Oracle Slams AWS 'Conflicts Of Interest' In JEDI Cloud Lawsuit

Two people that participated in the Pentagon's massive cloud computing contract procurement process had alleged conflicts of interest because of ties to Amazon Web Services, putting Oracle and other rivals at an unfair disadvantage, according to a newly unsealed federal lawsuit filed by the software giant.

Oracle in the lawsuit also questions the “propriety” of the procurement process after obtaining communications in which one of those people called colleagues voicing support for AWS rivals “dum dums.”

Those allegations and many others were levied by Oracle in a lawsuit filed Dec. 6 in the U.S. Court of Federal Claims to challenge the Department of Defense’s RFP process related to its Joint Enterprise Defense Infrastructure (JEDI) cloud contract, worth an estimated $10 billion over 10 years. The lawsuit was unsealed Monday.

The Redwood City, Calif., tech giant alleges that two individuals who helped lead the JEDI project– Deap Ubhi, who served as JEDI project manager at the DoD, and Anthony DeMartino, chief of staff for the Deputy Secretary of Defense – had conflicts of interest because of their relationship with Amazon Web Services. Ubhi had previously worked for AWS, while DeMartino had served as a consultant to AWS prior to being tapped by the DoD, the complaint notes.

[Related story: DoD Gives Six Firms $3.2B In Contracts For Microsoft Products]

An AWS spokesperson declined to comment on the lawsuit.

Ubhi, the lawsuit states, worked at AWS until joining the Defense Digital Service in the summer of 2016. He returned to AWS as general manager in November, 2017. “While engaged in the JEDI Cloud procurement, Ubhi held discussions with AWS regarding AWS buying one of Ubhi’s businesses, and had employment discussions with AWS,” the complaint alleges.

Oracle stated that Ubhi was involved in “highly technical” discussions with JEDI Cloud competitors, including Microsoft and Google, and “drove the single award decision.” At the same time, Oracle claims, Ubhi’s messages on Slack shared with other members of the DDS team were “riddled with inappropriate comments about competitors, DoD personnel and others, raising significant questions about the propriety of this procurement.”

In a series of Slack messages on Oct. 5, 2017, Ubhi allegedly insulted one of the Under Secretary’s deputies, Jane Rathbun, after she referred favorably to Microsoft: “Role playing: I’m Jane R./holy sh[*]t, SaaS is the holy grail, they [Microsoft] do it all for us!” “She compared Office 365 with AWS.” “We’ve got some real dum dums in here, their names usually begin with J…”

Additionally, Oracle said Ubhi allegedly “attacked anyone who took multi-cloud positions or advocated non-AWS solutions.”

Oracle also said a DoD assessment of Ubhi’s alleged conflicts “span less than one page,” did not involve an interview with Ubhi and “failed to identify when or how the Ubhi-AWS business negotiations began,” among other things. A DoD memo though says that Ubhi recused himself from JEDI Cloud dealing in October 2017, when discussions with AWS started. “His access to any JEDI Cloud materials was immediately revoked,” the memo reads.

Meanwhile, according to the complaint, DeMartino, a former AWS consultant, advocated “procurement positions, including single source” and participated in JEDI Cloud meetings — in violation of conflict restrictions of the U.S. code, the code of federal regulations and his executive order ethics pledge.

The DoD Standard Of Conduct Office had warned DeMartino not to get involved in any matter involving AWS without prior approval from the office, the complaint states. But he allegedly ignored the warning and participated in JEDI Cloud discussions for over six months. When he did seek approval, Oracle alleges, the office “directed DeMartino to separate from the JEDI Cloud procurement.”

“The procurement damage from DeMartino’s months of involvement had already occurred,” the complaint states. Oracle wants a full investigation of DeMartino’s involvement before the DoD awards the contract to any company.

With such high stakes involved, “Every ‘i’ should be dotted and ‘t’ should be crossed,” said Michael Goldstein, president and CEO of Fort Lauderdale, Fla.-based solution provider LAN Infotech. “It’s kind of unusual to see this kind of squabbling. It really does show that as you look through this, there’s a better job that needs to be done on the due diligence,” he added.

Oracle has been arguing that the DoD’s JEDI bidding process favors a single cloud vendor—which many in the industry believe would be Amazon Web Services. AWS, the dominant cloud vendor, was awarded a $600 million contract to build the CIA’s private cloud in 2013 and it already has a government-focused GovCloud product. And last year, AWS launched a “secret” cloud service for the CIA and other intelligence services. Amazon also recently announced a significant expansion in Crystal City, Va.—about a mile from the Pentagon.

The lawsuit also highlights other concerns Oracle has with the JEDI Cloud procurement process, including that the DoD issued a single IDIQ contract award determination “in direct violation of the U.S. Code.” The company also claims that three of the RFP’s seven “Gate Criteria” that each bidder must pass in order to compete for the contract exceed the DoD’s needs and violate the Competition In Contracting Act (CICA), to the “significant competitive disadvantage of Oracle.”

Oracle’s lawsuit comes a month after the Government Accountability Office, the federal government watchdog that oversees procurement, tossed out Oracle's protest over the contract.

The DoD issued the original JEDI Cloud RFP on July 26, 2018 and is expected to announce the contract award in April 2019.