Now that Oracle has been officially eliminated from the Joint Enterprise Defense Infrastructure (“JEDI”) RFP process, they are pushing forward with their lawsuit against the Department of Defense (DoD). Oracle previously filed a lawsuit at the time the RFP was issued last November alleging that the award process for the $10B Pentagon JEDI cloud initiative is unfair and violates federal procurement law. In short, Oracle is claiming to be a victim in a rigged RFP and procurement process.
Oracle has now come forward claiming that three of the seven “gate criteria” for being down selected to the next round exceeds the needs of the DoD, and that the gate criteria should have been written to address the DoD’s actual minimum requirements.
Think about how ridiculous that sounds. We are talking about our national defense and the need to narrow down qualified bidders to determine and select the best long-term solution.
- Is this really how we should approach national defense, by just evaluating the bare minimum requirements?
- How about selecting a vendor who has the capabilities to grow with the DoD, or one that has a more robust solution offering with greater scalability to handle unforeseen circumstances and potential future requirements?
It would appear foolish to try to evaluate and select a vendor based on the bare minimum requirements or lowest common denominator without considering potential future needs.
Oracle’s complaint comes across like a whiny child or jilted lover. First, Oracle does not get to determine the bare minimum requirements for this project — that is the DoD’s job. I am sure the DoD understands their requirements better than Oracle.
Second, why would the people at the DoD responsible for the JEDI project want to work with Oracle now? Even if Oracle were to win the lawsuit, it is difficult to fathom how forcing Oracle back into the selection process would result in them winning.
Additionally, if Oracle somehow did win the initiative, the tension between Oracle and the DoD would be so great that it would add enormous risk to the project, practically guaranteeing delays and some level of failure, which could be disastrous to our national defense.
Conflict of Interest
Oracle is also complaining that two DoD employees had previously worked for AWS, which created a conflict of interest that intentionally and improperly skewed the RFP gate criteria to favor AWS and Microsoft Azure. One of the individuals was a project manager who was recruited by the DoD in the summer of 2016, had his project credentials revoked prior to any discussions with AWS, and then left the DoD to return to AWS in November of 2017, a year prior to the issuance of the RFP.
The other individual who served as Chief of Staff for the Deputy Secretary of Defense was previously an AWS consultant. He is alleged to have participated in JEDI cloud discussions for months before being removed from the JEDI cloud procurement, which according to Oracle irreparably damaged the procurement process. The DoD has stated that they conducted a conflict of interest investigation into the matter and did not find anything that tainted the procurement process.
This claim by Oracle just comes across as sour grapes. First, the DoD seeks to hire highly skilled people with the requisite subject matter expertise. Naturally, this will lead to some people being hired who have worked for software and IT services vendors.
Second, is it even plausible that these two individuals, given their limited time on the project and the scope and size of this potential $10B initiative, would be able to wield such influence over the RFP development and selection process as to effectively eliminate Oracle from consideration? I have advised dozens of clients on cloud initiatives much smaller than this one, and the size of those evaluation teams were significant and included cross functional team members along with senior and executive management participation, oversight, and approval. I have never witnessed a situation where two recent hires controlled the procurement process to such an extent as Oracle is claiming here.
Further, the federal government has rules regarding conflict restrictions and clearly defined policies in place to guard against them occurring. The DoD also proceeded with a highly competitive RFP process, with one of the alleged conflicted individuals having left the DoD a year prior to the RFP issuance. This hardly seems like a rigged process. I mean, we are not talking about a co-CEO of one of the participating vendors serving on the President and Commander in Chief’s transition team type of influence.
I am sure Oracle has had prior relationships with public sector employees whose departments awarded business to Oracle before. Situations where some members of an RFP selection committee are previous employees of a vendor under consideration are bound to occur. But a rigged process requires key decision makers to be unduly influenced and coerced into selecting or not selecting a particular vendor.
In this case, a vendor selection has yet to be made, and the two individuals alleged to be conflicted were either no longer with the DoD or no longer participating in the RFP process prior to its issuance. Plus, Oracle filed the lawsuit immediately after receipt of the RFP. Perhaps Oracle would have been better served utilizing its vast resources to compete in the RFP process as opposed to initiating litigation. Why would any selection committee choose a vendor who is suing them?
Meaning and Impact
The bottom line is Oracle brought this upon themselves by not having a strong enough solution offering that meets the DoD’s RFP requirements. Rather than competing and risk publicly losing to two of their main rivals who are experiencing tremendous cloud revenue growth, Oracle chose a path guaranteed to get them removed from the RFP process and allowing them to play the victim card.
In turn, Oracle can still make claims of solution superiority in hopes of winning future cloud deals. However, once a known bully backs down from competition and cries foul, the damage is done and the image is difficult to erase. No amount of whining is going to change the DoD’s decision not to select Oracle, and the ramifications for Oracle have the potential to be widespread and long-lasting.
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