Oracle Loses Challenge to $10 Billion Pentagon Cloud Contract

Oracle lost its legal challenge to the Pentagon’s $10 billion cloud contract, clearing the way for the government to award the contract to Amazon or Microsoft, according to Bloomberg.

Federal Claims Court Senior Judge Eric Bruggink dismissed the company’s argument that the contract violates federal procurement laws and is unfairly tainted by conflicts of interests. Bruggink said that because Oracle didn’t meet the criteria for the bid, it “cannot demonstrate prejudice as a result of other possible errors in the procurement process.“

The decision is a major blow to Oracle, which risks losing a share of its federal defense business if the Pentagon awards the contract to another cloud company. The ruling eliminates a headache for the Pentagon, which has been fending off challenges to its winner-take-all strategy in the cloud contract for more than a year.

Oracle looks forward to “working with the Department of Defense, the Intelligence Community, and other public sector agencies to deploy modern, secure hyperscale cloud solutions that meet their needs,“ company spokeswoman Deborah Hellinger said in a statement. She didn’t comment on whether the company plans to appeal the decision.

The project, known as Joint Enterprise Defense Infrastructure cloud , or JEDI, an acronym intended to evoke “Star Wars“ imagery, is intended to be the Defense Department’s general-purpose cloud for most of its systems and applications. The Pentagon is investing in commercial cloud services to consolidate its existing technology products, embrace AI and machine learning, and enhance its technical capabilities on the battlefield.