Oracle presses ahead with Pentagon cloud lawsuit despite Amazon’s contract-bid loss

Oracle is pressing forward with a long-running legal challenge to the Pentagon’s massive cloud computing contract, its third such attempt to upend the procurement since the project was announced 18 months ago.

In an appeal filed recently in the U.S. Court of Appeals for the Federal Circuit, the company accused the Defense Department of improperly limiting competition when it set the terms of the procurement.

Oracle challenged an earlier Pentagon decision to toss its bid, arguing it now meets the minimum requirements. And it doubled down on long-standing accusations that revolving-door hires “corrupted” the process and skewed the playing field in Amazon’s favor. (Amazon founder Jeff Bezos owns the Washington Post.)

Oracle is now seeking an injunction that would block the Defense Department from assigning additional work on the contract.

Oracle’s appeal comes as a surprise to those who followed the company’s lawsuit in the U.S. Court of Federal Claims, which fixated on the idea that Amazon had an unfair advantage. In the end, Amazon lost to Microsoft.

Even so, procurement experts say Oracle may still have a shot at blocking the contract. Steven Schooner, a leading expert in procurement law with George Washington University, said there is “no reason to think that DOD’s award to Microsoft dramatically alters Oracle’s litigation.”

Instead, the Amazon-related conflicts could continue to call into question the Defense Department’s handling of the procurement.

“I could easily see a panel of Federal Circuit judges being sufficiently troubled by the conflicts of interest … and concluding that DOD has to take a step back and more proactively address those concerns before it can proceed,” Schooner said in an email.

Amazon Web Services declined to comment for this report.

The Joint Enterprise Defense Infrastructure contract, known as JEDI, is meant to create an enterprise-wide cloud computing system run by a commercial tech company. The Defense Department’s decision to turn to just one provider for the contract, worth up to $10 billion over 10 years, made it a competitive lightning rod for the handful of giant tech companies jostling for cloud computing market share.

In April, the Pentagon announced Amazon and Microsoft were the only companies capable of meeting the minimum requirements. Initial bids from Oracle and IBM were thrown out.

Amazon Web Services was long seen as the inevitable winner. It is the commercial market leader by far and got a head start in the national security sector due to an earlier $600 million contract with the CIA.

It came as a shock when, late last month, the Defense Department instead awarded the contract to Microsoft. Amazon has not said whether it will protest.

Oracle, whose database business is threatened by the rise of cloud computing, has been working to thwart the Pentagon’s plans since long before the competition started. In court filings and informal lobbying documents, it has accused top officials of conspiring to give Amazon a long-term monopoly on the military’s information-technology infrastructure.