Oracle claims that Amazon tried to woo Pentagon officials with 'undisclosed employment and bonus offers' to win a $10 billion cloud contract, but Amazon says it's a 'desperate attempt to smear the company'
- The battle for the $10 billion Defense Department JEDI contract escalated after Oracle accused Amazon of making "undisclosed employment and bonus offers to Pentagon staff" in an amended lawsuit.
- Amazon Web Services called Oracle's claim "wildly misleading and a desperate attempt to smear the company by distorting the facts."
- Amazon is considered the favorite to win the deal, which will be awarded this summer. Oracle and IBM were eliminated from the process in April, with Amazon and Microsoft still in the running.
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The battle for the Pentagon's JEDI cloud contract is heating up.
The competition for the $10 billion U.S. Department of Defense contract for the planned Joint Enterprise Defense Infrastructure (JEDI) project has sparked a heated tit-for-tat between Oracle, which has been eliminated from the bidding process, and Amazon, considered the leading contender to win the deal.
At stake is the opportunity to build a major cloud computing platform that will store and manage sensitive military and defense data. Last month, the Defense Department narrowed down the main contenders to Amazon and Microsoft, eliminating Oracle and IBM.
But Oracle refused to back down, and filed a lawsuit challenging the Pentagon's decision.
The tech giant escalated its legal offensive last week when it accused Amazon of offering jobs and bonuses to Defense Department staff involved in evaluating the contract bids, in an amended lawsuit filing.
"JEDI is riddled with improprieties," the amended Oracle suit, filed last week, said. "AWS made undisclosed employment and bonus offers to at least two DoD (Dept. of Defense) JEDI officials."
Amazon Web Services tells Business Insider that Oracle's amended complaint is "wildly misleading and a desperate attempt to smear the company by distorting the facts." But the company declined to comment in detail on the filing because it involves pending litigation.
The Department of Defense does not comment on pending litigation, spokesperson Elissa Smith told Business Insider.
As the Federal News Network notes, the Defense Department addressed some of Oracle's claims in a January filing opposing Oracle's discovery motion.
Oracle's suggestion that two Pentagon staff would have maneuvered the process toward Amazon, the Defense Department said at the time, was "illogical." It also accused Oracle of seeking "to engage in a broad fishing expedition primarily to find support for its claim that the solicitation at issue is tainted by alleged conflicts of interest."
$10 billion at stake
The heated back and forth is not surprising given what's at stake, analysts say.
"This is the largest contract in the history of cloud computing," Constellation Research analyst Ray Wang told Business Insider.
Referring to Amazon CEO Jeff Bezos and Oracle founder and Chief Technology Officer Larry Ellison, he added: "The rivalry between Bezos and Ellison is legendary," Wang said. "I can imagine with the dollars at stake, how Oracle feels that there may be some misappropriate behavior in how they were eliminated."
Wedbush analyst Steve Koenig says Oracle faces a tough road ahead in its bid for the JEDI contract.
"Oracle is far behind AWS and [Microsoft's] Azure as it seeks to establish itself in the cloud infrastructure and platform market, and has a steep uphill climb ahead," he told Business Insider. "It's not clear that Oracle will ever get a piece of the JEDI action - even if the procurement approach is reassessed. However, Oracle has smart lawyers and the cases it pursues often have merit. So at a minimum, Oracle's lawsuit probably throws some sand in the wheels of the JEDI process."
The Department of Defense is expected to award the JEDI contract in mid-July.
Read Oracle's full lawsuit filing below:
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Oracle Amended Jedi by Ben Pimentel on Scribd