Oracle America, Inc. v. United States ( 2019 )

In the United States Court of Federal Claims
No. 18-1880C
(Filed: July 19, 2019)
(Re-Filed: July 26, 2019) 1
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ORACLE AMERICA, INC.,
Plaintiff,
Pre-award bid protest; 10
v. U.S.C. § 2304a(d)(3)-(4)
(2012); 48 C.F.R. §
THE UNITED STATES, 16.504(c) (2018); single
award determination;
Defendant, gate criteria; qualification
requirement; individual
and conflict of interest;
organizational conflict of
AMAZON WEB SERVICES, INC., interest.
Intervenor.
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Craig A. Holman, Washington, DC, for plaintiff. Kara L. Daniels,
Dana E. Koffman, Amanda J. Sherwood, and Nathaniel E. Castellano, of
counsel.
William P. Rayel, Senior Trial Counsel, United States Department of
Justice, Civil Division, Commercial Litigation Branch, Washington, DC,
with whom were Joseph H. Hunt, Assistant Attorney General, Robert E.
Kirschman, Jr., Director, Patricia M. McCarthy, Assistant Director, for
defendant. Christina M. Austin and Andrew Bramnick, Washington
1
This opinion was originally issued under seal to permit the parties an
opportunity to propose redactions by July 25, 2019. The government and
intervenor proposed two redactions; plaintiff opposed one. Because both
proposed redactions address protected information, the court adopts both.
The parties also identified several possible clerical mistakes or omissions; to
the extent we agree that they were clerical mistakes or omissions, and not
substantive changes, we corrected them. RCFC 60(a).
Headquarters Service & Pentagon Force Protection Agency, United States
Department of Defense, Office of General Counsel, of counsel.
Daniel R. Forman, Washington, DC, for intervenor. Robert J.
Sneckenberg, Olivia L. Lynch, James G. Peyster, Christian N. Curran, and
Gabrielle Trujillo, of counsel.
_________
OPINION
_________
BRUGGINK, Judge.
This protest involves the Department of Defense’s (“DoD”) Joint
Enterprise Defense Infrastructure (“JEDI”) Cloud procurement. In the JEDI
Cloud procurement, DoD is seeking an enterprise cloud services solution that
will accelerate DoD’s adoption of cloud computing technology. Oracle
America, Inc. (“Oracle”) initially filed this as a pre-award bid protest on
December 6, 2018. After it was excluded from the competition during the
protest and DoD completed several conflicts of interest determinations,
Oracle amended its complaint. It currently has three primary challenges.
First, it argues that the decision to use a single award as opposed to multiple
awards was a violation of law. This argument has two components because
the decision to use a single award had to be made both by an Under Secretary
of Defense and independently by the contracting officer (“CO”). Second, it
argues that the use of certain gate criteria, the application of which led to
Oracle’s exclusion, were improper for various reasons. Third, it contends
that conflicts of interest on the part of DoD employees and Amazon Web
Services, Inc. (“AWS”), one of the other bidders, prejudicially affected the
procurement. AWS has intervened.
The parties filed cross-motions for judgment on the administrative
record. The matter is fully briefed, and we held oral argument on July 10,
2019. As stated in the court’s July 12, 2019 order, because we find that Gate
Criteria 1.2 is enforceable, and Oracle concedes that it could not meet that
criteria at the time of proposal submission, we conclude that it cannot
demonstrate prejudice even if the procurement was otherwise flawed.
Plaintiff’s motion for judgment on the administrative record is therefore
denied. Defendant’s and intervenor’s respective cross-motions for judgment
on the administrative record are granted.
2
One feature of the protest makes resolution somewhat awkward.
Although we ultimately conclude that Gate Criteria 1.2 is enforceable and
thus a comprehensive answer to all of plaintiff’s arguments, it is necessary
to provide a virtually complete recitation of the facts and arguments because
Oracle contends that two of the asserted errors—the decisions adopting a
single award approach and the conflict of interest determinations—
influenced the formulation of Gate Criteria 1.2. The critical question as to
those two arguments, therefore, is whether, if Oracle is correct on the merits,
they impacted the formulation of the criteria on which Oracle concedes it
fails. We ultimately conclude that they did not taint the formulation of that
criteria or other aspects of the solicitation.
BACKGROUND
DoD is ready to adopt an enterprise cloud services solution. 2 It plans
to award the vast majority of DoD’s cloud services business to a single
vendor. Although DoD has been developing the JEDI Cloud procurement
for several years, we enter the development timeline in August 2017, when
the Secretary of Defense traveled to Seattle, Washington, and Palo Alto,
California, to visit cloud services companies. Administrative Record (“AR”)
Tab 91 at 5955.
Following this trip, Deputy Secretary of Defense Patrick Shanahan
sent a memorandum on September 13, 2017, to the secretaries of the military
departments. He emphasized that certain technologies “are [1] changing the
character of war; (2) commercial companies are pioneering technologies in
these areas; [and] (3) the pace of innovation is extremely rapid.” Id. The
Deputy Secretary concluded that “accelerating [DoD’s] adoption of cloud
computing technologies is critical to maintain our military’s technological
2
The agency defines “cloud” as “[t]he practice of pooling physical servers
and using them to provide services that can be rapidly provisioned with
minimal effort and time, often over the Internet.” Administrative Record
(“AR”) Tab 25 at 478. The agency explains, “The term is applied to a variety
of different technologies (often without clarifying modifiers), but, for the
purpose of this document, cloud refers to physical computing and storage
resources pooled to provide virtual computing, storage, or higher-level
services.” DoD explains that “commercial cloud means that a commercial
cloud service provider is maintaining, operating, and managing the
computing, networking, and storage resources that are being made available
to customers. Depending on the contract, the commercial cloud service
provider may be performing in commercial facilities or on premises.” Id.
3
advantage.” Id. He explained that the adoption of cloud computing
technology was “a Department priority” in which “[s]peed and security are
of the essence.” AR 5956. His memo went on to broadly outline the steps to
set the JEDI Cloud procurement in motion.
To devise a strategy to accelerate the adoption of cloud services, the
Deputy Secretary established the Cloud Executive Steering Group. The
group would brief the Deputy Secretary on a bi-weekly basis on progress
toward adoption of cloud computing technology. The Cloud Executive
Steering Group consisted of Chair Ellen Lord, Under Secretary of Defense
for Acquisition, Technology, and Logistics; Director Chris Lynch, Defense
Digital Service; Director Will Roper, Strategic Capabilities Office;
Managing Partner Raj Shah, Defense Innovation Unit Experimental;
Executive Director Joshua Marcuse, Defense Innovation Board; and advisor
John Bergin, DoD Chief Information Officer Business Technology Office.
Adoption of an enterprise cloud would proceed in two phases. First,
DoD would use “a tailored acquisition process to acquire a modern enterprise
cloud services solution that can support unclassified, secret, and top secret
information.” Id. The Deputy Secretary tasked the Defense Digital Service,
under Mr. Lynch, with leading phase one. The Defense Digital Service is a
team within DoD’s United States Digital Service. Members of Defense
Digital Service dedicated to the JEDI Cloud procurement at that time
included Mr. Lynch, legal counsel Sharon Woods, industry specialist Deap
Ubhi, Deputy Director Timothy Van Name, and engineer Jordan Kasper. In
the second phase, the Cloud Executive Steering Group would “rapidly
transition select DoD Components or agencies to the acquired cloud
solution,” using cloud services as extensively as possible. Id.
Early Commitment to a Single Award and Tailored Acquisition Plan
The Cloud Executive Steering Group held a meeting the day after the
Deputy Secretary issued his memo. 3 AR Tab 86. In attendance were Mr.
Lynch; Ms. Woods; a Defense Digital Service engineer; Mr. Ubhi; two
representatives from the Strategic Capabilities Office; Mr. Shah; Mr.
Marcuse; and a “C3 cyber and business systems AT&L” representative. AR
5927. The meeting notes record that Mr. Lynch stated “[o]ver time there
ha[ve] been considerable changes to the tech world outside of the DoD that
are so fundamental that they are now serious constraints on delivering the
3
The government’s AR index states this meeting occurred on September 14,
2017. The meeting notes do not state the date of the meeting.
4
mission of defense.” Id. Mr. Lynch further noted, “If we feel uncomfortable
moving forward, then we are probably headed in the right direction.” Id.
The group noted that “Sec Def/ DSD is afraid of vendor lock in.” AR 5928.
The notes include the following comment: “Avoid specifying that
there is a single vendor. This will create perception issues with vendors
already in use.” Id. This suggests that, from the beginning, the expectation
was that there would be a single award.
The Cloud Executive Steering Group met again on September 28,
2017, and discussed when the problem statement draft, RFI, Business Case
Analysis, and RFP would be developed. AR Tab 87. The meeting notes
read: “Questions and inquiries form [sic] industry should be directed to Deap
[Ubhi].” AR 5932. Procurement documents, such as the ones discussed at
this meeting, were developed and stored in a Google Drive accessible by
certain DoD personnel, including the Cloud Executive Steering Group and
Defense Digital Service team.
In between meetings, members of the Defense Digital Service
discussed the progress of the JEDI Cloud project on the agency’s internal
communication medium, Slack. 4 During this period, Defense Digital Service
members discussed what to include in the problem statement. For instance,
on October 2, 2017, they discussed whether “metrics” should be included in
the problem statement or if they were too difficult to articulate at that point.
Ms. Woods wrote, “Let me put the metrics in this context. The agreed upon
measures drive what acquisition strategy will be approved. So, if multiple
cloud providers can meet the metrics, then we don’t get to one. The metrics
drive how we solve the problem.” AR 3123.
The “Draft Problem Statement” was complete October 3, 2017. The
draft explained that DoD’s “current computing and storage infrastructure
environment and approach . . . is too federated, too slow, and too
uncoordinated to enable the military to rapidly utilize DoD’s vast
information to make critical, data driven decisions.” AR 60089. DoD
4
“Slack is a communication tool utilized by [the Defense Digital Service],
and other authorized collaborators, to facilitate timely communication and
coordination of work activities . . . . Slack channels are comprised of distinct
groups of Slack users and are organized by purpose.” AR Tab 221 at 58699.
The government provided an index of user names and the message
timestamps can be converted using an epoch time converter.
5
envisioned acquiring services that “seamlessly extend[] from the homefront
to the tactical edge.” 5 Id. The authors concluded that DoD “cannot achieve
this vision without a coordinated enterprise approach that does not simply
repeat past initiatives.” Id. The document repeated the ills of fragmented
infrastructure in nearly every paragraph.
On October 5, 2017, the Cloud Executive Steering Group convened
6
again. According to the meeting notes, Under Secretary Lord explained that
more than “600 cloud initiatives across” DoD currently exist and that the
“cloud initiative is about implementing an enterprise approach rather than an
uncoordinated eclectic approach that has resulted in pockets of cloud
adoption.” AR 5933. Mr. Lynch contributed: “[a] [s]ingle cloud solution [is]
necessary for this enterprise initiative to be successful and allow DoD to
achieve its mission objectives with cloud adoption.” AR 5934.
Slack messages among the Defense Digital Service team members
refer to a late October 2017 Cloud Executive Steering Group meeting at
which Mr. Ubhi, along with others, argued for a single award approach. AR
60100, 60229. The messages suggest that attendees either already favored a
single award or were persuaded at the meeting.
On October 27, 2017, Defense Digital Service’s Mr. Kasper sent the
Deputy Secretary a two-page update on the DoD Cloud efforts and the draft
Request for Information (“RFI”). AR Tab 51. Under “Acquisition Strategy
Approach,” the update anticipated an Indefinite Delivery, Indefinite Quantity
(“IDIQ”) contract and “[f]irm-fixed pricing with commercial catalog.” AR
4324. On “Single versus Multiple Providers,” the update stated: “General
consensus is that we should press forward with a single provider approach
for now . . . The [Cloud Executive Steering Group] acquisition strategy is
focusing on a single-award.” AR 4325. The primary reasoning for a single
rather than multiple award was “reduced complexity, ensuring security of
information to the greatest degree possible, ease of use and limited barriers
to entry, virtual private cloud-to-virtual private cloud peering, and seamless,
5
DoD defines tactical edge as “[e]nvironments covering the full range of
military operations, including, but not limited to forces deployed in support
of a Geographic Combatant Commander or applicable training exercises, on
various platforms . . . and with the ability to operate in austere and
connectivity-deprived environments.” AR Tab 25 at 479.
6
The principal attendees were: Under Secretary Lord; Mr. Bergin; Mr.
Lynch; Mr. Shah; Mr. Marcuse; and Dr. Roper. The notes list Ms. Woods
among additional participants.
6
secure sharing of data across the enterprise through cloud peering.” Id.
Development of the Tailored Solicitation Approach and Needs
DoD issued an RFI to the commercial world on October 30, 2017,
inquiring into available cloud computing services. DoD emphasized its need
to rely on “the cloud provider(s)” for all levels of data classification from the
homefront to the tactical edge. AR 5936. Among other items, DoD asked
for information about responders’ third-party marketplace, failover and data
replication architecture, ability to operate “at the edge of connectivity,” and
for an example of “a large commercial customer with worldwide presence
that has migrated to your infrastructure and platform services.” AR 5937-38.
Before DoD received responses, it completed a summary of the JEDI
Cloud procurement effort to date on November 6, 2017. This included an
“Acquisition Strategy” description: “Single-award [IDIQ] contract using full
and open competitive procedures. A single Cloud Service Provider (CSP) to
deliver services for cloud computing infrastructure and platform services.
Up to ten-year ordering period.” AR 5957.
The agency received RFI responses on November 17, 2017. Many
responders questioned whether a single award would offer the best cost
model, whether one vendor could possibly be the leader in all areas, and
whether a single vendor would devalue investment made by existing vendors.
Oracle argued that a single award would stifle adoption of market-driven
innovation. Microsoft concurred: “DoD’s mission is better served through a
multi-vendor cloud approach,” because “competition drives innovation,” and
offers “greater flexibility.” AR 1545. Microsoft urged DoD to preserve its
flexibility and agility to adopt the latest cloud technology and to avoid “a
single point of failure.” Id. IBM likewise responded: “Limiting the DoD to
a single cloud provider will negatively impact DoD’s source access to
innovative cloud offerings and increase risk of deployment failure.” AR
1983. Google argued that DoD must not become “beholden to monolithic
solutions or single cloud providers.” AR 1924.
AWS, on the other hand, argued that, although multiple awards might
decrease the likelihood of protests, a single award would increase
consistency, interoperability, and ease of maintenance. AWS posited that
commercial parity requirements would guarantee innovation. AWS was not
alone in noting that single awards had been used in the past and that they
might offer advantages.
7
On December 22, 2017, the Joint Requirements Oversight Council
issued a memo to twenty-two DoD stakeholders to address “Joint
Characteristics and Considerations for Accelerating to Cloud Architectures
and Services.” AR Tab 17. The council “accept[ed] the Defense Digital
Service cloud brief” and acknowledged that “accelerating to the cloud [is]
critical in creating a global, resilient, and secure information environment
that enables warfighting and mission command.” AR 321. The memo
repeated DoD’s expectations: data exchange across all classification levels
and DoD components; an environment that is scalable and elastic; security
from persistent adversary threats; use to the tactical edge; and industry-
standard high availability.
The memo identified “cloud characteristics and elements of particular
importance to warfighting missions.” AR 323. Those characteristics were:
cloud resiliency without a single point of failure, support of DoD’s cyber
defenses, enabling cyber defenders, and role-based training. The attached
presentation referred to a single “cloud provider.” AR 330.
On January 8, 2018, Deputy Secretary Shanahan circulated a
memorandum to the secretaries of the military departments providing an
“Accelerating Enterprise Cloud Adoption Update.” AR Tab 94. This memo
stated that the Cloud Executive Steering Group had provided
recommendations as requested and that “the Deputy Chief Management
Officer (DCMO), in partnership with Cost Assessment and Program
Evaluation, Chief Information Officer, and Defense Digital Service, [would
now] take the lead in implementing the initial acquisition strategy.” AR 5978.
The memo also directed the Deputy Chief Management Officer to establish
a Cloud Computing Program Manager. The Deputy Secretary directed the
Deputy Chief Management Officer and the Chief Information Officer to
work with “the Services; the Under Secretary of Defense for Intelligence;
and the Under Secretary of Defense for Acquisition, Technology, and
Logistics to build cloud strategies for requirements related to military
operations and intelligence support.” Id.
Three months later, DoD released the first draft RFP and held an
industry day on March 7, 2018. DoD provided the draft RFP for “early and
frequent exposure to industry of the Department’s evolving requirement.”
AR 5995. DoD anticipated awarding a single award IDIQ that would issue
firm fixed-price task orders. DoD would seek Infrastructure as a Service
(“IaaS”) and Platform as a Service (“PaaS”).
IaaS is “[t]he capability provided to the consumer to provision
8
processing, storage, networks, and other fundamental computing resources
where the consumer is able to deploy and run arbitrary software, which can
include operating systems and applications.” AR Tab 25 at 478. DoD
explained, “The consumer does not manage or control the underlying cloud
infrastructure but has control over operating systems, storage, deployed
applications, and possibly limited control of select networking components
(e.g., host firewalls).” Id.
PaaS is “[t]he capability provided through software, on top of an IaaS
solution, that allows the consumer to replicate, scale, host, and secure
consumer created or acquired applications on the cloud infrastructure.” AR
479. As with IaaS, DoD explained, “The consumer does not manage or
control the underlying cloud infrastructure including network, servers,
operating systems, or storage, but has control over the deployed applications
and possibly application hosting environment configurations.” Id.
The draft included a specially crafted “New Services” clause,
providing that “DoD may acquire new products and/or services from the
contractor for capabilities not currently provided in the Cloud Services
Catalog Price List under this contract.” AR 6013. The draft also introduced
the concept of Factor 1 Gate Criteria, a number of metrics which offerors
would have to meet to advance to consideration of other factors. Three of
the criteria are at issue in this protest. Gate Criteria 1.1 required the offeror
to “provid[e] a summary report for the months of January and February 2018
that depicts each of the four metric areas detailed below.” AR 6083. Gate
Criteria 1.2 required the offeror to have no fewer than three physical,
unclassified data center locations at least 150 miles apart and to document
network availability. An additional criteria (later numbered 1.6) required the
offeror to provide a marketplace for both native and third-party programs.
On March 27, 2018, the Cloud Computing Program Office completed
its Market Research Report, which DoD used to “inform the overall
acquisition strategy.” AR 366. Market research included vendor meetings
held from October 12, 2017 to January 26, 2018, focus sessions within DoD
and with industry leaders, intelligence community meetings, and the RFI.
The Cloud Computing Program Office found that “market research
indicate[s] that multiple sources are capable of satisfying DoD’s
requirements for JEDI Cloud.” Id. The office found, however, that “[o]nly a
few companies have the existing infrastructure—in both scale and modernity
of processes—to support DoD mission requirements, worldwide.” AR 369.
The office concluded that “[i]f the JEDI Cloud contract is sufficiently
9
flexible and requires maintaining technical parity with commercial
solutions,” DoD would be able to apply cloud solutions to the tactical edge.
AR 366. The office also found that providers’ information security and
ability to operate in disconnected environments were still growing and that a
“robust, self-service marketplace” is “essential.” AR 369. The office found
that the responses did not clearly demonstrate how multiple clouds benefitted
the agency’s security needs.
The Cloud Computing Program Office completed the Business Case
Analysis on April 11, 2018. The summary provides that the Business Case
Analysis, Acquisition Strategy, Statement of Objectives, and Cybersecurity
Plan form the foundation of the procurement. The problem statement
indicated that DoD’s operations are hampered by fragmented, outdated
computing and storage infrastructure; tedious, manual management
processes; and lack of interoperability, seamless systems, standardization,
and automation. “In short, DoD’s current computing and storage
infrastructure critically fails DoD’s mission and business needs.” AR 403.
This gloomy assessment led to eight objectives: available and resilient
services; global accessibility; centralized management and distributed
control; ease of use; commercial parity; modern and elastic computing;
storage; and network infrastructure, fortified security, and advanced data
analytics.
The office turned to available alternatives. The analysis of
alternatives was “based on outcomes when the overarching goal is for JEDI
Cloud to host 80% of all DoD applications that currently reside in DoD on-
prem[ise] centers, existing cloud offerings, and legacy systems.” AR 405.
The office assumed that the solution required “significant transformation,”
because “DoD needs to extricate itself from the business of installing,
managing, and operating data centers.” AR 406. The office also assumed that
a high degree of integration is necessary and using multiple vendors would
increase complexity and cost.
Four alternatives were considered: DoD retaining 80% of the
workload; DoD splitting its workload with JEDI Cloud; a single JEDI Cloud
provider managing 80% of the workload; and multiple JEDI Cloud providers
splitting 80% of the workload. The office concluded that a single JEDI Cloud
provider would fulfill seven of the eight objectives and partially fulfill the
global accessibility objective. Multiple JEDI Cloud providers, on the other
hand, would meet only four objectives and partially meet four objectives.
The DoD-focused options all failed at least one objective.
10
The office did not see any disadvantage to adopting a single JEDI
Cloud provider approach. It found that global accessibility is problematic in
any scenario because the technology is evolving. This section concluded:
“There are significant overlaps in the commercial cloud services offered by
the various providers, such that any provider selected will meet the majority
of Department needs.” AR 410.
The office acknowledged that DoD would “benefit from the
commercial parity, investment, innovation, and technical evolution of
commercial cloud offerings driven by industry, and additional commercial
service offerings [that] will be made available” if it chose a multiple award
approach. AR 411. Ultimately, it concluded that this approach would be
“technically more complex.” Id. Using multiple vendors would
“significantly complicate[] management,” “raise[] the risk profile,”
compromise ease of use, create new security vulnerabilities, and impede
interoperability. Id. The office recommended that the agency “proceed with
the acquisition of services from a single” cloud services provider. AR 412.
The analysis set out nine “high-level programmatic success criteria”
mapped to the eight objectives. AR 415. Among the criteria were “a
commercial [cloud services provider] where total usage by DoD does not
exceed 50% of the provider’s total network, computing, and storage
capacity;” “ongoing parity with commercial offerings for unclassified
applications for pricing;” a “scalable, resilient, and accredited” cloud
services solution that can manage needs from DoD’s users; and ability to
operate in disconnected and austere environments. AR 415-16.
The analysis addressed seven program risks. Oracle highlights the
sixth risk assessed, which it believes indicates a connection between the
desire for a single awardee and the metrics selected for the gate criteria:
The JEDI Cloud program schedule could be negatively
impacted if source selection extends beyond the planned
timeline due to an unexpected number of proposals or lengthy
protest delays. To mitigate this risk, the solicitation will use a
gated evaluation approach that includes “go/ no-go” gate
criteria. Offerors must meet the established minimum criteria
in order to be considered a viable competitor. Also, [the Cloud
Computing Program Office] will communicate those criteria
through a draft solicitation process.
AR 422.
11
On April 16, 2018, DoD issued the second draft RFP, including a chart
with DoD’s responses to questions received from industry. Although many
potential offerors questioned the gate criteria, DoD made only a few changes.
For Factor 1.1, the relevant measuring period remained January through
February 2018. For Factor 1.2, the location of the three data centers was
broadened from the continental United States to “the Customs Territory of
the United States.” AR 6241. DoD added that the proposed data centers must
contain hardware used to provide IaaS and PaaS services “that are FedRAMP
Moderate compliant.” Id. Factor 1.6, a marketplace containing native
services and third-party services, remained unchanged, as did the “New
Services” provision, which allowed the introduction of new services during
the ten-year contract period.
CO’s Justification of Single Award Approach
The agency was required to explain its decision to use a single award
for the JEDI Cloud procurement. The agency must satisfy both a regulatory
requirement for the CO to consider whether a multiple award was appropriate
and a statutory requirement for the head of the agency to determine if a single
award was permissible in an acquisition of this size. We discuss those
requirements below.
On July 17, 2018, the CO issued her memo stating that the rationale
for using a single award IDIQ contract overcame the multiple award
preference stated in FAR 16.504(c) (2018). That regulation provides that,
when planning an IDIQ acquisition, the CO must determine whether multiple
awards are appropriate, giving preference to multiple awards to the
“maximum extent practicable.” FAR 16.504(c). The regulations set out six
exceptions to the single award preference; if the CO determines any of those
conditions exist, the agency “must not” use a multiple award approach. Id.
The CO relied on three exceptions to the multiple award preference.
First, “[b]ased on the CO’s knowledge of the market, more favorable terms
and conditions, including pricing, will be provided if a single award is made.”
AR 455. Second, “[t]he expected cost of administration of multiple contracts
outweighs the expected benefits of making multiple awards.” Id. Third,
“[m]ultiple awards would not be in the best interests of the Government.” Id.
The CO explained that a vendor is more likely to offer favorable price
terms and make the initial investment to serve DoD’s needs if it can be
assured it will recoup its investment through packaging prices for classified
12
and unclassified services. The CO next observed that administering multiple
contracts is costlier and less efficient. Finally, she reasoned that “[p]roviding
the DoD access to foundational commercial cloud infrastructure and platform
technologies on a global scale is critical to national defense and preparing
the DoD to fight and win wars.” AR 461-62. “Based on the current state of
technology, multiple awards . . . i) increase security risks; ii) create
impediments to operationalizing data through data analytics, machine
learning (ML), and artificial intelligence (AI); and iii) introduce technical
complexity in a way that both jeopardizes successful implementation and
increases costs.” AR 462.
She explained that “multiple awards increase security risks,” because
a single cloud can offer data encryption but with the added benefit of
seamless data transfer. Id. Multiple clouds, on the other hand, would
“frustrate the DoD’s attempts to consolidate and pool data so data analytics
capabilities can be maximized for mission benefit.” AR 463. The CO iterated
that “[o]ne of the primary goals of” the procurement “is to decrease barriers
to adoption of modern cloud technology to gain military advantage.” Id. She
found that multiple clouds inherently raise barriers, because they require
additional training, interoperability, more space, and more investment. In
the conclusion, the CO stated that a single award solution “achieves better
security, better positions the DoD to operationalize its data, and decreases
barriers to rapid adoption.” AR 464.
The Under Secretary’s Justification of Single Award Approach
Just two days after the CO signed her single award determination, on
July 19, 2018, Under Secretary Lord signed a separate Determination and
Findings (“D&F”) stating that DoD was authorized to award the JEDI Cloud
contract to a single cloud services provider. This separate determination was
required, because in 2008 Congress prohibited DoD, among other agencies,
from awarding task order contracts in excess of $112 million 7 to a single
source. National Defense Authorization Act for Fiscal Year 2008, Pub. L.
No. 110-181, § 843(a)(1), 122 Stat. 3, 236 (2008) (“Limitation on Single
Award Contracts”). This added another level of scrutiny unique to large
single award procurements in addition to the multiple award preference.
7
41 U.S.C. § 1908 (2012) (statutory inflation adjustment requirement);
Inflation Adjustment of Acquisition-Related Thresholds, 80 Fed. Reg.
38293-01, 38997 (July 2, 2015) (adjusting the $100 million single award
prohibition).
13
Exceptions are permitted, however, when the head of the agency determines
that one of four exceptions to the single award prohibition exists. 10 U.S.C.
§ 2304a(d)(3)(A)-(D) (2012).
The Under Secretary based the D&F on one exception to the statutory
prohibition: “the contract provides only for firm, fixed price (FFP) task
orders or delivery orders for services for which prices are established in the
contract for the specific tasks to be performed.” AR Tab 16 at 318. Although
the statute offers three other exceptions to the single award prohibition, the
D&F only applied this single exception to the JEDI Cloud procurement.
The D&F then set out seven findings. The fourth through seventh
findings provided more detail justifying a single award. The findings set out
that the successful offeror’s discount methodologies will be incorporated into
the contract, thus presumably minimizing concern over pricing. The
contract line item numbers for cloud offerings “will be priced by catalogs
resulting from the full and open competition, thus enabling competitive
forces to drive all aspects of [firm fixed] pricing.” AR 319. The catalogs
will cover the “full potential 10 years.” Id. The successful offeror’s catalog
will be incorporated in the contract.
The Under Secretary’s discussion acknowledged two pricing-related
clauses in Section H of the contract that warranted mentioning: sections H2
and H3. Section H2 New Services, provides:
1. Subsequent to award, when new (including improved) IaaS,
PaaS, or Cloud Support Package services are made publicly
available to the commercial marketplace in the continental
United States (CONUS) and those services are not already
listed in the JEDI Cloud catalogs . . . the Contractor must
immediately (no later than 5 calendar days) notify the JEDI
Cloud Contracting Officer for incorporation of the new
services into the contract . . . . At its discretion, the Contractor
may also seek to incorporate new services into the contract in
advance of availability to the commercial marketplace. The
JEDI Cloud Contracting Officer must approve incorporation of
any new services into the contract.
2. Any discounts, premiums, or fees . . . shall equally apply to
new services, unless specifically negotiated otherwise.
3. The price incorporated into the JEDI Cloud catalog for new
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unclassified services shall not be higher than the price that is
publicly-available in the commercial marketplace in CONUS,
plus any applicable discounts, premiums or fees . . . .
a. New services that are proposed to be incorporated
into the contract in advance of availability to the
commercial marketplace may potentially be considered
a noncommercial item. The JEDI Cloud Contracting
Officer will make a fact specific commerciality
determination. If the new service is not a commercial
item and no other exception or waiver applies, the JEDI
Cloud Contracting Officer may require certified cost
and pricing data or other than certified cost and pricing
data under FAR Subpart 15.4 to make a fair and
reasonable price determination.
i. If there are any new fees associated with a new
service that is proposed to be incorporated into
the contract in advance of availability to the
commercial marketplace, the new proposed fee
must be provided to the JEDI Cloud Contracting
Officer for review and, if appropriate, approval
and incorporation into the contract.
4. The price incorporated into the JEDI Cloud catalog for new
classified services may include a price premium as compared
to unclassified services because of the additional security
requirements. . . .
AR Tab 35 at 740-41 (Final Amended RFP). The net effect of this provision
is to permit the addition of wholly new services to the contract over time.
Section H3 provides:
1. Within 45 calendar days of the Contractor lowering prices
in its publicly-available commercial catalog in CONUS, the
Contractor shall submit a revised catalog for incorporation into
Attachment J-1, Price Catalogs as follows:
a. For unclassified services, the revised catalog price
shall match the commercially lower price.
b. For classified services, the revised catalog price shall
be lowered by to be completed by Offeror percentage of
15
the net value difference for the newly lowered rate for
the unclassified service. . . .
2. Any discounts, premiums, or fees in Attachment J-3:
Contractor Discounts, Premiums, and Fees shall equally apply
to any services with price changes, unless specifically
negotiated otherwise.
3. The Contractor may offer new or additional discounts at any
time to be incorporated into Attachment J-3: Contractor
Discounts, Premiums, and Fees only upon JEDI Cloud
Contracting Officer approval.
4. When the JEDI Cloud Contracting Officer incorporates the
revised price into the Attachment J-1, Price Catalogs and/or
Attachment J-3: Contractor Discounts, Premiums, and Fees, as
appropriate, the Contractor shall update the listing of services
and corresponding prices in the online pricing calculator and
APIs for JEDI Cloud within 24 hours.
AR 741. This section would apparently offer some assurance that the prices
of new services would be moderated.
The attraction of these clauses was that DoD could take advantage of
changes in new cloud services that likely will emerge in the marketplace over
the ten year lifetime of the contract. They would also ensure that the awardee
could not price the new service “higher than the price that is publicly-
available in the commercial marketplace in the continental United States.”
AR 740. The CO could then choose to approve the addition of these services
to the contract. The Under Secretary reasoned that, because the CO had to
approve the new service, once the service was added, its unit price would be
fixed, and that the contract thus remained one in which all task orders had
“established” firm fixed prices within the terms required by the chosen
exception.
JEDI Cloud RFP
On July 26, 2018, DoD issued the RFP for the JEDI Cloud. DoD
anticipated awarding a single IDIQ contract, incorporating the awardee’s
fixed unit price information and catalog offerings to serve as the basis for
firm-fixed price task orders. The performance period could extend over ten
years: a two-year base period, two three-year option periods, and a final two-
16
year option period.
Section M provides that the agency will evaluate proposals according
to the RFP requirements and for best value to the government. The
evaluation includes two phases. First, the agency will evaluate the offeror’s
submission against the seven gate criteria. An offeror which receives an
“Unacceptable” rating for any gate criteria “will not be further evaluated.”
AR 805.
The second phase begins with the agency evaluating the remaining
proposals against Factors 2 through 6 (non-price) and Factor 9 (price). After
applying those factors, the agency will establish a competitive range.
Offerors in the competitive range will be invited to submit materials for
evaluation on non-price Factors 7 and 8 and to engage in discussions. The
agency will eliminate any offerors that are rated “Marginal” or
“Unacceptable” for Technical Capability or are rated “High” risk under
Factor 8 Demonstration. Once any discussions conclude, remaining offerors
will be permitted to submit a final proposal revision. The agency will
evaluate final proposals, eliminate any proposals with a “High” risk rating or
that are rated below “Acceptable” on non-price factors, and determine the
proposal that offers the best value.
We return now to phase one, application of the seven gate criteria
from Factor 1: 1.1 Elastic Usage; 1.2 High Availability and Failover; 1.3
Commerciality; 1.4 Offering Independence; 1.5 Automation; 1.6
Commercial Cloud Offering Marketplace; and 1.7 Data. The protest puts
Gate Criteria 1.1, 1.2, and 1.6 at issue.
Under Gate Criteria 1.1, the agency evaluates offers for whether “the
addition of DoD unclassified usage will not represent a majority of all
unclassified usage.” AR 806. To comply with this gate criteria, the offeror
must submit a summary report reflecting its capacity in terms of “Network,”
“Compute,” and “Storage” parameters for the period of January to February
2018. AR 791. “JEDI unclassified usage [must be] less than 50% of the
[Commercial Cloud Offering] usage as demonstrated by” the three metrics:
Network, Compute, and Storage. Id. Under Network, for the selected two
months, offerors had to assume JEDI Cloud unclassified ingress was 10.6
Petabytes and 6.5 Petabytes for unclassified egress. Under Compute,
offerors had to assume the JEDI Cloud unclassified average physical
compute cores in use by application servers was 46,000 cores. Under
Storage, offerors had to assume JEDI unclassified data storage usage
averaged 50 Petabytes online, 75 Petabytes nearline, and 200 Petabytes
17
offline across the 2 months.
Three days prior to the release of the JEDI Cloud RFP, Timothy Van
Name, Deputy Director of the Defense Digital Service, submitted a
memorandum to the CO justifying the use of the gate criteria. It states that
Gate Criteria 1.1 exists “to ensure that JEDI Cloud: 1) is capable of providing
the full scope of services even under surge capacity during a major conflict
or natural disaster event; and 2) experiences ongoing innovation and
development and capability advancements for the full potential period of
performance (10 years).” AR 944.
Mr. Van Name continued, “Not including this criteria will risk future
military operations that depend on the overall ability of the Offeror to support
surge usage at vital times.” Id. He explained that, “Limiting JEDI Cloud to
50%, excluding the Offeror’s own usage, is essential to ensuring the
Offeror’s ability to support commercial innovation by requiring a critical
mass of non-JEDI customers and usage that will drive further development
of the service offerings.” AR 945. Mr. Van Name justified the requirement
for offerors to present summary reports based on data from January 2018 and
February 2018 as necessary in order “to facilitate fair competition, as this
prevents potential Offerors from taking measures to change their numbers
once they became aware of this [Gate Criteria] requirement at the release of
the draft RFP in March 2018.” Id.
The next challenged Gate Criteria is 1.2. There are four elements
within Gate Criteria 1.2, but only the first is relevant to this protest:
No fewer than three physical existing unclassified
[Commercial Cloud Offering] data centers within the Customs
Territory of the United States . . . that are all supporting at least
one IaaS offering and at least one PaaS offering that are
FedRAMP Moderate “Authorized” by the Joint Authorization
Board (JAB) or a Federal agency as demonstrated by official
FedRAMP documentation.
AR 792.
Concerning Gate Criteria 1.2, Mr. Van Name wrote, “The rationale
for including these minimum requirements in the RFP is to validate that JEDI
Cloud can provide continuity of services for DoD’s users around the world.”
AR 947. He notes that “[h]igh availability and failover requirements are long
standing within the DoD, particularly around the critical infrastructure that
18
supports warfighters.” Id. Plaintiff specifically challenges the inclusion of
the FedRAMP Moderate “Authorized” requirement, which it was admittedly
unable to meet at the time of proposal submission. Mr. Van Name explained
at the time that, even though the successful offeror would not have to be
FedRAMP Moderate “Authorized” during performance, such authorization
“is the Federal cloud computing standard and represents the Department’s
minimum security requirements for processing or storing DoD’s least
sensitive information.” Id. (emphasis added). The authorization process
“validates [that] the physical data center security requirements are
appropriately met.” Id. Upon award, the offeror has thirty days to “meet the
more stringent security requirements outlined in the JEDI Cyber Security
Plan for unclassified requirements, but being able to meet the more stringent
requirements are contingent on the underlying physical data center security
requirements that are approved during the FedRAMP Moderate review
process.” Id.
The third gate criteria at issue is 1.6. The marketplace will be used
“to deploy [Commercial Cloud Offering] and third-party platform and
software service offerings onto the [Commercial Cloud Offering]
infrastructure.” AR 793. It exists “to enable DoD to take advantage of the
critical functionality provided by modern cloud computing providers to
easily ‘spin up’ new systems using a combination of IaaS and PaaS offerings
as well as offerings provided through the vendor’s online marketplace.” AR
950-51. The marketplace provides ease of use and rapid adoption. Mr. Van
Name concluded that “all [s]ub-factors under Factor 1 Gate Criteria are
necessary and reflect the minimum requirements for JEDI Cloud.” AR 952.
Post-Solicitation Events
Oracle filed a pre-bid, pre-award protest at the GAO on August 6,
2018, challenging the single award approach. The agency then amended the
RFP, and Oracle filed a supplemental protest on August 23, 2018,
challenging the three gate criteria discussed above. The agency amended the
RFP again on August 31, in relevant part permitting an offeror to demonstrate
that it met Gate Criteria 1.2, FedRAMP Moderate “Authorized,” through
authorization by the Joint Authorization Board or by an agency. Oracle then
filed a consolidated protest on September 6, 2018, raising its conflicts of
interest argument (the facts of which are discussed in the next section).
Four offerors, including Oracle, submitted proposals on October 12,
2018. GAO subsequently denied Oracle’s protest. Oracle filed its protest in
this court on December 6, 2018. Oracle did not move for a preliminary
19
injunction. The agency informed the court that it did not intend to make an
award until midsummer 2019.
Meanwhile, the agency continued to perform its evaluation, starting
with Factor 1 Gate Criteria. On December 12, 2018, the Technical
Evaluation Board (“TEB”) found Oracle’s proposal “Unacceptable” under
Factor 1 Gate Criteria 1.1 and it ended evaluation of Oracle’s proposal.
Oracle was found “Unacceptable” under the Network component of
Gate Criteria 1.1 because its “proposal does not specify a comparison of the
aggregate network usage as required, it only specifies a comparison against
installed network capacity in the Summary Report.” AR 57848. The board
also found Oracle’s proposal unacceptable for the Compute component,
because Oracle placed its table for JEDI Cloud and Cloud Commercial
Offering average physical compute cores in use in its Tab A narrative instead
of in its Summary Report. For the Storage component, the board concluded,
“The JEDI Cloud RFP requires that ‘JEDI unclassified usage must be less
than 50% of the [Commercial Cloud Offering] [average storage] in use’.
This proposal is found ‘Unacceptable’ for Subfactor 1.1(2) because the
calculated JEDI Cloud daily average storage usage is 50.79%.” AR 57849.
The proposal also failed to provide detailed storage information in bytes for
each of the required categories, instead providing an aggregate for all types
of storage. Id. Because Oracle did not meet Gate Criteria 1.1, the agency
did not consider whether it met the other five criteria.
The TEB also completed the gate criteria evaluations for the other
three offerors. The board found AWS and Microsoft “Acceptable” under all
gate criteria. It found IBM “Unacceptable” under Gate Criteria 1.2 and ended
its evaluation.
On February 19, 2019, the TEB completed its evaluation of the only
two remaining offerors, AWS and Microsoft, for non-price Factors 2-6. [
]
In late February 2019, the Source Selection Evaluation Board
completed its Executive Summary Reports, confirming that it had reviewed
the technical evaluations. The Source Selection Advisory Council then
affirmed the TEB’s consideration of the gate criteria submissions and
completed the Executive Summary Report. The Source Selection Advisory
Council Chair concluded: “[I]t is not recommended that the SSA make award
20
based on the initial proposal, as both [AWS] and [Microsoft] proposals have
deficiencies that make them unawardable.” AR 58641. After discussion with
the Source Selection Authority Council, however, the Chair recommended
“that the [Procuring Contracting Officer] make a competitive range
determination of two, to include both AWS and Microsoft.” Id. The CO
determined that AWS and Microsoft would be the competitive range. The
evaluation process is ongoing.
Conflicts of Interest Relating to the JEDI Cloud Procurement
Oracle alleges that, throughout this procurement, three individuals
with conflicts of interest (Deap Ubhi, Tony DeMartino, and Victor Gavin)
affected the integrity of the JEDI Cloud acquisition and that AWS has an
organizational conflict of interest. On July 23, 2018, the CO completed a
memo for the record stating her assessment that the possible conflicts of
interest of five individuals, including Mssrs. Ubhi and DeMartino, had “no
impact” on the procurement. She applied FAR 3.104-7. Her initial analysis
is considered below.
Tony DeMartino
Mr. DeMartino was an AWS consultant prior to joining DoD. In
January 2017, he became the Deputy Chief of Staff for the Secretary of
Defense. In March, he transitioned to Chief of Staff for the Deputy Secretary.
On April 24, 2017, a Senior Attorney in the Office of General
Counsel, Standards of Conduct Office, emailed Mr. DeMartino a
“Cautionary Notice.” AR 4345. The attorney wrote: “[Y]ou may have a
regulatory prohibition under 5 C.F.R. § 2635.502 on participating in matters
where one of the entities for whom you served as a consultant during the last
year is or represents a party to the matter.” Id. The attorney reminded Mr.
DeMartino that DoD does business with “Amazon” and that he must “be
vigilant and consult with our office before participating in any matters
involving these entities until the one-year period has expired.” Id. The email
concluded, “If you have potentially conflicting duties, please discuss with
your supervisor and coordinate with our office to ensure that any conflicts
are properly resolved.” Id.
As a part of his duties as Chief of Staff, Mr. DeMartino performed
work related to the JEDI Cloud procurement. He did not, however, have
access to the Google Drive or the Slack channels. He coordinated staffing of
the September 13, 2017 Accelerating Enterprise Cloud Adoption
21
Memorandum. In October 2017, he participated in editing an opinion piece
for the Deputy Secretary regarding the procurement just before the release of
the RFI. He coordinated meetings for the Deputy Secretary relating to the
procurement through early 2018.
Mr. DeMartino’s position required him to communicate the Deputy
Secretary’s questions to members of the Cloud Executive Steering Group and
the Defense Digital Service, among others. He also attended meetings where
the development of procurement documents was discussed.
Mr. DeMartino worked for the Deputy Secretary through March 2018.
He then returned to his position as Deputy Chief of Staff for the Secretary of
Defense. Inquiries arose in 2018 regarding his former position as an AWS
consultant. Only then did Mr. DeMartino seek advice from the Standards of
Conduct Office. The office determined that Mr. DeMartino had not
participated in the JEDI Cloud procurement in a manner covered by
regulations. The office verbally advised Mr. DeMartino, however, that given
the high visibility of the procurement, he should consider recusing himself
from anything to do with the acquisition. The office also notified those
working on the JEDI Cloud procurement of that warning.
On April 2, 2018, Mr. DeMartino communicated with Defense Digital
Service Director Lynch regarding a JEDI Cloud Update document, providing
comments and questions on that document. Between April 4 and June 5, he
emailed with members of the Defense Digital Service about an unrelated
matter, received a final briefing paper for the Secretary of Defense, and was
copied on an email from Ms. Woods regarding the second draft RFP. Mr.
DeMartino resigned from federal employment in July 2018. The record does
not reflect Mr. DeMartino negotiating for or returning to any form of AWS
employment after his resignation.
The CO considered whether Mr. DeMartino was impartial in
performing his official duties. She found that he did not have “input or
involvement in the reviewing or drafting of the draft solicitation package, the
Acquisition Strategy, Business Case Analysis, or other pre-decisional
sensitive documents relative to the JEDI Cloud acquisition.” AR 685. She
also found that he “worked with [Standards of Conduct Office] throughout
his DoD employment to ensure compliance with all applicable ethical rules.”
Id. The CO concluded that his “involvement was ministerial and perfunctory
in nature” and he “did not participate personally and substantially in the
procurement. Therefore, Mr. DeMartino’s involvement did not negatively
impact the integrity of the JEDI Cloud acquisition.” Id. In her testimony
22
during the GAO hearing in Oracle’s bid protest, the CO repeated this
conclusion. The CO did not revisit her conclusion on Mr. DeMartino’s
actions in her 2019 assessment.
Deap Ubhi
The CO also evaluated Mr. Ubhi’s impact on the JEDI Cloud
procurement. She listed five findings. First, “Mr. Ubhi was previously
employed with AWS, which ended in January 2016.” AR 686. Second, “Mr.
Ubhi was employed with Defense Digital Service from August 22, 2016 to
November 27, 2017.” Id. Third, “Mr. Ubhi was involved with JEDI Cloud
market research activities between September 13, 2017 and October 31,
2017.” Id. Fourth, “[b]ecause greater than one year had lapsed between when
his AWS employment ended and when his participation in JEDI Cloud
started, no restrictions attached to prohibit Mr. Ubhi from participating in the
procurement.” Id. Her fifth finding was:
In late October 2017, AWS expressed an interest in purchasing
a start-up owned by Mr. Ubhi. On October 31[,] 2017, Mr.
Ubhi recused himself from any participation in JEDI Cloud.
His access to any JEDI Cloud materials was immediately
revoked, and he was no longer included in any JEDI Cloud
related meetings or discussions.
Id.
The CO detailed what the agency knew at the time. Mr. Ubhi had
access to the Google Drive and Slack channels. He attended meetings within
DoD and with industry, acting as a point of contact for industry
representatives. He participated in drafting and editing some of the first
documents shaping the procurement. He argued that DoD should adopt a
single award approach. In short, Mr. Ubhi was involved in developing the
JEDI Cloud procurement until he left DoD on November 24, 2017.
On October 31, 2017, Mr. Ubhi emailed Mr. Lynch and Mr. Van
Name, copying counsel for the Standards of Conduct Office and Ms. Woods.
Mr. Ubhi wrote:
As per guidance from [Standards of Conduct Office]
(Eric Rishel) and our in-house general counsel Sharon Woods,
I am hereby recusing myself from the [Defense Digital
Service’s] further involvement in facilitating SecDef and
23
[Defense Digital Service’s] initiative to accelerate adoption of
the cloud for the DoD enterprise, due to potential conflicts that
may arise in connection to my personal involvement and
investments. Particularly, Tablehero, a company I founded,
may soon engage in further partnership discussions with
Amazon, Inc., which also owns and operates one of the world’s
largest cloud service providers, Amazon Web Services,
fulfilling that responsibility to my fullest. This project is
critical to the national security of our country, and I regret that
I can no longer participate and contribute.
AR Tab 45 at 2777. Although the agency was not aware at the time, Mr.
Ubhi’s reason for leaving DoD was fabricated. On November 13, 2017, Mr.
Ubhi resigned.
Although the agency listed Mr. Ubhi on its list of individuals
submitted to GAO who were personally and substantially involved in the
JEDI Cloud procurement, the CO nevertheless concluded that Mr. Ubhi’s
participation did not negatively affect the integrity of the procurement,
because (1) his impartiality restriction had expired prior to working on the
JEDI Cloud procurement; (2) his participation was limited; and (3) Mr. Ubhi
“promptly recused himself.” AR 687.
Oracle challenged the CO’s conclusions before GAO and before this
court. Oracle also raised a question as to whether AWS had an organizational
conflict of interest and whether the actions of another individual, Anthony
DeMartino, tainted the integrity of the JEDI Cloud procurement. During the
early stages of this protest, the agency represented that it was evaluating
whether AWS had an organizational conflict of interest.
Shortly after Oracle filed its original motion for judgment on the
administrative record, the agency filed a motion to stay this case, prompted
by an unsolicited letter it had received from AWS pointing out that some of
the information provided by Mr. Ubhi to the agency was false. The agency
therefore decided to reevaluate the impact of Mr. Ubhi’s actions in light of
the new information. The agency also planned to complete its organizational
conflict of interest evaluation of AWS. The court granted the motion to stay.
On April 15, 2019, the government filed a status report updating the court
that the agency had completed those evaluations.
When she reassessed the facts, the CO determined that, even with the
new information, Mr. Ubhi’s conflict of interest had not tainted the JEDI
24
Cloud procurement. The reassessment began with Mr. Ubhi’s involvement.
Mr. Ubhi was selected by Mr. Lynch to serve as “a product manager with a
business focus” on the Defense Digital Service JEDI Cloud team. AR 58699.
Mr. Ubhi was involved in acquisition planning. He had administrative
privileges on the Google Drive and participated in vendor meetings, although
it was DoD’s practice to have two representatives present at those meetings.
The information supplied by AWS related to Mr. Ubhi’s relationship
with AWS during his Defense Digital Service employment. AWS
maintained throughout its communication with the CO that it hired Mr. Ubhi
without knowing that he had lied to DoD about his reason for resigning and
lied to AWS about complying with DoD ethics rules. Mr. Ubhi in fact hid
relevant information and misdirected both DoD and AWS. The CO recited:
“‘AWS did not offer to purchase Tablehero . . . at any time, while he was
engaged in market research activity or otherwise. . . . Those discussions
concluded (with no deal and no future business relationship) in December
2016, long before the JEDI Cloud procurement began.’” AR 58701-02. Mr.
Ubhi’s discussions with AWS regarding Tablehero thus ended after he
started at Defense Digital Service but before he began working on the
procurement.
AWS further informed DoD that Mr. Ubhi had communicated with
AWS as early as April 26, 2017, to discuss future AWS employment. 8 Prior
to beginning work on the procurement, Mr. Ubhi had applied for, been
offered, and declined a job at AWS. Mr. Ubhi indicated in August 21 and
23, 2017 emails that he would be interested in future employment at AWS.
At nearly the same time he began work on the JEDI Cloud
procurement, Mr. Ubhi had discussions “with his former Supervisor at AWS
regarding the possibility of rejoining AWS in a commercial startup role
unrelated to AWS’s government business.” AR 58702. On October 4, 2017,
Mr. Ubhi made a “[v]erbal commitment to rejoin AWS.” AR 58703.
Throughout October, Mr. Ubhi “[m]et with companies as part of
market research” related to the JEDI Cloud project. AR 58703. In that same
period, on October 17, 2017, he applied for “an open position in AWS’s
commercial organization.” AR 58702. On October 19, 2017, Mr. Ubhi
completed an AWS Government Entity Questions form on which he
“specifically represented to AWS that he ‘confirmed by consulting with [his]
8
After AWS’s February 12, 2019 letter, the CO and AWS communicated
through March 2019.
25
employer’s ethics officer’ that he was permitted to have employment
discussions with AWS.” AR 58702 (alteration original). On that form he
also represented that he did not have “any employment restrictions
[preventing him] ‘from handling any specific types of matters if employed
by Amazon or its subsidiaries.’” AR 58705. Both representations were false.
AWS made Mr. Ubhi an offer on October 25, 2017, which Mr. Ubhi
accepted two days later. Mr. Ubhi sent the email recusing himself to Mr.
Lynch on October 31, 2017, which falsely represented his reason for leaving
DoD. He resigned on November 13, 2017. He worked at Defense Digital
Service until November 24, 2017. He rejoined AWS as “Senior Manager,
Startup Programs Management in AWS Business Development” on
November 27, 2017. 9 Id.
When considering Mr. Ubhi’s impact on the procurement, the CO
placed his actions in the context of the RFP-drafting process, which included
multiple stages and involved various DoD offices. She noted, “[M]ore than
70 individuals participated personally and substantially in the JEDI Cloud
acquisition prior to the receipt of proposals.” AR 58700. Under Secretary
Lord considered many documents that “had extensive reviews,” including
technical and legal review. AR 58699. The draft RFP went through a
Defense Procurement and Acquisition Policy peer review in April 2018. The
DoD Chief Information Officer also performed “a full top-down, bottom-up
independent review of JEDI Cloud pre-solicitation acquisition documents,
including the RFP.” Id. He consulted security, technical, and acquisition
experts. Additionally, industry offered comment on the RFI and draft RFPs.
The CO held eight interviews and reviewed numerous documents in
an effort to determine whether anyone knew that the information in the 2018
determination was inaccurate, whether anyone would adjust their opinion
about Mr. Ubhi’s influence based on the new information, and whether there
was any other undisclosed information. The CO spoke with Mr. Lynch, Mr.
9
Beyond the 2019 investigation materials, the CO also refers to AWS’s
Organizational Conflict of Interest Mitigation Plan, submitted with its
proposal, which included an affidavit from Mr. Ubhi. In it he stated that he
was only involved in the planning stages of the JEDI Cloud procurement and
that he did not provide input regarding any draft of the RFP. She relied on
her personal knowledge of the procurement development to corroborate Mr.
Ubhi’s statements. Mr. Ubhi stated that he had complied with AWS’s
information firewall and had not and would not share nonpublic information
or documentation with AWS.
26
Van Name, Ms. Woods, Mr. Kasper, Mr. Daniel Griffith, two other Defense
Digital Service representatives, and an attorney with the Standards of
Conduct Office. The CO also spoke with Ms. Christina Austin, who is
Associate General Counsel at the Washington Headquarters Service &
Pentagon Force Protection Agency within DoD.
The CO reviewed documents that she believed “were apropos to the
timeframe when Mr. Ubhi was actively involved with JEDI Cloud related
details.” AR 58707. She reviewed the draft problem statement, the notes and
questions from vendor meetings that Mr. Ubhi attended, the RFI, and Slack
conversations. She also considered AWS’s employment offer to Ubhi to
determine if it reflected payment in exchange for information.
The CO reached six conclusions. First, Mr. Ubhi violated the FAR
3.101-1 requirement that officials “avoid strictly any conflict of interest or
even the appearance of a conflict of interest in Government-contractor
relationships” and the matter therefore had to be referred to the DoD
Inspector General. AR 58707-09. The CO reported that interviewees were
surprised by Mr. Ubhi’s lie that AWS had or would be acquiring Tablehero.
He apparently did not mention any other communications with AWS. The
CO found that Mr. Ubhi had been aware of his ethical obligations and had
ignored them. She found that he should have ceased work on the
procurement after he began employment discussions with AWS. She was
“disconcert[ed]” that Mr. Ubhi’s actions called into question the integrity of
the procurement. In this section, the CO also found that the facts “warrant
further investigation concerning whether Mr. Ubhi violated 18 U.S.C. § 208,
5 CFR § 2635.604, and 5 CFR § 2635.402.” AR 58709. She referred the
issue for assessment to the Inspector General and concluded, “Whether Mr.
Ubhi’s conduct violated these particular laws does not affect my
determinations below that his unethical behavior has no impact on the []
pending award or selection of a contractor in the JEDI procurement.” Id.
Second, she found that there was no violation of FAR 3.104-3(a) by
Mr. Ubhi and no violation of FAR 3.104-3(b) by AWS. FAR 3.104-3(a)
prohibits officials with access to contractor, proposal, or source selection
information from “knowingly disclos[ing] contractor bid or proposal
information or source selection information before the award of a Federal
agency procurement to which the information relates.” FAR 3.104-3(b)
prohibits “knowingly obtain[ing] contractor bid or proposal information or
source selection information before the award of a Federal agency
procurement contract to which the information relates.”
27
The CO broadly investigated “whether there was any evidence of quid
pro quo between AWS and Mr. Ubhi.” AR 58709. The CO examined the
emails between Mr. Ubhi and his former supervisor and that supervisor’s
affidavit. She found that it was apparent that “Mr. Ubhi wanted to return to
AWS dating back to at least February 2017,” and AWS wanted him to return
as of April 2017. AR 58710. She concluded that “the AWS hiring efforts,
which started long before the JEDI Cloud, were not related to JEDI Cloud
even though the hiring occurred after the JEDI Cloud initiative started.” AR
58711.
The CO compared his employment offer to “a review of Glassdoor
and discussion with others about typical AWS employment offers.” Id. She
found that his [ ] employment package was “relatively
standard,” even if the bonus was slightly higher due to his “personal
relationship with” his former supervisor. Id. Because the offer did not appear
connected to the JEDI Cloud procurement or the sharing of nonpublic
information, the CO found that neither Mr. Ubhi nor AWS entered into the
discussions or job offer for the exchange of non-public information.
Regarding FAR 3.104-3(a)-(b), the CO noted that Mr. Ubhi stated that
he had not shared any non-public JEDI Cloud information and that, in any
event, he did not have access to RFI responses, RFP drafts, or other
acquisition sensitive documents. The CO also evaluated AWS’s statements.
Based on the company’s Organizational Conflict of Interest Response and its
emails with the CO, she concluded that it had not received non-public JEDI
Cloud information. The Senior Manager of United States Federal Business
Development and JEDI Proposal Manager provided an affidavit stating that
Mr. Ubhi had not provided any information to him, or anyone else, on the
AWS JEDI team that would have affected AWS’s proposal. AWS’s DoD
Programs Director represented that no one from the AWS Commercial
Startup team had anything to do with AWS’s JEDI proposal. AWS’s DoD
Programs Director also represented that Mr. Ubhi was “organizationally and
geographically” prevented from providing nonpublic information to her
team. Id. She had “confidence that Mr. Ubhi had absolutely no involvement
whatsoever in the AWS JEDI capture effort and that he has been truly
firewalled.” Id. The Director of Startups at Amazon Web Services World
Wide Commercial Sector Business Development stated that Mr. Ubhi “has
never revealed or attempted to reveal nonpublic information to me about the
JEDI Cloud procurement or any of the offerors involved.” Id. The CO noted
that Mr. Ubhi has not been assigned to any tasks or teams interacting with
the AWS JEDI proposal team. Id. Based on this review, she found that
neither Mr. Ubhi nor AWS violated FAR 3.104-3(a)-(b).
28
Third, she concluded that even if there had been a violation of FAR
3.104-3(a) and (b), Mr. Ubhi could not have provided competitively useful
information. Regarding the vendor meetings, she found that the information
would not have been useful to AWS and, in any event, her research indicated
that the information regarding a competitor such as Microsoft was publicly
available. Nor was the CO convinced that any DoD meetings in which Mr.
Ubhi participated were competitively useful, because they occurred prior to
the decisional documents and addressed individual needs rather than the
actual procurement strategy. Furthermore, she concluded that much of his
information relating to costs or needs would be outdated.
Fourth, there was no violation of FAR 3.104-3(c). FAR 3.104-3(c)
requires officials such as Mr. Ubhi to promptly report contacting or being
contacted “by a person who is an offeror in that Federal agency procurement
regarding possible non-Federal employment for that official” and then to
disqualify himself from further personal and substantial participation in the
procurement. The CO found that although Mr. Ubhi failed to promptly report
the contact with AWS in writing to his supervisor and the agency ethics
official and failed to timely recuse himself from JEDI Cloud activities,
because the offers were not submitted until October 12, 2018, AWS
technically was not an “offeror” until then and therefore Mr. Ubhi did not
violate the regulation. Id. She nevertheless found “Mr. Ubhi’s actions to be
unethical and improper.” Id.
Fifth, Mr. Ubhi’s participation in the preliminary stages of the JEDI
Cloud procurement did not introduce bias in favor of AWS. Mr. Ubhi was
involved in JEDI Cloud for seven weeks during the preliminary stages of
planning and no “critical decisions” were made during this period. AR
58716. The CO apparently asked “[a]ll individuals directly involved in the
JEDI Cloud effort” whether the revelations in the AWS letter changed their
opinion on Mr. Ubhi’s effect on the procurement. They uniformly said no.
She reviewed Slack messages to determine whether Mr. Ubhi
expressed bias toward any potential offeror. She determined that he did not,
because, although Mr. Ubhi had strong, sometimes coarsely-expressed
opinions, he did not show bias in favor of AWS in particular. 10 Instead, he
10
The court reviewed hundreds of pages of Slack messages—generally an
unedifying exercise, except as a cautionary tale about ill-considered use of
instant messaging. One would have thought that in this litigious culture,
people would be less promiscuous about sharing every stray mental hiccup.
29
believed that there were very few companies who could offer the services
that DoD would need to adopt an enterprise cloud solution; those companies
apparently included both Microsoft and AWS. The CO also reviewed Mr.
Ubhi’s emails and found similar sentiments. The CO pointed out that, if
anything, the Slack channels demonstrate that no one person could have
swayed the planning decisions because so many people contributed.
Sixth, even if Mr. Ubhi had attempted to introduce bias in favor of
AWS, he did not impact the procurement, for three reasons. First, Mr. Ubhi
lacked the technical expertise to substantively influence the JEDI Cloud
procurement. Second, his actual attempts to influence the procurement were
limited. “Third, and most importantly, all the key decisions for the JEDI
Cloud procurement, such as the actual RFP terms and whether to award one
or multiple contracts, were made well after Mr. Ubhi recused himself, after
being vetted by numerous DoD personnel to ensure that the JEDI Cloud RFP
truly reflects DoD’s requirement.” AR 56719-23. The CO reiterated that Mr.
Ubhi was a product manager focused on market research, not an engineer.
In her interview with Mr. Lynch, Mr. Lynch explained that Mr. Ubhi was
one member of a large group of people including “engineers, business
owners, and entrepreneurs” who favored a single provider strategy absent
Mr. Ubhi’s influence. AR 58720. The other interviewees expressed the view
that Mr. Ubhi was effective at his job, but he did not have the ability to bias
vendor meetings, RFI questions, or the single award decision.
The CO then turned to Mr. Ubhi’s contributions to procurement
documents. Regarding the problem statement, the CO found that Mr. Ubhi
contributed 100 changes to the document, along with other collaborators.
She concluded that his contributions were outdated, because the Defense
Digital Service Product Manager who was tasked with drafting the Business
Case Analysis after Mr. Ubhi left found the Problem Statement tone helpful,
but the content too limited to form the basis of the Business Case Analysis.
The CO determined that Mr. Ubhi’s RFI edits were minor, relating to how
responders discussed Tactical Edge abilities. Technical interviewees
expressed the view that Mr. Ubhi lacked the technical expertise to contribute
substantively to those documents.
Procurement documents created or received after Mr. Ubhi’s
departure included the RFI responses, Market Research Report, Joint
Requirements Oversight Council Memorandum, Single Award D&F, the
Mr. Ubhi, in particular, contributed any number of banal, puerile, profane
and culinary messages.
30
CO’s justification for a single award, Business Case Analysis, Acquisition
Strategy, RFP and draft RFPs, and justification for the gate criteria. She
iterated that multiple DoD teams developed the documents. She concluded
that, even if Mr. Ubhi had exhibited bias in favor of AWS, he had not
impacted the procurement. In summary, “[e]ven though I find that Mr. Ubhi
violated FAR 3.101-1 and may have violated 18 U.S.C. § 208 and its
implementing regulations, I determine that there is no impact on the pending
award or selection of a contractor in accordance with FAR 3.104-7.” AR
58720.
Victor Gavin
The CO also investigated the potential impact of Victor Gavin on the
integrity of this procurement and completed that investigation during the stay
in the protest. During the procurement, Mr. Gavin was a Deputy Assistant
Secretary of the Navy for C41 and Space Programs. In the summer of 2017,
Mr. Gavin discussed with Navy ethics counsel future employment with
defense contractors. He then discussed retirement plans with an AWS
recruiter and with AWS Director of DoD programs from August 2017 to
January 2018.
Mr. Gavin attended the October 5, 2017 meeting of the Cloud
Executive Steering Group to share the Navy’s experience with cloud
services. He submitted a Request for Disqualification from Duties on
January 11, 2018, requesting he be excluded from matters affecting the
financial interests of AWS. He interviewed with AWS on January 15, 2018.
On March 29, 2018, AWS offered Mr. Gavin a position and he accepted.
Mr. Gavin then attended a JEDI Cloud meeting on April 5, 2018,
where, among other things, the attendees discussed the draft Acquisition
Strategy. The CO attended the meeting as well. She recalled that Mr. Gavin
did not show bias toward a particular vendor and advocated for a multiple-
award approach. He did not edit the Acquisition Strategy.
Mr. Gavin retired from the Navy on June 1, 2018. He began work at
AWS on June 18 as Principal, Federal Technology and Business
Development. After he began work at AWS, but before AWS implemented
an information firewall, he “had a few informal conversations with AWS’s
Director, DoD, Jennifer Chronis, in which JEDI came up.” AR 24550. He
“provided only general input on DoD acquisition practices and Navy cloud
usage based on [his] years of experience as an information technology
acquisition professional at the Navy.” AR 24550-51. He represented to DoD
31
that he did not provide any JEDI Cloud procurement information to AWS’s
Director of DoD Programs.
AWS first informed Mr. Gavin of an information firewall on July 26,
2018. In separate emails on July 31, AWS informed Mr. Gavin that he is
“strictly prohibited from disclosing any non-public information about DoD’s
JEDI procurement (were he to have any) to any AWS employee” and
informed the AWS JEDI team of the firewall. AR 24544-45. Mr. Gavin said
that he would comply with the firewall.
The CO determined that, although Mr. Gavin’s attendance at the
October 5, 2017 meeting did not constitute personal and substantial
participation in the JEDI Cloud procurement, his attendance at the April 5,
2018 meeting may have constituted such participation. The CO did not
consider his participation of any significance, however, but referred the issue
to ethics counsel for further review.
The CO decided that Mr. Gavin violated FAR 3.101-1, and possibly
18 U.S.C. § 208 (2012), but that his involvement did not taint the
procurement. The CO specifically found that he had limited access to the
draft Acquisition Strategy and did not furnish any input on the document; he
did not disclose any competitively useful nonpublic information; he did not
obtain or disclose other bid information to AWS; and he did not introduce
bias into the meetings he attended. Regarding AWS, she concluded that it
had not received any competitively useful information or an unfair advantage
through Mr. Gavin.
Organizational Conflict of Interest
Finally, the CO determined that AWS did not receive an unfair
competitive advantage in the JEDI Cloud procurement and that no
organizational conflict of interest exists. She relied on FAR 9.505 as she
considered whether a significant potential conflict exists, particularly
whether AWS has received an unfair competitive advantage. She considered
whether AWS possesses “[p]roprietary information that was obtained from a
Government official without proper authorization; or [s]ource selection
information (as defined in 2.101) that is relevant to the contract but is not
available to all competitors, and such information would assist that contractor
in obtaining the contract.” FAR 9.505(b).
When submitting a proposal, the offeror was required to disclose any
actual or perceived conflicts of interest and identify measures to avoid or
32
mitigate those conflicts. The CO reviewed the AWS Organizational
Conflicts of Interest Response and supplemental materials. She considered
whether Mr. Ubhi, Mr. Gavin, and two other individuals, Brandon Bouier
and Cynthia Sutherland, could provide information to AWS that would give
it an unfair competitive advantage.
The CO began with AWS’s plan as it relates to Mr. Ubhi. Due to Mr.
Ubhi’s misrepresentations, she understandably “did not give much weight or
credibility to the statements Mr. Ubhi provided in his declarations.” AR
58750. Instead, she relied on AWS’s Organizational Conflicts of Interest
Response, which offered three assurances: (1) Mr. Ubhi has not supported
the AWS sector handling its JEDI Cloud proposal and has not been involved
in any JEDI Cloud proposal activities. (2) He has not had “any substantive
communications” with any AWS employee regarding the JEDI Cloud
procurement and has not disclosed nonpublic information. Id. (3) AWS
implemented an information firewall on May 11, 2018, sending the notice to
both Mr. Ubhi and the AWS JEDI Cloud team. It prohibited any contact,
disclosure, or discussion of information between Mr. Ubhi and AWS’s JEDI
Cloud team.
AWS’s letter provided more information regarding the information
firewall. The letter represents that, upon arrival, Mr. Ubhi “‘informally
firewalled himself by duly notifying his manager that he should not be
involved in JEDI Cloud activities because of potential conflict issues.’” AR
58751. The formal information firewall has functional, organizational, and
geographic components. The AWS Senior Lead Recruiter, the Director of
Startups of AWS Commercial Sector Business Development, the AWS JEDI
Proposal Team Lead, and the Director of DoD Programs at AWS each
provided an affidavit regarding whether Mr. Ubhi shared nonpublic
information. The materials consistently described Mr. Ubhi’s exclusion from
working with AWS’s JEDI Cloud proposal team.
The AWS Senior Lead Recruiter stated that Mr. Ubhi represented
during the hiring process, falsely as it turned out, that he had spoken with
DoD ethics officials and was engaging in employment discussions with
AWS. The recruiter also stated that Mr. Ubhi did not provide detail regarding
his work at Defense Digital Service; this was consistent with Mr. Ubhi’s
application materials. The Director of Startups of AWS Commercial Sector
Business Development—Mr. Ubhi’s manager—stated that no one on his
team, including Mr. Ubhi, worked with the AWS JEDI Cloud proposal team.
Although the CO could not determine exactly when Mr. Ubhi’s manager
became aware of Mr. Ubhi’s conflict, she explained that the exact date did
33
not matter since the manager was aware of the conflict and his sector did not
overlap with the AWS JEDI Cloud proposal team. Both the AWS JEDI
Proposal Team Lead and the Director of DoD Programs at AWS stated that
Mr. Ubhi had not communicated information to them and that they would
not seek any in the future.
Based on the mitigation plan and AWS’s representations, the CO
determined that “Mr. Ubhi’s employment with AWS Commercial Sector
Business Development does not create an [organizational conflict of
interest].” AR 58752. The CO also found that “AWS did not receive any
nonpublic information or documentation JEDI Cloud-related, including
potential competitors, from Mr. Ubhi.” AR 58753. She iterated that, even if
Mr. Ubhi had shared the early planning information, that information would
not have been competitively useful.
The CO next turned to AWS’s Organizational Conflicts of Interest
Plan as it related to Mr. Gavin. The plan stated that Mr. Gavin was not
involved in the AWS JEDI Cloud proposal preparation; had not seen AWS
proposal materials; had not provided input on the AWS proposal; and had
not disclosed nonpublic information to anyone at AWS. AWS emailed
notices to Mr. Gavin and the AWS JEDI Cloud proposal team on July 31,
2018, establishing an information firewall. Mr. Gavin provided an affidavit
stating that he participated in only one JEDI Cloud procurement meeting
while he was with the Navy (which was an inaccurate statement because he
attended a second meeting); he had no access to competitively useful
information; and he has not shared JEDI Cloud procurement information.
The CO concluded that Mr. Gavin’s employment at AWS did not create a
potential organizational conflict of interest and that Mr. Gavin had not
provided competitively useful information to AWS because he did not have
any to provide.
Reaching beyond the AWS Organizational Conflicts of Interest Plan,
the CO requested information relating to Brandon Bouier, who was
employed at Defense Digital Service in 2017. He resigned from Defense
Digital Service on August 18, 2017 and concluded his employment there on
September 1, 2017. He began work at AWS on September 25, 2017. AWS
submitted an affidavit from him. The CO noted that Mr. Bouier departed
Defense Digital Service prior to the Deputy Secretary’s September 14, 2017,
Accelerating Enterprise Cloud Adoption Memorandum. The CO, and others
at Defense Digital Service, did not recall him working on the JEDI Cloud
procurement. She thus found that he did not have nonpublic information
34
related to the procurement and that his employment at AWS did not create
an organizational conflict of interest.
The CO considered one last person: Cynthia Sutherland. Dr.
Sutherland worked for the Cybersecurity and Defenses Branch, Cyberspace
Division, Joint Chiefs of Staff. Dr. Sutherland reached out to the CO on
February 26, 2019. She was the cloud expert for the Joint Staff Chief
Information Officer. Dr. Sutherland was personally and substantially
involved in the JEDI Cloud procurement, “principally” in November and
December 2017. AR 58755. She contributed work to the Joint Requirements
Oversight Council Memorandum. She addressed cloud concerns from
council members and adjusted the memo based on the council’s feedback.
Dr. Sutherland attended the Cloud Cybersecurity Working Group’s initial
conversations, recommended how to shape cybersecurity requirements, and
provided a data dictionary to that group. She “led the development of the
cloud characteristics/requirements for the JEDI Cloud based on the needs of
the Combatant Commands, warfighter.” Id. After the Joint Requirements
Oversight Council Memorandum was signed, she provided bi-weekly
updates to the Vice Chief of the Joint Chiefs of Staff regarding the JEDI
Cloud procurement and other cloud efforts through April 2018. At that point
she only relayed information without providing input on decisions.
Dr. Sutherland applied to be an AWS Public Sector Specialist on
January 9, 2019, approximately a year after her work on the JEDI Cloud
procurement. Between her application date and February 26, 2019, she
completed four interviews with AWS. During those interviews, she
discussed “‘her level of understanding and creation of cloud requirements for
her current customers, the warfighter.’” Id. She had a final interview on
February 27, 2019. Dr. Sutherland represented that she did not discuss the
JEDI Cloud procurement in any of her conversations with AWS, instead
sticking to her understanding of cloud computing generally and her work
developing cybersecurity requirements for “global customers.” AR 58756.
AWS offered Dr. Sutherland the position of Industry Specialist on
AWS’s Security Assurance team on March 11, 2019. She accepted on the
same day. When she was communicating with the CO, she had not started
working at AWS. The AWS JEDI Proposal Team Lead and the Director of
DoD Programs at AWS stated that they were unaware that AWS had
interviewed Dr. Sutherland. AWS represented that Dr. Sutherland had not
contributed to the AWS JEDI Cloud proposal submitted in October 2018.
35
The CO found that, other than the drafts of the Joint Requirements
Oversight Council Memorandum and the initial conversations of the Cloud
Cybersecurity Working Group, Dr. Sutherland did not have access to
nonpublic information related to the JEDI Cloud procurement. The CO
concluded that Dr. Sutherland had not provided nonpublic information to
AWS, that Dr. Sutherland’s prospective employment did not create an
organizational conflict of interest, and that AWS’s plan to institute an
informational firewall when Dr. Sutherland began work was reasonable.
In conclusion, the CO decided that AWS had proposed a reasonable
risk mitigation plan, did not have an organizational conflict of interest, and
had not received nonpublic information. In its amended complaint and
supplemental motion for judgment on the administrative record, Oracle
challenges the 2019 conflicts of interest determinations.
After we lifted the stay in this protest, the parties briefed cross motions
for judgment on the administrative record. We held oral argument on July
10, 2019. On July 12, 2019, we issued an order denying plaintiff’s motion
and granting defendant’s and intervenor’s motions because Oracle has not
shown prejudice as a result of the errors discussed below.
DISCUSSION
This court has jurisdiction over actions “objecting to a solicitation by
a Federal agency for bids or proposals for a proposed contract . . . or any
alleged violation of statute or regulation in connection with a procurement or
a proposed procurement.” 28 U.S.C. § 1491(b)(1) (2012). We review such
actions for whether the agency decision was “arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A)
(2012); 28 U.S.C. § 1491(b)(4). In other words, the court’s “task is to
determine whether the procurement official’s decision lacked a rational basis
or the procurement procedure involved a violation of a regulation or
procedure.” Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d
1353, 1358 (Fed. Cir. 2015) (citation omitted).
If we conclude that DoD’s conduct fails under this standard of review,
we then “proceed[] to determine, as a factual matter, if the bid protester was
prejudiced by that conduct.” Bannum, Inc. v. United States, 404 F.3d 1346,
1351 (Fed. Cir. 2005). To show that it was prejudiced by an error, the
protestor must demonstrate “that there was a ‘substantial chance’ it would
have received the contract award but for the [agency’s] errors.” Id. at 1353.
The “substantial chance” standard has been applied in pre-award bid protests
36
in which offerors have submitted their proposals, the protestor has been
evaluated and excluded from competition, and the agency has established the
competitive range. E.g., Orion Tech., Inc. v. United States, 704 F.3d 1344,
1348-49 (Fed. Cir. 2013); Ultra Elecs. Ocean Sys., Inc. v. United States, 139
Fed. Cl. 517, 526 (2018).
Plaintiff argues that, in a pre-award bid protest, the court applies the
“non-trivial competitive injury” standard articulated in Weeks Marine, Inc.
v. United States, 575 F.3d 1352, 1358 (Fed. Cir. 2009). But the court in
Weeks Marine applied the “non-trivial competitive injury test” where the
potential offeror had not submitted a bid, “because at that stage it is difficult,
if not impossible, to establish a substantial chance of winning the contract
prior to the submission of any bids.” Orion, 704 F.3d at 1348. Here, on the
other hand, we cannot ignore the fact that it is now possible to determine
whether Oracle had a substantial chance of winning this award. We have the
necessary factual predicate, because Oracle’s proposal was evaluated and
excluded from competition based on its failure to meet Gate Criteria 1.1 and
Oracle concedes that it also could not meet Gate Criteria 1.2. Thus, while
Oracle meets the most basic element of standing—it submitted a serious
proposal—we have to consider whether it was prejudiced, even if some of its
substantive arguments are valid.
For this reason, defendant contends that it is pointless to consider most
of plaintiff’s arguments. Plaintiff responds, however, that its inability to
meet the gate criteria is not dispositive if the gate criteria are unenforceable,
either because they violate the law or because they would have been drafted
differently if the agency had not employed a single award strategy. That
question, in turn, depends in part, on whether the single award determination
was tainted by the participation of, among others, Mr. Ubhi. In short, the
merits of Oracle’s arguments are wrapped around the axle with the prejudice
question. We believe the tidiest approach, therefore, is to deal with the merits
of Oracle’s arguments, and if any survive, determine if they are nevertheless
off limits because Oracle cannot demonstrate that it was prejudiced. We
begin with Oracle’s initial contention that the single award determinations of
the Under Secretary and the CO were flawed. We conclude that one was,
and one wasn’t.
I. The Contracting Officer Reasonably Justified Her Determination
Under 10 U.S.C. § 2304a(d)(4) And FAR 16.504(c) To Use A Single
Award Approach.
As discussed in the background, two single award determinations
37
were made, by different officials under different standards. This is because,
as currently codified, 10 U.S.C. § 2304a (2012) is a mixture of different
legislative efforts at promoting competition in IDIQ contracts. Separate
legislative and regulatory efforts have been layered on top of one another
over time, resulting in the two distinct single award determinations in the
JEDI Cloud acquisition.
First, Congress directed that regulations be developed to implement a
multiple award preference that would “establish a preference for awarding,
to the maximum extent practicable, multiple task or delivery order contracts
for the same or similar services or property.” 10 U.S.C. § 2304a(d)(4). The
implementing regulation is FAR 16.504(c)(1)(i) (2018), which states the
multiple award preference and sets out the circumstances in which a single
award is appropriate for an IDIQ contract of any value. The CO made her
singe award determination under this regulation.
Section 2304a(d)(3), discussed in the next section, followed after the
codification of the multiple award preference. In that section, Congress
prohibited single awards in task or delivery order contracts valued at more
than $112 million in the absence of a written finding from the head of the
agency that one of four conditions exist. For aught that appears, these
requirements operate independently—different officials make the
determination considering different factors—although they involve very
similar subject matter. The underlying goal is certainly the same: to protect
competition.
With respect to the CO’s decision under FAR 16.504(c)(1)(i), when
the agency is considering using an indefinite-quantity contract, “the CO
must, to the maximum extent practicable, give preference to making multiple
awards of indefinite-quantity contracts under a single solicitation for the
same or similar . . . services to two or more sources.” But FAR
16.504(c)(1)(ii)(B) adds that “[t]he contracting officer must not use the
multiple award approach if—
(1) Only one contractor is capable of providing performance at
the level of quality required because the supplies or services
are unique or highly specialized;
(2) Based on the contracting officer’s knowledge of the market,
more favorable terms and conditions, including pricing, will be
provided if a single award is made;
38
(3) The expected cost of administration of multiple contracts
outweighs the expected benefits of making multiple awards;
(4) The projected orders are so integrally related that only a
single contractor can reasonably perform the work;
(5) The total estimated value of the contract is less than the
simplified acquisition threshold; or
(6) Multiple awards would not be in the best interests of the
Government.
Here, the CO found that multiple awards must not be used for three
reasons: “(2) Based on the CO’s knowledge of the market, more favorable
terms and conditions, including pricing, will be provided if a single award is
made;” “(3) The expected cost of administration of multiple contracts
outweighs the expected benefits of making multiple awards;” and “(6)
Multiple awards would not be in the best interests of the Government.” AR
455.
The regulation is unambiguous: even in light of the multiple award
preference, “[t]he contracting officer must not use a multiple award approach
if” one of six listed conditions exist. FAR 16.504(c)(1)(ii)(B) (emphasis
added). The question is whether the CO rationally determined that any of
the three chosen conditions exist. We believe she did.
Oracle argues that the CO’s memorandum did not properly balance
the multiple award preference against a single award approach. It contends
that the CO “did not meaningfully consider the benefits of competition,
arbitrarily inflated the cost of competition, and violated Congressional
policy.” Pl.’s Suppl. Mot. at 26. Oracle challenges the CO’s assessment of
whether more favorable terms and conditions are available if a single award
is made, but “the CO’s knowledge of the market” is the standard set out in
the regulation. She explained her understanding of cost and vendor
investment in a multiple award and single award context and drew the
reasonable conclusion that a single award was more likely to result in
favorable terms, including price. The CO also considered the fact that even
if price might not be more favorable in a single award, two other conditions
also exist that mandate a single award.
She asserted that multiple awards are costlier to administer and that
multiple awards simply cannot meet DoD’s expectations from cloud
39
services, whether security concerns, interoperability, or global, seamless
reach. In particular, the CO considered which approach would best serve the
agency’s security needs and concluded that a single cloud services provider
would be best positioned to provide the necessary security for the agency’s
data. She was careful to document several conditions that led the agency to
conclude it must not use multiple awards and we will not second guess her
conclusion. Plaintiff offers us no real no basis for questioning any of these
conclusions. They were completely reasonable, and we have no grounds to
disturb her conclusion that multiple awards cannot be used.
II. The D&F Relies On An Exception To The 10 U.S.C. § 2304a(d)(3)
Single Award Prohibition That Does Not Accurately Reflect The
Structure Of The JEDI Cloud Solicitation.
Separate from the CO’s single award determination, DoD was also
required to decide whether it was permitted to use a single award approach
in a procurement of this size. DoD anticipates awarding a task order contract
for cloud services to a single vendor that, including the full ten-year period,
is valued at $10 billion. This triggers the application of 10 U.S.C. §
2304a(d)(3), which prohibits awarding such large task order contracts to a
single vendor, unless the agency finds that one of four exceptions to the
prohibition exist. Section 2304a(d)(3) states,
No task or delivery order contract in an amount estimated to
exceed [$112 million] (including all options) may be awarded
to a single source unless the head of the agency determines in
writing that—
(A) the task or delivery orders expected under the contract are
so integrally related that only a single source can efficiently
perform the work;
(B) the contract provides only for firm, fixed price task orders
or delivery orders for—
(i) products for which unit prices are established in the
contract; or
(ii) services for which prices are established in the contract for
the specific tasks to be performed;
(C) only one source is qualified and capable of performing the
40
work at a reasonable price to the government; or
(D) because of exceptional circumstances, it is necessary in the
public interest to award the contract to a single source.
DoD, through Under Secretary Lord’s D&F, decided that the second
exception applies to this procurement: “the contract provides only for firm,
fixed price (FFP) task orders . . . for services for which prices are established
in the contract for the specific tasks to be performed.” AR 318.
At first blush, DoD’s D&F tracks precisely with the chosen exception:
the JEDI Cloud RFP provides only for firm, fixed price task orders. It solicits
IaaS, PaaS, and support services for which offerors will propose a catalog of
prices; that catalog will be incorporated into the contract, i.e., established, at
the time of award. If the prices of all possible tasks were “established” in
this fashion, then we would agree that exception (B)(ii) could be relied upon.
That is not the case, however.
The D&F acknowledged that, during the possible ten-year life of the
contract, services not contemplated at the time of initial award would likely
be needed and added to the contract through the technology refresh
provision, Section H2 New Services. Section H2 was crafted because DoD
knows that the cloud computing sector is constantly evolving. E.g., AR Tab
130 at 8721 (“IaaS/PaaS offerings are not static and will be updated overtime
both in terms of available services and applicable pricing. The clauses are
necessary to maintain commercial parity with how cloud services evolve and
are priced.”); AR Tab 137 at 9603 (“The landscape of cloud offerings is
evolving. . . . With growing demand comes an evolving landscape of supply.
It seems new cloud providers are emerging monthly, and the service
offerings of the vendors are rapidly shifting.”).
If at some point over the ten years of the contract the cloud services
provider creates a new service, Section H2 requires it to offer that new
service to DoD at a price not “higher than the price that is publicly-available
in the commercial marketplace in the continental United States.” AR 318.
The CO will then decide whether to add the new service. The clause also
permits DoD to acquire services before they are available on the commercial
market or that will not be offered on the commercial market. After the award,
and perforce, after any competition, these new services could only be
obtained from the single awardee. Of necessity, then, these services could
not be identified as “specific tasks,” much less priced, at the time of the
award.
41
Recognizing the apparent inconsistency between Section H2 and the
requirements of § 2304a(d)(3)(B)(ii), the D&F attempted to reconcile the use
of Section H2 with the exception DoD chose to justify a single award: “As
with any other cloud offering, once the new service is added to the catalog,
the unit price is fixed and cannot be changed without CO approval.” Id. In
other words, even though the tasks are different than those described and
priced in the original contract, the contract eventually will still use only firm,
fixed price task orders. The agency found that its custom-made technology
refresh provision therefore is consistent with “[firm, fixed price] task orders
for services for which prices are established in the contract for the specific
tasks to be performed.” Id. It is difficult to treat this as anything more
sophisticated than the assertion that “these are established fixed prices for
specific services because we say they are.”
As Oracle points out, there is a logical disconnect between claiming
that prices are “established in the contract” for “specific tasks” while
simultaneously acknowledging that those tasks, and their accompanying
prices, do not yet exist. While the government and intervenor respond that
Oracle is improperly reading a term into the text of § 2304a(d)(3)(B)(ii) that
is not present, namely “at the time of entering the contract,” plaintiff does
not have to “read” this interpretation into the statute. It is already present in
the use of the term, “established,” and in the language of the prohibition itself
that “no contract may be awarded.” Reading this as a present tense
description of the status of the contract terms is much less tortured than
inserting a phrase with a future spin: “or which may be established in the
contract prior to placing future task orders.” We see no ambiguity in the
language. In an ordinary reading, prices for specific services must be
“established” at the time of contracting. Prices for new, additional services
to be identified and priced in the future, even if they may be capped in some
cases, are not, by definition, fixed or established at the time of contracting.
It should go without saying that the exception must be true at the time of
award—no task order contract exceeding $112 million “may be awarded”—
and exception (B)(ii) speaks of prices and specific tasks as “established in
the contract,” not that “will be” established in the future. Given the tenor of
the language employed in describing the need for cloud computing, Section
H2 is not a trivial addition.
The government argues that requiring prices for specific tasks to be
established at the time of contracting would prevent DoD from modifying
the contract during performance in any way. This is not entirely accurate. It
is true that the statutory prohibition prevents a particular type of change—
42
the contractor and agency cannot add new tasks at new prices after entering
the contract. Other types of modifications that fall outside of the bespoke
Section H2 are not affected, however. The use of a technology refresh
provision thus appears to be at odds with § 2304a(d)(3)(B)(ii), and the Under
Secretary apparently chose an exception under § 2304a(d)(3) which does not
fit the contract.
This conclusion is obviously somewhat in tension with our previous
decision upholding the CO’s decision that multiple awards are not allowed.
This peculiar state of affairs is an artifact of a code section which is a mixture,
rather than an alloy, of various pieces of legislation. Not surprisingly, the
parties have different views about the implications of this possible result and
whether Oracle is prejudiced by the flawed D&F.
III. Oracle Cannot Demonstrate Prejudice As A Result Of The Flawed
D&F.
Oracle argues that the requirements are independent and that it is
prejudiced by the agency’s failure to comply with 10 U.S.C. § 2304a(d)(3)
because Oracle could have competed in a properly structured multiple award
procurement. Oracle’s argument assumes there would be some purpose to
remanding to the agency to obtain a new D&F, despite the CO’s conclusion.
And not operating on that assumption treats § 2304a(d)(3) as superfluous,
which the court is reluctant to do. Moreover, Oracle argues that it is
prejudiced because the agency’s needs, as expressed in the gate criteria,
could well be different in a multiple award procurement. It argues that the
single award determination and the gate criteria are necessarily connected:
the agency improperly decided to award the majority of its cloud computing
business to one provider and, thus, the agency must have a monolithic
provider to meet its minimum needs.
The government and AWS first respond that if the CO’s decision is
upheld, the Under Secretary could not have sanctioned the use of multiple
awards, so a remand would be pointless. This assertion strikes us as a tad
sophistical, but, in any event, and fortunately for the defendant, we think their
next argument concerning prejudice has merit.
The government and intervenor argue that Oracle cannot demonstrate
prejudice as a result of the flawed D&F because the agency’s minimum needs
would not have changed in a multiple-award scenario. In other words, Gate
Criteria 1.1 and 1.2 are enforceable, Oracle cannot meet them, and there is
no connection between the single award determination, the gate criteria, and
43
possible ethics violations. Under any scenario, Oracle would be out of the
competition.
In substance we agree, at least with respect to Gate Criteria 1.2. While
Oracle may well be correct that some aspects of the gate criteria are driven
by the agency’s insistence on using a single provider to manage an immense
amount of data, one critical aspect of the gate criteria is not connected to the
choice of a single provider: data security.
The security concern is explicit in Gate Criteria 1.2. The security
component of Gate Criteria 1.2 is based on DoD’s “minimum security
requirements for processing or storing DoD’s least sensitive information.”
AR 947. Mr. Van Name explained that the challenged portion of Gate
Criteria 1.2 reflects the “minimum criteria necessary for DoD to have
confidence that the Offeror’s proposed data centers have met the underlying
physical security requirements necessary to successfully perform the
contract.” Id. Many of the acquisition documents bolster the agency’s
conviction that use of multiple cloud service providers exponentially
increases the challenge of securing data. We have no reason to doubt the
agency’s many representations that the Gate Criteria 1.2 security
requirements are the minimum that will be necessary to perform even the
least sensitive aspects of the JEDI Cloud project.
In other words, although this criteria presumes a single award, the
only logical conclusion is that, if multiple awards were made, the security
concerns would ratchet up, not down. They are, indeed, minimally stated. If
Oracle cannot meet Gate Criteria 1.2 as currently configured, it is thus not
prejudiced by the decision to make a single award. The agency’s needs
would not change, so Oracle would not stand a better chance of being
awarded this contract if the agency determined that the procurement must be
changed to multiple award.
Thus, in order to prevail, Oracle must show that both Gate Criteria 1.1
and Gate Criteria 1.2 are otherwise unenforceable. It would not be sufficient
for Oracle to demonstrate that Gate Criteria 1.1 alone is unenforceable,
because it also cannot not meet Gate Criteria 1.2. We need not consider Gate
Criteria 1.1, or 1.6 for that matter, because we are satisfied for reasons set
out below, that Gate Criteria 1.2 is enforceable.
IV. Gate Criteria 1.2 Is Enforceable.
44
Oracle argues that Gate Criteria 1.2 is unenforceable because it
exceeds the agency’s minimum needs, that it is in fact an unauthorized
qualification requirement, and it amounts to the use of “other than
competitive procedures” without proper justification.
Oracle first argues that DoD did not identify an underlying need
before imposing Gate Criteria 1.2. When preparing to procure services, the
agency must “specify the agency’s needs and solicit bids or proposals in a
manner designed to achieve full and open competition for the procurement.”
10 U.S.C. § 2305(a)(1)(A)(i) (2012). The solicitation must “include
specifications which[,] consistent with the provisions of this chapter, permit
full and open competition; and include restrictive provisions or conditions
only to the extent necessary to satisfy the needs of the agency or as authorized
by law.” § 2305(a)(1)(B). The specifications “shall depend on the nature of
the needs of the agency and the market available to satisfy such needs.” §
2305(a)(1)(C). The agency may state specifications for “(i) function, so that
a variety of products or services may qualify; (ii) performance, including
specifications of the range of acceptable characteristics or of the minimum
acceptable standards; or (iii) design requirements.” Id.
Oracle alleges that the requirement in Gate Criteria 1.2 that certain
offerings must be FedRAMP Moderate “Authorized” by the proposal
deadline exceeds DoD’s minimum needs. Oracle does not challenge any
other aspect of Gate Criteria 1.2 in terms of the agency’s need. Oracle also
does not argue that the agency could not require some security assurance at
the time of proposal, just that the agency improperly chose FedRAMP
authorization. The government responds that the agency has properly
justified the criteria based on its needs.
We agree with the government that Gate Criteria 1.2 is tied to the
agency’s minimum needs. Mr. Van Name’s memorandum explained that
“FedRAMP Moderate is the Federal cloud computing standard and
represents the Department’s minimum security requirements for processing
or storing DoD’s least sensitive information.” AR 947. The cloud services
provider will be required to work with the agency to meet the “more stringent
security requirements outlined in the JEDI Cyber Security Plan” shortly after
award, and if the cloud services provider cannot meet even the FedRAMP
Moderate standard at the time of proposal the agency will not be able to move
forward with implementing the JEDI Cloud in a timely manner. Id.
Furthermore, even though the JEDI Cyber Security Plan is a separate
requirement, Mr. Van Name explained that “FedRAMP Moderate is the
minimum criteria necessary for DoD to have confidence that the Offeror’s
45
proposed data centers have met the underlying physical security
requirements necessary to successfully perform the contract.” AR 947-48. It
is a useful proxy, in other words, for the agency’s real need. If an offeror
were unable to meet the lower threshold, it could not hope to meet the higher.
Oracle argues by pointing to Slack messages and risk statements that
DoD’s security requirements are not the real reason for this Gate Criteria 1.2
component; rather the agency wanted to decrease the possibility of too many
proposals or protests. E.g., AR 422, 3123. The Slack messages and risk
sections in acquisition planning documents that Oracle points to do not,
however, undermine Mr. Van Name’s justification. The agency’s concern
about being inundated with too many unqualified offers or protests does not
reveal a nefarious purpose for the gate criteria; that concern can coexist with
legitimate security risks. The agency’s justification provides a rational basis
for why it chose FedRAMP Moderate “Authorized” to satisfy itself that a
bidder’s offerings would be eligible to house DoD data.
Alternatively, Oracle argues that Gate Criteria 1.2 is a qualification
requirement subject to the provisions of 10 U.S.C. § 2319 (2012). The
government responds that Oracle waived this argument, because it had the
opportunity to object to the terms of Gate Criteria 1.2 as improperly imposed
qualification requirements prior to the close of the bidding process and failed
to do so. See Blue & Gold Fleet, LP v. United States, 492 F.3d 1308, 1313
(Fed. Cir. 2007). The government is correct—Oracle’s more generalized
challenges to the criteria did not raise this precise argument until post-hearing
comments submitted to GAO on October 18, 2018, after the close of bidding.
In any event, even if the qualification requirement argument was timely
raised, Gate Criteria 1.2 is not a qualification requirement.
A qualification requirement is “a requirement for testing or other
quality assurance demonstration that must be completed by an offeror before
award of a contract.” 10 U.S.C. § 2319(a). If using one, the agency must
prepare a written justification stating the requirement and explaining why it
must be completed pre-award, specifying a cost estimate, providing for a
prompt opportunity for an offeror to demonstrate its ability, and ensuring that
the offeror is provided specific information if it fails the qualification
requirement. A qualification requirement is generally “a qualified bidders
list, qualified manufacturers list, or qualified products list.” § 2319(c)(3).
This distinguishes a specification from a qualification requirement.
Specifications, the subject of 10 U.S.C. § 2305(a)(1)(A)(i)-(B)(ii), “are the
requirements of the particular project for which the bids are sought, such as
46
design requirements, functional requirements, or performance
requirements.” W.G. Yates & Sons Const. Co., Inc. v. Caldera, 192 F.3d 987,
994 (Fed. Cir. 1999). “Qualification requirements, on the other hand, are
activities which establish the experience and abilities of the bidder to assure
the government that the bidder has the ability to carry out and complete the
contract.” Id.
In W.G. Yates, the Federal Circuit found that the Army had improperly
established a qualification requirement. The Army required a potential
bidder “to have designed, manufactured, and installed ten similar door
systems in satisfactory operation for a minimum of five years” prior to award.
Id. at 993. The Federal Circuit concluded that the requirement was not a
specification, because it pertained to “to successful completion of other,
similar hangar door projects,” unrelated to the Army’s solicitation. Id. at
994. A specification would relate to the project at hand, such as “the size of
the doors, structural steel requirements, ability to withstand wind loads, and
the like.” Id.
By comparison, in California Industries Facilities Resources, Inc. v.
United States, this court considered whether the Air Force improperly
imposed qualification requirements when it required liner system, wind gust,
and snow load testing for certain military shelters prior to award. 80 Fed. Cl.
633, 641-43 (2008). The court compared the Air Force’s requirement to the
Army’s requirement in W.G. Yates and also explored GAO’s explanations of
qualification requirements. GAO considers a qualification requirement “a
systematized quality assurance demonstration requirement on a continuing
basis as an eligibility for award,” Aydin Corp.—Reconsideration, B–224185,
87–1 CPD ¶ 141 (Feb. 10, 1987), or “a system [that] is intended to be used
prior to, and independent of, the specific procurement action.” Scot, Inc., B–
292580, 2003 CPD ¶ 173 (Oct. 3, 2003). The court concluded that the Air
Force’s testing requirements were specifications, because they did not relate
to other contracts, products, or a system independent of the procurement but
were focused on the particular features of the shelters that the offerors would
propose.
Oracle argues that the FedRAMP Moderate “Authorized” requirement
in Gate Criteria 1.2 is a qualification requirement, specifically because that
authorization would have been acquired in the past through either the Joint
Authorization Board or from another agency. The substance of this
requirement is that an offeror must show that a sampling of its offerings, at
datacenters 150 miles apart, have certain security features. Oracle contends
that this is a backwards-looking, independent quality assurance mechanism
47
because the awardee will not be subject to the FedRAMP approval process
and DoD described using FedRAMP as a “mechanism to validate that the
core architecture is extensible and likely to be able to meet the JEDI Cloud
requirements across all service offerings.” AR Tab 43 at 955.
The FedRAMP authorization requirement does resemble an
independent quality assurance system in some respects, but a few facts
distinguish this component of Gate Criteria 1.2 from the “ten similar door
systems in satisfactory operation for a minimum of five years” requirement
in W.G. Yates. First, the agency did not require an offeror to prequalify in
order to submit a proposal or to be on qualified bidders list prior to submitting
its proposal. In that way the JEDI Cloud gate criteria are distinctly unlike
classic qualification requirements. Second, as Oracle acknowledges,
FedRAMP authorization is not an independent, systematic requirement that
DoD imposes in its procurements. Third, the security features that
FedRAMP authorization includes are the security features that DoD believes
are in fact the minimum necessary to store DoD data for the JEDI Cloud
project itself. The agency is not using the FedRAMP process as a way to
examine the offeror’s past performance storing government data. Rather it
is a uniform way to determine which offerors have certain security
capabilities on a number of their cloud offerings. The offeror cannot store
even the least secure data without such security features. DoD can specify
that an offeror must show that some of its offerings can meet certain security
baselines, using a uniform tool to measure that security baseline, without
triggering a qualification requirement.
Finally, Oracle argues that Gate Criteria 1.2 transforms this
procurement into one that uses other than competitive procedures. The
agency “(A) shall obtain full and open competition through the use of
competitive procedures in accordance with the requirements of this chapter
and the Federal Acquisition Regulation; and (B) shall use the competitive
procedure or combination of competitive procedures that is best suited under
the circumstances of the procurement.” 10 U.S.C. § 2304(a)(1). The agency
“may use other than competitive procedures,” when one of seven conditions
is present. § 2304(c).
Relevant here, the agency may forgo competitive procedures when
the services “are available . . . only from a limited number of responsible
sources and no other type of property or services will satisfy the needs of the
agency,” § 2304(c)(1), or the agency’s need “is of such an unusual and
compelling urgency that the United States would be seriously injured unless
the agency is permitted to limit the number of sources . . . .” § 2304(c)(2).
48
Even if the agency has grounds to forgo competitive procedures, it must not
award a contract under such circumstances “unless the contracting officer . .
. justifies the use of such procedures in writing and certifies the accuracy and
completeness of the justification;” the justification is properly approved; and
any required notice is given. § 2304(f)(1).
Oracle alleges that the agency chose the gate criteria specifically to
limit the number of bidders, effectively resulting in “other than competitive
procedures.” The statements that Oracle points to, however, are not in the
gate criteria justification memorandum. They appear either in Slack
messages between members of Defense Digital Service, or in the risk section
of acquisition planning documents.
The Federal Circuit recognized in National Government Services, Inc.
v. United States, “the unremarkable proposition that “a solicitation
requirement (such as a past experience requirement) is not necessarily
objectionable simply because that requirement has the effect of excluding
certain offerors who cannot satisfy that requirement.” 923 F.3d 977, 985
(Fed. Cir. 2019). The few record statements Oracle highlights are
insufficient to demonstrate that the agency is using “other than competitive
procedures” in the JEDI Cloud procurement. The agency structured this
procurement to use full and open competition and the gate criteria are just
the first step in the evaluation of proposals. The government aptly pointed
out that the substance of the gate criteria evaluation could have occurred at
any point in evaluation of proposals; the agency simply put the gate criteria
first to ensure its evaluation was not wasted on offerors who could not meet
the agency’s minimum needs. As Mr. Van Name’s memorandum reflects,
the gate criteria are based on more than the agency’s awareness that its
timeline would be delayed if it received too many proposals. While the gate
criteria certainly had the effect of excluding some offerors, that does not
transform the procurement into less than full and open competition.
Specific to the Gate Criteria 1.2 component that certain offerings must
be FedRAMP Moderate “Authorized,” Oracle argues that the agency knew
at the time of issuing the RFP that only two companies could meet that gate
criteria. As such, the agency knew that the necessary cloud services are
available from only a limited number of responsible sources. Because the
agency knew that only a limited number of responsible sources could offer
the services, the agency necessarily chose less than open competition without
following the proper procedure. Oracle bases this argument on the fact that
“the FedRAMP approval process is government-run (with DoD
involvement). DoD necessarily knew that only two offerors could meet this
49
requirement—Microsoft and AWS.” Pl.’s Suppl. Mot. 41. In its response and
reply brief, Oracle adds that “[b]ased on its market research, DoD necessarily
knew that only two cloud service providers had the existing infrastructure
with FedRAMP authorized offerings to meet the gate.” Pl.’s Resp. & Reply
23.
The government is correct, however, that evaluation criteria which
have the effect of limiting competition do not necessarily trigger the
procedures required by § 2304(c). Full and open competition “means that
all responsible sources are permitted to submit sealed bids or competitive
proposals on the procurement.” 41 U.S.C. § 107 (2012); 10 U.S.C. §
2302(3)(D) (2012). Here, they were. The solicitation permitted all
responsible sources to submit proposals. Four offerors submitted proposals.
Even if the agency knew that as of early 2018 only certain firms would
survive the gate criteria, it nevertheless chose to accept proposals from all
responsible sources. Indeed, the CO in her memorandum documenting the
rationale for a single award contract stated, “The results of market research
indicate that multiple sources are capable of satisfying DoD’s requirements
for JEDI Cloud and that commercial cloud services customarily provided in
the commercial marketplace are available to meet a majority of DoD’s
requirements.” AR 457. The FedRAMP authorization component does not
transform the solicitation into one for less than full and open competition.
Having considered both the single award determinations and Gate
Criteria 1.2, we can return to the question of prejudice. Assuming the agency
relied on a flawed D&F, would Oracle have had a better chance of competing
for this contract? We can confidently answer, no, because Oracle could not
meet the agency’s properly imposed security requirements.
This conclusion might normally be the natural stopping point in our
decision, but Oracle raises a few other arguments that it contends present an
independent prejudicial error requiring this procurement to be set aside. We
thus address the competitive range briefly before turning to the conflicts of
interest determinations.
V. The CO Rationally Set The Competitive Range.
Oracle’s next argument is that, regardless of the propriety of the gate
criteria, the agency unequally considered offerors when she permitted
Microsoft and AWS to advance to a competitive range, despite the fact that
they were both considered unawardable on several factors. Since all four
offerors failed some factors, Oracle contends that the agency should have
50
established a range of all four offerors.
Oracle is incorrect. DoD reasonably evaluated the offerors according
to the terms in Section M of the solicitation. Section M unambiguously
provided that any offeror who failed Factor 1, the gate criteria, would be
immediately eliminated from consideration. Oracle and IBM failed Factor 1
and were thus properly eliminated. According to the terms of Section M,
only AWS and Microsoft were eligible for further evaluation. The agency
took the next step of evaluating both under the non-price factors and, finding
both unawardable and in need of significant revisions, chose to set the
competitive range of those two offerors and continue on to discussions and
revisions. The evaluation thus equally treated all offerors in accordance with
the process set out in Section M.
VI. The CO’s Determinations Regarding Conflicts Of Interest Are
Rational And Consistent With FAR Subparts 3 And 9.
Oracle challenges the CO’s determination that the involvement in the
procurement by Mssrs. Ubhi, DeMartino, and Gavin did not taint the process.
It also argues that the CO irrationally determined that AWS does not have an
organizational conflict of interest. Oracle contends that its conflicts of
interest arguments are independent bases on which to set aside this
procurement, because the individual conflicts tainted the structure of the
procurement, particularly the single award determinations and the substance
of the gate criteria.
The facts on which Oracle rests its conflicts of interest allegations are
certainly sufficient to raise eyebrows. The CO concluded that at least two
DoD officials disregarded their ethical obligations by negotiating for AWS
employment while working on this procurement. Through lax oversight, or
in the case of Ubhi, deception, DoD was apparently unaware of this fact.
AWS, for its part, was too prepared to take at face value assurances by Mr.
Ubhi that he had complied with his ethical obligations. While there is
nothing per se illegal about capitalizing on relevant experience in moving to
the private sector, the larger impression left is of a constant gravitational pull
on agency employees by technology behemoths. The dynamic apparently is
real enough that one would hope the agency would be more alert to the
possibilities of an erosion of public confidence, particularly given the risk to
the agency in having to redo procurements of this size.
The limited question, however, is whether any of the actions called
out make a difference to the outcome. And in particular, the even narrower
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question before the court is whether the CO’s conclusion of no impact is
reasonable. The court is fully prepared to enforce the agency’s obligation to
redo part or all of this procurement if the CO’s conclusion that there was no
impact was unreasonable in any respect, but our ultimate conclusion, after a
detailed examination of the record, is that the CO’s work was thorough and
even-handed. She understood the legal and factual questions and considered
the relevant evidence. It is unfortunate that the employees in question gave
her so much evidence to consider, making it is easy for Oracle to cherry pick
from the vast amount of communications and isolate a few suggestive sound
bites. But that volume should not compel an unreasoned leap to the
conclusion that there was fire as well as smoke.
1. Individual Conflicts of Interest
We review the CO’s determinations for a rational basis and
consistency with the applicable law. Regarding the personal conflicts of
interest, “[a] contracting officer who receives or obtains information of a
violation or possible violation of 41 U.S.C. 2102, 2103, or 2104 (see 3.104-
3) must determine if the reported violation or possible violation has any
impact on the pending award or selection of the contractor.” FAR 3.01-7(a)
(2018). If the CO determines that there is no impact on the procurement, she
must forward the information to a designated individual within the agency.
Id. If that individual concurs with the CO, the procurement may proceed.11
Id.
Here, the CO determined that, although there were some violations or
possible violations of law relating to conflicts of interest, those conflicted
individuals did not impact the decision to use a single award approach or the
substance of the evaluation factors. It is easy to critique uncritically her
analysis and characterize it as, “there were lots of people involved in the
decisions here, so it’s unlikely the persons in question impacted the result.”
We are satisfied that would be a simplistic and inaccurate critique. In fact,
there were a lot of people involved in this procurement, and the ones called
11
Oracle argues that the court must go beyond the CO’s determinations in
this matter and consider whether these personal conflicts of interest
constitute a violation of certain statutes, particularly 18 U.S.C. § 208 as it
relates to Mr. Ubhi. We disagree. Our standard of review is explicitly set
out in 28 U.S.C. § 1491(b)(4) and does not include this court holding a mini
criminal trial in the course of deciding a bid protest. In any event, the CO
here considered possible violations of 18 U.S.C. § 208 and performed an
“even if” analysis as a part of her FAR Subpart 3 determination.
52
out by the ethics investigations indeed were a very small part of the substance
of the procurement, both as a result of their limited roles and as a result of
the timing of important decisions.
We think that the conclusion the CO in effect asks us to draw, that
these individuals were bit players in the JEDI Cloud project, is correct. They
were not members of the Cloud Executive Steering Group, the Cloud
Computing Program Office, the Joint Requirements Oversight Council, or
the Cost Assessment and Program Evaluation, and that is only a partial list
of the many DoD offices and officials who had a role in the structure of this
procurement. See, e.g., AR Tab 64, 91, 94. Nor were they acting as the CO,
Under Secretary, the Chief Information Officer, the Deputy Chief
Management Officer, or other official who developed or signed off on
challenged components of this procurement. While they should not have had
the opportunity to work on the JEDI Cloud procurement at all, or at least for
certain periods of time, nevertheless, their involvement does not taint the
work of many other persons who had the real control of the direction of the
JEDI Cloud project.
A. Mr. DeMartino
The CO considered all of the relevant facts regarding Mr.
DeMartino’s involvement. None of the facts contradict her ultimate
conclusion that his involvement with JEDI did not impact the procurement.
While we might view the CO’s characterizations as a bit generous (for
instance, Mr. DeMartino clearly did not work with government ethics
personnel “throughout” his DoD employment), nevertheless, she rationally
determined that he was merely a go-between for the Deputy Secretary and
did not have substantive input into the structure or content of the solicitation.
Specifically, Mr. DeMartino did not have a voice in whether DoD should use
a single or multiple award approach and did not craft the substance of the
evaluation factors. His employer, the Deputy Secretary, was expressly
“open” to either single or multiple award at least into late 2017. AR 4352.
Moreover, DeMartino did not leave DoD to work for AWS during, or
apparently after this procurement. We view him as not relevant to the AWS
organizational conflict of interest analysis.
B. Mr. Gavin
The CO likewise considered all of the relevant facts regarding Mr.
Gavin’s involvement. First, her conclusion that “Mr. Gavin violated FAR
3.101-1, and possibly violated 18 U.S.C. § 208 and its implementing
53
regulations,” is well-supported. The CO properly went on to ask whether, in
light of the conflict, Mr. Gavin impacted the procurement. The record
supports her conclusion that Mr. Gavin was involved only to offer his
knowledge of the Navy’s cloud services experience. He was not a member
of the Cloud Executive Steering Group, Defense Digital Service, the Chief
Information Office, or any other team tasked with spearheading aspects of
this procurement. As far as we can tell from the record, he did not assist in
crafting the single award determinations or the technical substance of the
evaluation factors. At most, he attended a few JEDI Cloud meetings. He
does not appear to have obtained any contractor bid or proposal information
nor does he appear to have introduced any bias toward AWS into the
meetings he attended. It would have been proper for the CO to discount Mr.
Gavin’s affidavit as she did Mr. Ubhi’s, because she felt he had violated FAR
3.101-1. Even when his involvement is considered without his own
assurances that he did not act improperly, the CO’s review of the record was
reasonable that Mr. Gavin was involved solely to offer his past experience
with cloud computing contracts.
Oracle is correct that we do not know exactly what Mr. Gavin
communicated to AWS’s JEDI proposal team lead prior to the information
firewall. Mr. Gavin acted improperly in that regard, as did the AWS
employee who spoke with him. But the CO reasonably determined that Mr.
Gavin simply did not have access to competitively useful information to
convey to AWS. By the time Mr. Gavin began working at AWS, the draft
RFP had been released, providing AWS access to the relevant information
that also appeared in the draft Acquisition Strategy. We thus find that the
CO’s conclusion regarding Mr. Gavin was rational.
C. Mr. Ubhi
The last individual who worked on the procurement despite a personal
conflict of interest was Mr. Ubhi. We agree with the CO that his behavior
was disconcerting. Despite being aware of his ethical obligations, he ignored
them. The CO drew six conclusions regarding Mr. Ubhi; we will consider
each in turn.
First, the CO reached the obvious conclusion that Mr. Ubhi violated
the FAR 3.101-1 requirement that officials “avoid strictly any conflict of
interest or even the appearance of a conflict of interest in Government
contractor relationships” and thus the matter had to be referred to the DoD
Inspector General. AR 58707-09. She also considered related prohibitions
and reasonably concluded that Mr. Ubhi’s behavior must be referred to the
54
Inspector General for investigation of “whether Mr. Ubhi violated 18 U.S.C.
§ 208, 5 CFR § 2635.604, and 5 CFR § 2635.402.” AR 58709. The CO
continued her analysis, as FAR 3.104-7 directed her to do, assuming that Mr.
Ubhi’s participation was unethical and might have impacted events he
participated in. We find nothing irrational in this first conclusion.
Next, the CO concluded both that Mr. Ubhi’s employment package
did not reflect a quid pro quo for nonpublic information relating to the JEDI
Cloud procurement and that there is no evidence that Mr. Ubhi shared
nonpublic information with AWS. To reach this conclusion, she considered
all of the employment negotiations between Mr. Ubhi and AWS (beginning
before the JEDI Cloud procurement) and his employment offer. Based on
discussions and research, she concluded that AWS was interested in hiring
Mr. Ubhi regardless of his JEDI Cloud involvement and that his substantial
employment package did not appear to be tied to receiving nonpublic
information. Her conclusion here is reasonable and highlights an important
aspect of Mr. Ubhi’s post-DoD work: he did not return to AWS to work on
its JEDI Cloud proposal team, for its Federal Business Sector, or for the DoD
Programs section.
She went on to consider the communications DoD had with AWS and
the affidavits submitted from AWS employees stating that they had not
received, or hoped to receive, any information from Mr. Ubhi. She
considered affidavits from individuals both within AWS’s commercial sector
(where Mr. Ubhi is now employed) and AWS’s federal business sector
(where the AWS JEDI Team works). None of those affidavits suggest that
Mr. Ubhi shared any information with the JEDI Cloud team or that the team
would welcome his input. The CO did not find any evidence to suggest that
he had shared nonpublic information with AWS or that AWS had solicited
such information. The CO took the whole record into account, discounted
Mr. Ubhi’s assurances, and considered AWS’s apparent motivations and the
statements made by its employees under penalty of perjury. We did not find
any critical facts that she overlooked in reaching this conclusion and thus
find no reason to disturb it.
The CO’s third conclusion was that even if Mr. Ubhi had disclosed
nonpublic information, none of it would have been competitively useful. The
CO detailed both potential offeror information and DoD information that Mr.
Ubhi had access to as a member of the Defense Digital Service team. She
detailed her analysis that the vendor meeting information would not have
been competitively useful to AWS and that much of the DoD information
was premature, based on incorrect assumptions, and, in any event, was
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revealed to the public during meetings and industry research. Again, the CO
considered this question closely and we have found nothing in the record to
suggest that her explanation was unsatisfactory.
Oracle takes issue with the fact that the CO, in her fourth conclusion,
applied FAR 3.104-3(c) too literally. The section requires officials such as
Mr. Ubhi to promptly report contacting or being contacted “by a person who
is an offeror in that Federal agency procurement regarding possible non-
Federal employment for that official” and then to disqualify himself from
further personal and substantial participation in the procurement. FAR
3.104-3(c) (emphasis added). The CO repeated that Mr. Ubhi was personally
and substantially involved. She found that Mr. Ubhi failed to “promptly
report the contact with AWS in writing to his supervisor and the agency
ethics official” and failed to timely recuse himself from JEDI Cloud
activities. But Mr. Ubhi did not violate this particular section of FAR
Subpart 3 because AWS was not an offeror at the time. The CO repeated
that Mr. Ubhi behaved unethically and improperly and she read and applied
FAR 3.104-3(c) as written. We find nothing objectionable in her analysis
under FAR 3.104-3(c).
Fifth, the CO concluded that Mr. Ubhi’s seven-week contribution to
the planning stage of the JEDI Cloud procurement did not introduce bias in
favor of AWS. The CO reviewed Mr. Ubhi’s work and found that, despite
often expressing vehement opinions about various people and companies, he
did not lobby in favor of a particular cloud services provider. Her conclusion
is supported in the record.
Sixth, the CO concluded that even if Mr. Ubhi tried to introduce bias
into the procurement process, he failed. Oracle argues that the reasoning
behind this determination was flawed. First, the CO found that Mr. Ubhi did
not have the technical expertise to substantially influence the procurement.
Second, she concluded that his actual attempts to influence the procurement
were limited. Third, the key decisions were made after Mr. Ubhi recused
himself.
As to Mr. Ubhi’s technical expertise, or lack thereof, the record
reflects that Mr. Ubhi’ specialty was lead product manager. The CO placed
Mr. Ubhi’s participation in the broader context of the Defense Digital Service
team, which was only one team among at least half a dozen DoD
organizations that contributed to and reviewed the content of the JEDI Cloud
solicitation. Mr. Van Name explained in his GAO testimony that Mr. Ubhi
was indeed conversant in cloud computing, as one must be to work as an
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industry specialist in cloud computing. But his involvement early in the
planning stage of this procurement does not reflect any meaningful role in
crafting the technical aspects of this solicitation, particularly the gate criteria.
We are not aware of any step in the procurement that required his approval.
By the time DoD finished its decisions and amendments to Gate Criteria 1.2,
Mr. Ubhi had long since left DoD. In reality, the gate criteria, particularly
the security requirements, were crafted by a number of DoD teams which
focused on technical and security requirements. Mr. Ubhi’s primary role was
industry liaison; the record does not warrant attributing to him any serious
involvement in the technical or security aspects of the gate criteria.
While Oracle points to Mr. Ubhi’s loud advocacy for a single award
approach, real DoD decisionmakers had been independently in favor of a
single award approach both before and after Mr. Ubhi’s involvement. As
early as September 14, 2017, the Cloud Executive Steering Group (of which
Mr. Ubhi was not a member) expressed a preference for a single award
approach. On the other hand, after Mr. Ubhi left DoD, the Deputy Secretary
remained unconvinced regarding which approach to use; he was “[o]pen to
the first cloud contract being single source OR multiple source” and asked
for a “layout [of] all options and recommendations from Team Cloud” in
November 2017. AR 4352. The CO recalled being in a meeting in April
2018 in which “the single award decision was still being vigorously
debated.” AR 58721. Nor is it credible to suggest that Mr. Ubhi was steering
DoD toward AWS. Our narrative began with the visit to AWS (among other
cloud service providers) by DoD top brass, before Mr. Ubhi’s involvement
surfaces.
Ultimately, we find that the CO correctly concluded that although Mr.
Ubhi should have never worked on the JEDI Cloud procurement, his
involvement did not impact it. We are left with the firm conviction that the
agency was headed in the direction of a single award from the beginning,
indeed probably before Mr. Ubhi was enlisted to participate in the JEDI
Cloud project. The CO is fundamentally correct: if there was a high speed
train headed toward a single award decision, Mr. Ubhi was merely a
passenger on that train, and certainly not the conductor. Moreover, he exited
DoD prior to the substance of the evaluation factors being crafted. Although
the CO correctly found the assurances in his affidavit to be untrustworthy,
we ultimately agree with the substance of her conclusion that his self-
promoting, fabulist and often profanity-laced descriptions of his own role
were merely that.
2. Alleged Organizational Conflict of Interest
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Finally, Oracle turns to the CO’s assessment of AWS. Oracle argues
that the CO’s determination that AWS did not violate procurement integrity
law and does not have an unfair advantage lacks a rational basis. While
Oracle’s argument focuses on Mr. Gavin’s and Mr. Ubhi’s relationship with
AWS, even though the CO properly considered both Mr. Bouier’s and Dr.
Sutherland’s relationship with the company as well.
FAR Subpart 9 prescribes rules and responsibilities regarding
organizational conflicts of interest. “An organizational conflict of interest
may result when factors create an actual or potential conflict of interest on
an instant contract, or when the nature of the work to be performed on the
instant contract creates an actual or potential conflict of interest on a future
acquisition.” FAR 9.502(c) (2018). It is the CO’s responsibility to “[i]dentify
and evaluate potential organizational conflicts of interest as early in the
acquisition process as possible” and to “[a]void, neutralize, or mitigate
significant potential conflicts before contract award.” FAR 9.504(a). The
CO “should avoid creating unnecessary delays, burdensome information
requirements, and excessive documentation. The [CO’s] judgment need be
formally documented only when a substantive issue concerning potential
organizational conflict of interest exists.” FAR 9.504(d).
The CO should examine “[e]ach individual contracting situation . . .
on the basis of its particular facts and the nature of the proposed contract.”
FAR 9.505. “The exercise of common sense, good judgment, and sound
discretion is required in both the decision on whether a significant potential
conflict exists and, if it does, the development of an appropriate means for
resolving it.” Id. Relevant here, the CO should seek to prevent “unfair
competitive advantage.” Id. Such unfair advantage “exists where a contractor
competing for award of any Federal contract possesses—(1) Proprietary
information that was obtained from a Government official without proper
authorization; or (2) Source selection information . . . that is relevant to the
contract but is not available to all competitors, and such information would
assist that contractor in obtaining the contract.” Id.
Oracle argues that there can be no question that AWS had a
significant, actual conflict and that only extreme measures would eliminate
the conflict at this stage. It contends that the CO irrationally determined that
AWS could not derive an unfair competitive advantage from the information
Mr. Ubhi or Mr. Gavin brought with them to AWS. The government
responds that the CO properly determined that a significant potential conflict
did not exist, because there is no evidence—in the CO’s determination or that
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she missed—that indicates AWS possesses proprietary information or source
selection information not available to all competitors.
The CO’s conclusion that a conflict of interest did not exist was
sufficiently supported based on the facts presented to her. She specifically
considered whether the DoD employees who accepted jobs at AWS could
have, and did, communicate information to AWS that would give AWS an
unfair competitive advantage. She concluded that the information the three
individuals had could not offer an unfair competitive advantage and that, in
any event, there is no evidence that protected information was communicated
to AWS.
Her assessment began with whether AWS obtained source selection
information that is relevant, not available to all competitors, and would assist
AWS in winning the JEDI Cloud contract. The pertinent facts she considered
are that Mr. Ubhi participated in many JEDI Cloud meetings and assisted in
drafting several pre-RFP documents; he had access to the contents of the
Google Drive; Mr. Gavin participated in two meetings and viewed a limited
set of documents; and Dr. Sutherland apparently had access to some
documents through her work with the Joint Requirements Oversight Council.
The substance of the documents to which they had access, however, along
with the meeting notes, concerns DoD’s need to adopt cloud computing, the
disadvantages of not being able to access an enterprise cloud, the list the
cloud services DoD would need, and the processes for how to get to closure
in the procurement.
AWS could have contemporaneously gathered such information
through the November 2017 JEDI Cloud summary, the RFI, meetings with
the JEDI Cloud procurement team, and later through the draft RFP and the
final solicitation package, not to mention DoD’s 2017 meeting with AWS
prior to the kickoff of the JEDI Cloud procurement process. DoD was not
particularly secretive about its cloud services needs or its plan for the
solicitation. In fact, DoD involved industry from the beginning of this
procurement. At the time Mr. Ubhi and Mr. Gavin sought AWS
employment, no bids or other source selection information existed. We find
nothing irrational in the CO’s conclusion that Mr. Gavin and Mr. Ubhi did
not offer AWS an unfair competitive advantage based on their knowledge of
nonpublic information relating to the procurement.
Oracle also argues that Mr. Ubhi had nonpublic information regarding
AWS’s potential competitors, implying that he had imparted to AWS
“[p]roprietary information that was obtained from a Government official
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without proper authorization.” FAR 9.505(b)(1). There is no real support for
this supposition. The CO considered this issue and concluded that the
information Mr. Ubhi had access to could be accessed publicly. She also
concluded that Mr. Ubhi’s knowledge of Microsoft’s proprietary
information, submitted to DoD during its one-on-one meeting with the JEDI
Cloud team, could be accessed publicly. Moreover, none of the information
Oracle points out appears to be sensitive to Microsoft’s future offer or
approach to tackling the JEDI Cloud project. It is a reasonable conclusion
that AWS had access to the information with or without Mr. Ubhi.
In this case, there was a significant amount of communication and
negotiation between AWS and DoD employees. As in the case of the
individual conflicts of interest, the individuals, the company, and the agency
were slow to identify the potential this created for an organizational conflict,
particularly as it might relate to a procurement of this magnitude, and less
than aggressive in heading off potential harm. Nevertheless, our review is
not de novo. The question is whether the procurement was tainted, so as to
warrant a redo or possible exclusion of AWS, a question that lies, in the first
instance, in the hands of the CO. The issue for the court is whether she
properly exercised her discretion in concluding that AWS does not have an
organizational conflict of interest based on the facts as presented. We believe
she correctly focused on the significance of the potential conflict and whether
it gave AWS any competitive advantage. Her conclusion that the errors and
omissions were not significant and did not give AWS a competitive
advantage was reasonable and well supported.
CONCLUSION
Because the court finds that Gate Criteria 1.2 is enforceable, and
because Oracle concedes that it could not meet that criteria at the time of
proposal submission, we conclude that it cannot demonstrate prejudice as a
result of any other possible errors. Plaintiff’s motion for judgment on the
administrative record is therefore denied. Defendant’s and intervenor’s
respective cross-motions for judgment on the administrative record are
granted. The Clerk is directed to enter judgment for defendant. No costs.
s/Eric G. Bruggink
ERIC G. BRUGGINK
Senior Judge
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