Oracle Replies ‘Agencies are Fallible’ in $10B DOD Contract SCOTUS Petition

On Monday, Oracle America Inc. responded to the federal government in the parties’ dispute over the propriety of a U.S. Department of Defense (DOD) cloud-computing procurement. Oracle claims that the 10-year, multi-billion dollar Joint Enterprise Defense Infrastructure (JEDI) cloud contract—among the largest information-technology contracts in the federal government’s history—has an unlawful structure, and was secured through agency officials’ criminal misconduct.

In its late January petition for a writ of certiorari, Oracle explained that it filed in the U.S. Court of Federal Claims arguing that the single-bidder award violated federal law, which requires agencies to choose multiple bidders for contracts of JEDI’s size and type. The U.S. subsequently appealed the decision, and the Federal Circuit Court of Appeals took up the case. The appellate tribunal reportedly agreed with Oracle that the procurement violated federal law, yet declined to remand the issue to the agency.

Instead, the Federal Circuit upheld the procurement, finding that even if it had been structured as a multiple-award solicitation, Oracle would not have stood a better chance of obtaining the contract. In addition, and through the bidding process, the DOD reportedly uncovered “serious conflicts of interest” between a leading bidder and its own employees. Yet, the Federal Circuit found, in deference to the DOD’s assessment, that the conflicts had not “tainted” the bidding process.

In this week’s brief, Oracle asserted that both the harmless error and conflicts of interest ruling warranted Supreme Court review. In determining that the harmless error doctrine shielded the DOD from liability, the appellate court’s opinion purportedly “inverts fundamental separation-of-powers principles: It urges judicial intervention where Congress mandated agency decision-making, and judicial abdication where Congress required oversight.” 

As to the conflicts ruling, Oracle contended that the contract should have been set aside to protect the public from corruption that could have come to bear. The petition will be distributed to the Justices for conference on June 3.

Oracle is represented by Arnold & Porter Kaye Scholer LLP. The Department of Defense is represented by attorneys with the U.S. Department of Justice.