US federal judge rejects Oracle's lawsuit over $10 billion Pentagon JEDI cloud contract

Oracle had claimed that $10bn Pentagon mega-cloud contract was biased towards Amazon

A US federal judge has dismissed Oracle's challenge to the Pentagon's JEDI mega-cloud contract, which the software company had argued was rigged in favour of Amazon.

In his ruling, Senior Judge Eric Bruggink said that there was no evidence to prove any sort of bias in the procurement process for Pentagon's $10 billion JEDI contract, and added that Oracle had also failed to prove a conflict in the procurement process.

According to Bloomberg, the judge also ruled that Oracle did not meet the eligibility criteria for the bid and, therefore, it "cannot demonstrate prejudice as a result of other possible errors in the procurement process".

The ruling clears the way for the US Department of Defense (DoD) to offer the contract to either Amazon Web Services or Microsoft Azure next month.

The DoD initiated the Joint Enterprise Defence Infrastructure (JEDI) procurement project in a bid to provide a general-purpose cloud for systems and applications for the US military. By shifting some of its IT into the cloud, the Pentagon wants to be able to use the latest artificial intelligence (AI) technology, offered by both AWS and Microsoft Azure, and to boost its technical skills on the battleground.

However, Oracle complained that the monolithic, winner-takes-all nature of the contract on offer did not represent good value for money for taxpayers, adding that it was therefore designed to benefit the biggest cloud providers - AWS and Microsoft Azure.

Oracle aired its complaints before the requests for proposals for the project were even opened by the DoD last year.

The company went so far as to file a lawsuit in December, alleging that the Pentagon's criteria, as well as it policy to choose just one company as the winner, violated federal procurement laws. Oracle also alleged that the Pentagon's procurement had been marred by conflicts of interest, including ties between Amazon and former DoD officials.

In April, the Pentagon removed Oracle and IBM from the bidding process, leaving Microsoft and Amazon as the final contenders.

Oracle also filed a complaint with the Government Accountability Office (GAO), which ruled that the procurement process didn't favour any specific vendor.

Elissa Smith, DoD's spokeswoman, claimed that the court's decision re-affirmed the Pentagon's position that the procurement process "has been conducted as a fair, full and open competition".

She also revealed that a vendor for the project might be picked as soon as 23rd August.

Oracle has struggled to grow its cloud computing unit as strongly as Microsoft and Amazon, amid claims that the growth in the Oracle cloud in 2017 and 2018 was driven more by threats to existing customers than by genuine organic sales growth.