unit, has filed a separate lawsuit challenging its loss of the contract known as Joint Enterprise Defense Infrastructure, or JEDI, which was awarded to Microsoft Corp. in October. Amazon claims it lost the bid after interference from the White House and is seeking to interview President Donald Trump in that case.

Oracle’s lawsuit claims that Amazon offered two former Pentagon employees jobs at the company while they were working on the contract. In one case, Deap Ubhi, who had worked at Amazon before joining the government, allegedly helped craft the JEDI procurement for weeks after accepting a job offer in October 2017 from AWS, according to the lawsuit.

Amazon argued that Oracle’s lawsuit is based on “suspicion and innuendo” and that neither employee that Amazon hired disclosed any “competitively useful” information to the company. Government lawyers have also argued in court that the employees’ input on the JEDI procurement was minimal.

Representatives for the Pentagon and Oracle didn’t immediately respond to a request for comment.

The U.S. Court of Federal Claims ruled in July that the Pentagon’s contracting officer properly determined the relationships had no adverse impact on the integrity of the acquisition process and that Oracle didn’t have standing to challenge the contract. The Pentagon eliminated Oracle and International Business Machines Corp. from the competition in April 2019.

Last week a federal judge temporarily blocked Microsoft from working on the Pentagon cloud project while Amazon’s lawsuit is litigated. The Pentagon’s JEDI project is designed to consolidate the department’s cloud computing infrastructure and modernize its technology systems. The contract is worth as much as $10 billion over a decade.

To contact the reporter on this story: Naomi Nix in Washington at nnix1@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Elizabeth Wasserman

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.