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Oracle to Appeal Court Ruling Upholding Pentagon Cloud Contract

Naomi Nix

(Bloomberg) -- Oracle Corp. said it plans to appeal a court ruling that dismissed its legal challenge of the Pentagon’s cloud-computing contract, a project valued at as much as $10 billion.

Oracle contended in its lawsuit, which was dismissed in July, that the Joint Enterprise Defense Infrastructure, or JEDI, contract violated federal procurement laws and was unfairly compromised by personal relationships between former Pentagon officials and competitor Amazon.com Inc.

Federal Claims Court Senior Judge Eric Bruggink ruled that Oracle didn’t meet the criteria for the bid and thus didn’t have the legal standing to challenge the terms of the procurement process.

Oracle General Counsel Dorian Daley said in a statement Monday that the ruling acknowledged the procurement suffered from “significant conflicts of interest” and that federal law bars single-award contracts without proper justifications.

“The Court of Federal Claims opinion in the JEDI bid protest describes the JEDI procurement as unlawful, notwithstanding dismissal of the protest solely on the legal technicality of Oracle’s purported lack of standing,” Daley said. “As a threshold matter, we believe that the determination of no standing is wrong as a matter of law, and the very analysis in the opinion compels a determination that the procurement was unlawful on several grounds.”

The appeal is being filed in the U.S. Court of Appeals for the Federal Circuit, according to a legal notice by Oracle.

In April, the Pentagon eliminated Oracle and International Business Machines Corp. from the competition for the contract, leaving Amazon and Microsoft Corp. as the final contenders. New Defense Secretary Mark Esper has opened a review of the contract.

President Donald Trump has openly questioned whether the pending contract is being competitively bid. “I’m getting tremendous complaints about the contract with the Pentagon and with Amazon,” he told reporters last month. Trump has often attacked Amazon founder Jeff Bezos, who also owns the Washington Post. Amazon and Microsoft Corp. are the only bidders that haven’t been eliminated.

(Updates with court where appeal is being filed in sixth paragraph.)

To contact the reporter on this story: Naomi Nix in Washington at nnix1@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Mark Niquette, Larry Liebert

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