Oracle Corporation had filed a lawsuit on Pentagon’s $10 billion cloud contract in December, and the Federal Court ruled out the case on Friday, which is a massive blow to the technology firm. Oracle has lost the legal challenge in the Federal Claims Court, now allows the US government to award the Pentagon’s cloud contract to its rivals Microsoft or Amazon.com.
Senior Judge of Federal Claims Court, Eric Bruggink rejected allegations of Oracle Company. Oracle believed that the cloud contract breached procurement rules that were designed to protect the competitive process and partially damaged by conflicts of interest.
Bruggink mentioned that Oracle failed to meet the terms and conditions of the bid, “it cannot demonstrate prejudice as a result of other possible errors in the procurement process.”
Back in April, two popular tech companies IBM and Oracle, were eliminated from the competition round. However, Amazon and Microsoft managed to stay in the round. Later Pentagon announced Microsoft and Amazon as the final contenders to win the long decade contract. CEO of Pentagon informed that it hopes to take a final decision by August.
From 2018, Oracle has been objecting the way the bidding process was organized. Oracle raised a question over the decision of Pentagon to offer the cloud contract to only a single firm, instead of dividing the contract among various providers.
The result of the legal battle has greatly disappointed Oracle; this will allow Oracle to lose its federal defense business shares if the Pentagon declares another cloud company as a winner.
Oracle’s Spokeswoman Deborah Hellinger mentioned in a statement, and Oracle looks ahead to work with the Department of Defense, the Intelligence Community, and public sector agencies in order to deploy secure, modern and hyperscale cloud-based solutions that meet their requirements.
Amazon Web Services and the Pentagon were also accused in the case, declined to comment.
However, AWS responded to the matter saying, “it stands ready to support and serve what’s most important — the DoD’s mission of protecting the security of our country. The DoD deserves access to the best technology in the world, and we are unwavering in our support to their mission.”
Department of Defense spokeswoman, Elissa Smith responded to the court ruling, we are happy with the decision of the Federal Claims Court. This affirms the DoD’s status: the procurement process of JEDI Cloud has been organized honestly, open and full competition, which was carried out by the contracting officers and her team members and was accordance to the law.
DoD urgently requires to position the critical capabilities in place so as to assist the warfighter, and there are several Combatant Commands and military services awaiting to access JEDI.
Shares of the Oracle were down by 1 percent at 10:51 am in New York.
Defense Department still has important obstacles in order to carry the bidding process forward. Microsoft or Amazon can either appeal the contract challenge with Government Accountability officer or in the US Court of Federal Claims if they lost. Oracle might think of appealing over the court decision in the Court of Appeals.