COFC decision denying Oracle’s protest of DoD’s JEDI procurement is affirmed. Oracle alleged that DoD had erred in deciding to award the JEDI contract tp a single contractor instead of making multiple awards. The court found that even if DoD had made an error deciding to go with a single award, Oracle had not been prejudiced; regardless of whether DoD used a single or multiple-award procurement, Oracle could not satisfy a material solicitation requirement and thus did not have a substantial chance of receiving award. Oracle also challenged the solicitation requirement it could not satisfy, arguing that the requirement was restrictive and violated the government’s obligation to conduct full and open competition. The court disagreed, reasoning that while the requirement may have excluded some offerors, the solicitation was still open to all responsible offerors. Finally, Oracle alleged the procurement was tainted by conflicts arising from DoD employees who had either worked for or ended up working for another offeror. While noting that the conduct of these agency employees was troubling, the court found that they had not tainted the integrity of the procurement.
The Department of Defense issued the Joint Enterprise Defense Infrastructure (JEDI) solicitation, seeking long-term enterprise-wide could computing services. The solicitation contemplated award of ten year IDIQ contract to a single provider.
The solicitation included several preliminary gate provisions that a offerors had to satisfy. One of these provisions, Gate 1.2, required the contractor to have three existing cloud offering data centers within the U.S. Those data centers had to have completed the Federal Risk and Authorization Management Program (FedRAMP) Moderate authorization process. FedRAMP Moderate Authorized was DoD’s minimum security level for processing or storing sensitive information.
Oracle America, Inc., which did not satisfy the FedRAMP Moderate authorized requirement, filed a protest with the Court of Federal Claims (1) challenging DoD’s decision to award the contract to a single provider, (2) objecting to inclusion of Gate 1.2 requiring FedRAMP Moderate Authorization, and (3) alleging that former DoD employees who had worked or who went to work for another offeror, Amazon Web Services (AWS), had a conflict of interest.
The COFC denied the protest. The court found that while the solicitation did not satisfy the statutory exception for a single-source award relied on by DoD, Oracle had not been prejudiced by the error. The court further found that the inclusion of the Gate 1.2 requirement was reasonable and enforceable. Finally, the COFC concluded that while the behavior of the former DoD employees involved in the procurement had been troubling, it did not amount a to conflict of interest. Oracle appealed the COFC decision to the Federal Circuit.
Oracle alleged on appeal that DoD had committed legal error when it elected to award the JEDI contract to a single contractor. Under 10 U.S.C. § 2304, Congress has stated that to the maximum extent practicable, agencies should make multiple awards for the same or similar services under one IDIQ contract. That section further provides that an agency must make certain determinations before making a single award to one contractor.
DoD had determined that a single award was appropriate because the contract provided for firm fixed price task orders. The COFC, however, had found that JEDI procurement did not provide for firm, fixed price task orders because the solicitation contained provisions to supply unspecified services in the future. Nevertheless, the COFC determined that Oracle had not been prejudiced by DoD’s error. Even if DoD had made multiple awards, the COFC reasoned, the agency still would have required FedRAMP Moderate Authorization under Gate 1.2. Oracle could not satisfy Gate 1.2 and thus did not have a reasonable chance of receiving award.
Citing SEC v. Chenery Corp., 318 U.S. 80 (1943), Oracle argued that the COFC had erred in accepting the government’s argument that it would have still imposed Gate 1.2 even it had issued a multiple award solicitation. Under Chenery, judicial review of agency action is limited to the grounds the agency took when it invoked the action. Oracle contended that the COFC should not have decided that DoD would have still included Gate 1.2 in a multiple award procurement. Rather, Oracle, alleged, the COFC should have remanded to the agency to make that decision itself
But the Federal Circuit held that a court is not required to remand under Chenery when the error in question has no bearing on the substance of the government’s decisions. In light of the COFC’s careful consideration of the record and its conclusion that DoD would have included Gate 1.2 even if it modified the solicitation for multiple awards, the court would not disturb the COFC’s decision.
Next, Oracle contended that the inclusion of Gate 1.2 turned the procurement into an acquisition that did not use competitive procedures in violation of 10 U.S.C. § 2304. Oracle asserted that DoD knew that only two offerors, AWS and Microsoft, could satisfy Gate 1.2. Thus, the decision to include Gate 1.2 was the equivalent of prohibiting parties other than AWS and Microsoft from submitting offers.
The court, however, reasoned that a solicitation is not objectionable simply because it excludes some offerors. Full and open competition means that all responsible sources are permitted to submit a proposal. Even if an agency expects only that certain firms will be able to satisfy its minimum needs, a solicitation can still permit all responsible offerors to submit a proposal. Here, the inclusion of Gate 1.2 did not prohibit any responsible offerors from submitting a proposal.
Oracle also alleged that Gate 1.2 violated 10 U.S.C. § 2319, which requires written justification when DoD imposes a “qualification requirement” in a solicitation. But the court held that COFC had correctly found that Gate 1.2 was not a qualification requirement. A qualification requirement is an extraneous requirement that is not directly tied to the needs of the procurement. This is different than an intrinsic requirement that ensures the contractor can satisfy the direct needs of the procurement. The court concluded that Gate 1.2 was an intrinsic requirement that ensured the company was ready to perform on the first day of the contract. Because, Gate 1.2 was not an extrinsic qualification requirement, there was no need for a written justification.
Oracle further argued that Gate 1.2 was unreasonable and unduly restricted competition. The court disagreed, reasoning that it will not second-guess an agency’s assessment of its needs. Indeed, the court noted, as an appellate court, it was even further removed from the detailed assessment of DoD’s needs than the COFC and thus even more hesitant to override the agency’s judgment.
Oracle also contended on appeal that the solicitation should be set aside due to the conflicts on the part of former DoD employees that tainted the procurement. First, Oracle alleged there was a conflict involving Deap Ubhi, who worked for AWS until 2016 and then worked for DoD for a about a year in marketing research activities for the JEDI procurement. At some point during his DoD employment, Ubhi recused himself from the JEDI project claiming that a company he had created was involved in discussions with Amazon. It turned out this representation was false; Ubhi had actually been negotiating for employment with AWS. While COFC had found that Ubhi’s behavior was troubling, it agreed with the contracting officer that he had not tainted the procurement.
The court agreed with the COFC. It did not appear that Ubhi had any impact on DoD’s decision to go with a single rather than multiple-award procurement. There was an expressed preference among decisionmakers for a single award while Ubhi worked at DoD, but debate had continued on that issue after he left. There was no indication that his seven-week involvement in the procurement had affected the decision to use a single-award approach. Additionally, while Ubhi edited some solicitation documents, his influence and direct edits were minimal. Moreover, there was no evidence that Ubhi had disclosed any competitively useful non-public information. When he was rehired by AWS, he was not part of the of company’s JEDI proposal team, and he was subject to firewalls that prevented his involvement in the procurement
Oracle also alleged that another former DoD, Anthony DeMartino, had conflict. DeMartino had worked at AWS before becoming the Deputy Chief of Staff for the Secretary of Defense and the Chief of Staff for the Deputy Secretary of Defense. In those positions, DeMartino had some involvement in the JEDI procurement. But his involvement was ministerial and perfunctory. He provided no input on the acquisition documents. What’s more, DeMartino had later recused himself from involvement in the procurement. The court held that his involvement did not impact the procurement.
Finally, Oracle contended that a third former DoD employee, Victor Gavin, had a conflict. While Gavin worked as Deputy Assistant Secretary for the Navy he negotiated a job with AWS. Still, Gavin had limited access to acquisition documents, did not provide any input into acquisition documents, did not bias any of the JEDI meetings he attended, and did not disclose any competitively useful information to AWS. While negotiating a job with AWS was inappropriate, Gavin had not impacted the procurement.
Oracle is represented by Craig Holman, Kara L. Daniels, Nathaniel Edward Castellano, and Amanda J. Sherwood. The intervenor, Amazon Web Services, is represented by Daniel Ruben Forman, Olivia Louise Lynch, Zachary H. Schroeder, and Gabrielle Trujillo of Crowell & Moring as well as Mark Andrew Perry of Gibson, Dunn & Crutcher, LLP. The government is represented by William Porter Rayel, Ethan P. Davis, Robert Edward Kirschman, Jr., and Patricia M. McCarthy of the Department of Justice.
