Oracle loses another court battle, but may have already won its campaign against JEDI

Oracle loses another court battle, but may have already won its campaign against JEDI

Although Amazon itself was once again cleared of wrongdoing, the court concluded that two former defense officials “disregarded their ethical responsibilities” by negotiating employment with the e-commerce giant while they worked on JEDI as government officials. And a long-running influence campaign led by Oracle spurred the President’s involvement at a critical moment last summer, people familiar with the matter told The Post at the time.e

The President’s alleged intervention prompted still more litigation and controversy, as a bid protest brought by Amazon has centered on the president’s antipathy towards Bezos, Amazon and the Washington Post. [The Washington Post is owned by Jeff Bezos.]

As result, a military technology project that top defense officials say is critical to America’s artificial-intelligence arms race with China remains bogged down in lawsuits more than two years after it was first announced.

In response to a request for comment, Defense Department spokesman Russ Goemaere pointed out that the courts had once again ruled that “none of the alleged conflicts of interest had an impact on the integrity of the procurement.” Representatives from Oracle and Amazon declined to comment.

Wes Hallman, a vice president for policy with the National Defense Industrial Association, said he is worried that bid protests in general have slowed down the military’s efforts to acquire new technology.

“Delaying this by two years is not the right answer,” Hallman said. “The Chinese are not having this same issue, are they? They are not being hamstrung through any bid protests. Let’s be expeditious about this, because we as a nation need to move on and iterate faster with this great power competition mentality.”

The Joint Enterprise Defense Infrastructure, better known as JEDI, is meant to create a massive, centralized computing system for U.S. military agencies operated by a single tech company. If implemented, it could help lay the groundwork for the military’s eventual use of artificial intelligence to enable weapons systems, intelligence gathering and other pursuits. The contract, which the Pentagon has insisted should go to a single tech company, is worth up to $10 billion over 10 years.

It was awarded to Microsoft in late October following a last-minute intervention by President Trump, who said he asked for an investigation based on “serious complaints” from Microsoft, IBM and Oracle. That sequence of events became the subject of a lengthy investigation from the Defense Department inspector general and a still-pending bid protest lawsuit from Amazon.

In a mark of the contradictions that have come to define JEDI’s chaotic, winding journey, Amazon has technically been in the position of simultaneously opposing and defending JEDI in two parallel bid protests.

As part of Amazon’s lawsuit, the court once again halted progress on JEDI, and the Pentagon asked to revise its award to fix some procurement mistakes it made. It has until Sept. 16 to issue another award.

Oracle, whose database business is threatened by the Defense Department’s broader move to the cloud, was the most vocal among a cadre of companies that resisted JEDI early on. Oracle Chief Executive Safra Catz, one of Trump’s closest allies in the tech world, raised the issue at a dinner with him in April 2018, just a month after the contract was announced, The Post and Bloomberg reported at the time.

An Oracle lobbying document eventually reached the president’s desk, people familiar with the matter told The Post. Sen. Marco Rubio, R-Fla., whose campaign has received donations from Oracle founder Larry Ellison, wrote to the Pentagon and the White House asking that the contract be delayed. Ellison also hosted a fundraising event for Trump’s campaign at his California estate, according to the local newspaper Desert Sun.

Throughout it all, Oracle has pressed on with a bid protest that began more than two years ago, culminating in Wednesday’s appeal decision. It is unclear whether the company can appeal again. An Oracle spokeswoman declined to comment Thursday on whether the company will try to do so.

Oracle brought its first bid protest against JEDI in August 2018, months before bids were due, arguing that giving one company too much control over the military’s information resources was a bad idea. That protest was rejected.

Oracle then pressed its case further in the U.S. Court of Federal Claims, this time taking direct aim at Amazon. It alleged impropriety on the part of several former officials who had business relationships with Amazon.

One of them was Deap Ubhi, a start-up founder whose work on JEDI while he worked at the Defense Department official was book-ended by jobs at Amazon.

Several of Ubhi’s statements cast doubt on his objectivity as he contributed to early procurement documents for JEDI. For example, while he was a public official working on JEDI he tweeted “Once an Amazonian, always an Amazonian” in response to an article about Bezos.

The opinion released Wednesday affirmed an earlier court’s decision that rejected almost all of Oracle’s arguments. The courts concluded that none of the Amazon-linked officials named in Oracle’s lawsuit did enough to corrupt the procurement process itself. And it supported the Defense Department’s decision to limit the award to the market-leaders Amazon and Microsoft, a decision that tossed out Oracle’s bid.

“It is kind of a status quo in government that everything gets protested,” Teresa Carlson, AWS public-sector vice president, said at a conference last year, adding, “which is kind of sad, because it delays innovation.” (Carlson’s comments came before AWS filed its bid protest.)

The court did, however, conclude that Ubhi and another former official had shirked Defense Department ethics rules as they left government to join Amazon. In Ubhi’s case, an earlier court concluded he had lied to both the Defense Department and Amazon about the terms of his departure. The Inspector General reported that it referred the matter to the Justice Department, which declined to prosecute the case.

Mandy Smithberger, director of the Center for Defense Information at the nonprofit Project on Government Oversight, said the experience shows that the Defense Department needs to do a better job of enforcing ethics restrictions.

“It appears in this case the contracting officer assessed those conflicts did not impact the actual award, but it certainly put a cloud of uncertainty and doubt around this program,” Smithberger said.

Steven Schooner, a leading expert in procurement law at George Washington University, said the case actually shows how bid protests can be beneficial if they dig up instances of government malfeasance. (Schooner disclosed that he has previously worked for the Justice Department and for both of the law firms involved in the case, but has no current business relationship with either Amazon or Oracle.)

“Oracle provided a public service, … and here, you could analogize to whistleblowers … by helping expose some of the flaws in the JEDI procurement process that, if not for Oracle’s efforts, might not have come to light,” Schooner said.

Goemaere said the DoD “has a robust ethics program and provides extensive training and tools to educate and assist employees in complying with their ethics requirements,” adding that the Inspector General’s report prompted it to put in place additional ethics training.

Amazon declined to comment on whether Ubhi had been reprimanded in any way, or whether the company has reexamined its hiring or recruiting practices as a result of the controversy.

Ubhi, for his part, seemed to fire back at Oracle in a March 25 tweet, saying: “Oracle and the White House totally deserve each other.”

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