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Oracle loses $10bn JEDI contract appeal

Judge argues Oracle would have still lost out on the contract even if Pentagon errors were corrected

A view of Oracle's office building in Silicon Valley, California

A US Court of Appeals has rejected Oracle's challenge over the awarding of a $10 billion Pentagon cloud computing contract to Microsoft in 2019.

The decision affirmed a lower court ruling that Oracle wasn't harmed by any errors made by the Pentagon while creating the contract proposal as the company qualify as a legitimate bidder, as reported by Bloomberg.

Oracle raised a number of complaints, including that the Pentagon violated its own rules when it set up the contract to be awarded to a single firm, arguing that by calling for extensive data centre capabilities it unfairly excluded Oracle from the process.

The company also filed a lawsuit against the Department of Defence (DoD) in December, arguing that there were conflicts of interest between former Pentagon and AWS employees.

However, before any decision on the contract was made, Oracle was removed from the bidding process in April 2020, as it failed to meet the requirement of having three data centres with FedRAMP Moderate 'Authorised' support – which has now been affirmed by the US Court of Appeal.

The panel did suggest that the conflict of interest allegations raised by Oracle were "troubling" but still ruled that it "had no effect on the JEDI Cloud solicitation".

"Notwithstanding the extensive array of claims raised by Oracle, we find no reversible error," circuit judge William Bryson wrote regarding the decision by the US Court of Federal Claims.

Although Microsoft was awarded the $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract in November, work has been on hold following a successful appeal from rival bidder AWS. A Federal Claims judge said that the DoD had improperly evaluated a Microsoft storage price scenario and that the process should be reviewed.

AWS also cited other problems with the bidding, including "political influence" resulting from long-running feud between US President Donald Trump and Amazon CEO Jeff Bezos. These claims are still being weighed up by the courts with a 30-day extension put in place at the end of August.

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