Request for a preliminary injunction pending the resolution of protest is granted. The court found that the awardee, Microsoft, had failed to propose a requirement mandated by the solicitation, which should have rendered its proposal unacceptable. As a result, the protester, Amazon, was likely to succeed on the merits of its protest. The court found also found that Amazon as likely to suffer irreparable harm—in the form a competitive disadvantage—if injunctive relief was not granted. While the balance of harms slightly favored the government, the court found that Amazon could mitigate this harm by paying a hefty $42 million injunction bond.
The Department of Defense issued the Joint Enterprise Defense Infrastructure (JEDI) solicitation, which seeks to upgrade and consolidate the agency’s cloud computing system. The solicitation required offerors to submit price proposals based on various factual scenarios. The solicitation instructed offerors to assume that all the data in the price scenarios was “highly accessible.”
In response to questions from offerors, DoD defined “highly accessible” as “online and replicated storage.” The solicitation defined online storage that is immediately accessible to applications. Replicated storage refers to the practice of making multiple copies of data.
Amazon Web Services and Microsoft Corp., among others, submitted proposals in response to the JEDI solicitation. In response to Price Scenario 6—which required offerors to propose prices for a “Containerized Data Analysis Framework” scenario—Amazon proposed an online storage as required by the solicitation. Microsoft did not propose online storage for that scenario. (Due to redactions, it is not clear what kind of storage Microsoft proposed, only that it was not online.)
Despite not proposing online storage for scenario 6, DoD selected Microsoft for award. Amazon filed a protest with the Court of Federal Claims, arguing, among other arguments, that Microsoft’s failure to propose to online storage should have rendered its proposal unacceptable. After filing its protest, Amazon asked the court to issue a preliminary injunction to prevent DoD from proceeding with the contract until the protest was resolved.
The court analyzed each of the injunctive relief factors. As to the first factor, likelihood of success on the merits, it was undisputed that the solicitation required offerors to propose highly accessible or online storage, and Microsoft had not proposed online storage. The government claimed that the storage that Microsoft proposed, while not online, was still highly accessible. But the court noted that DoD did not identify Microsoft’s storage as highly accessible in any part of the evaluation record.
The government also argued that it had discretion to accept Microsoft’s non-online storage so long as it was technically feasible. The court, however, noted that DoD had not explained how its discretion could allow the agency to depart from an explicit definition of the term “highly accessible.”
The government further argued that even if Microsoft’s proposal was deficient, Amazon’s proposal suffered from the same deficiencies. The court noted that even if this was the case, it did not necessarily lead to the conclusion that either deficiency should be overlooked. Regardless, the record did not support this argument. The fact remained, Amazon’s approach relied primarily on online storage.
The court concluded that DoD had erred in accepting Microsoft’s approach.
Having found that DoD erred, the court also found that Amazon had been prejudiced by the error. The court reasoned that Microsoft’s failure to propose a highly accessible approach should have resulted in the assignment of a deficiency and eliminated it from the competition. Moreover, even if the deficiency would not have eliminated Microsoft, it appeared that Microsoft had achieved a price advantage by not proposing online storage.
As to the second injunction prong, the court found that Amazon was likely to suffer irreparable harm without injunctive relief. Amazon had identified specific losses including loss of competitive advantage in any renewed competition and damage to its ability to serve its customers. The government argued that DoD could take action in a renewed competition to neutralize any competitive advantage. The court rejected this, reasoning that it could not accept an agency’s prospective offer to mitigate a present irreparable harm.
With respect to the third prong, the balance of hardships, the court found the balance weighed slightly against Amazon. The court appreciated that a delay in the JEDI program could have an impact on national security and increased costs. But the court found that the delay in the JEDI program would simply require DoD to continue using the means by which it is presently accomplishing its missions until the court could determine whether the procurement was properly conducted.
As to final injunction factor, the public interest, the court that the public interest weighed in favor of Amazon. The court noted that it took seriously the national security concerns implicated by the JEDI program. Nevertheless, the court found that the benefits of the JEDI program were not so urgent that the court should not review the acquisition process to ensure integrity of the procurement.
Although the court found that Amazon was entitled to injunctive relief, it required Amazon to post security to cover any damages that result from the injunction. DoD figured that delay in implement the JEDI program would cost DoD about $7 million per month. Reasoning that it may take up to six months to resolve the protest, the court ordered Amazon to post a bond of $42 million to cover the anticipated costs of the injunction.
Amazon is represented by Kevin P. Mullen, J. Alex Ward, Daniel E. Chudd, Sandeep N. Nandivada, Caitlin A. Crujido, Alissandra D. Young, Andrew S. Tulumello, Daniel P. Chung, Theodore J. Boutrous, Jr., Richard J. Doren, and Eric D. Vandevelde. The intervenor, Microsoft, is represented by Robert S. Metzger, Jeffery M. Chiow, Neil H. O’Donnell, Lucas T. Hanback, Stephen L. Bacon, Deborah N. Rodin, Cassidy Kim, Eleanor M. Ross, Kathryn H. Ruemmler, Abid R. Qureshi, Roman Martinez, Anne W. Robinson, Dean W. Baxtresser, Genevieve Hoffman, Riley Keenan, and Margaret Upshaw. The government is represented by Anthony F. Schiavetti, Joseph H. Hunt, Robert E. Kirschman, Jr., and Patricia M. McCarthy of the United States Department of Justice as well as Michael G. Anderson and Benjamin M. Diliberto of the Defense Information Systems Agency.
