Oracle America is alleging two Defense Department officials helped craft a single-award strategy for the Pentagon's $10 billion cloud program while having "significant" conflicts of interest tied to their work with Amazon Web Services.
The allegations are detailed in a seven-count, 97-page complaint Oracle filed in the Court of Federal Claims last week challenging the Pentagon's Joint Enterprise Defense Infrastructure solicitation. A redacted, unsealed version of the complaint was filed Monday.
The lawsuit for the first time lays bare claims that DOD officials had conflicts of interest and potentially steered the acquisition toward a strategy favorable for AWS. The allegations have swirled around the JEDI procurement for more than a year.
A DOD spokeswoman told Inside Defense the department would not comment on pending litigation.
Today, AWS motioned to intervene as a defendant in the Court of Federal Claims case. An AWS spokeswoman declined to comment.
Oracle's lawsuit names two former DOD employees: Deap Ubhi, a former Defense Digital Service expert at the Pentagon, and Anthony DeMartino, who served as deputy chief of staff to Defense Secretary Jim Mattis and then chief of staff to Deputy Defense Secretary Pat Shanahan.
The lawsuit argues the Pentagon failed to properly investigate and mitigate their conflicts of interest. Ubhi had previously worked for Amazon, and after leaving DDS, he joined the company again. Meanwhile, DeMartino had consulted on behalf of AWS prior to joining the Pentagon.
The Government Accountability Office last month dismissed Oracle’s bid protest against the JEDI solicitation, including its arguments about Ubhi's and DeMartino's conflicts of interest, respectively.
In its decision, GAO wrote, "even if we were to conclude that either the Chief of Staff or the Digital Service Expert meaningfully participated in the agency's determinations regarding the RFP requirements, it would be improper for our Office to recommend that the agency proceed with the JEDI Cloud procurement in a manner that is inconsistent with meeting its actual needs."
However, Oracle's arguments about the conflicts could carry more weight with GAO after DOD makes an award. GAO's decision states, "we have recognized that, in post-award protests involving the award to a contractor that has hired a former government employee who possesses competitively useful non-public information, our office will presume prejudice 'without the need for an inquiry as to whether that information was actually utilized by the awardee.'"
The Pentagon is expected to make an award for the JEDI cloud program in April 2019.
Meanwhile, Oracle's case in the Court of Federal Claims could move forward this week, as a "status conference" is scheduled for Thursday, according to the case docket.
In September 2017, Shanahan directed DDS to lead the department's new initiative into the cloud. Ubhi was named the "lead" program manager on a four-person DDS team working on the initiative, according to Oracle's lawsuit before the Court of Federal Claims.
Ubhi helped define the JEDI cloud requirements, contributed to the business case analysis, met with various DOD stakeholders about their cloud-related needs and participated in developing the acquisition strategy, according to Oracle's lawsuit.
Additionally, Ubhi met with potential competitors for the JEDI cloud to discuss their capabilities, according to the suit. It states he held "highly technical" meetings with vendors including AWS, Google, Microsoft, "and others."
According to the complaint, Ubhi "drove and advocated the single source cloud structure" as lead PM.
Ubhi was first employed at AWS until January 2016, according to the lawsuit, prior to joining DDS and well before the Pentagon began exploring a large-scale migration into the cloud.
But the lawsuit alleges DOD failed to investigate allegations that AWS expressed an interest in purchasing a start-up owned by Ubhi while he was involved in the cloud project. In an Oct. 31, 2017, letter, Ubhi recused himself from the DOD cloud initiative, stating he "may soon engage in further partnership discussions" with AWS, according to the lawsuit.
Oracle's lawyers highlight the word "further" in the suit, arguing it reveals Ubhi and AWS had discussions prior to the recusal.
Then in November 2017, shortly after recusing himself, Ubhi left DDS to return to work for Amazon, according to the lawsuit. Ubhi remains there today as a general manager for AWS cloud, according to his Twitter profile. He could not be reached for comment through an AWS representative.
Oracle alleges the DOD contracting officer failed to properly investigate and mitigate Ubhi’s potential conflicts of interest. She did not investigate Ubhi's recusal beyond what was stated in his letter, while her investigation "does not assess or even mention Ubhi's re-employment by AWS at all," according to the lawsuit.
Meanwhile, DeMartino previously consulted for AWS while he worked for SBD Advisors, according to the lawsuit. He left SBD Advisors in January 2017 and subsequently joined DOD.
Oracle alleges DeMartino's involvement in the JEDI procurement "violated the U.S. Code and ethical regulations." The lawsuit states he participated "personally and substantially" by advocating procurement strategies, participating in meetings and briefings, editing official communications and other procurement-related documents.
In April 2017, before DOD's cloud push began, DeMartino received an ethics letter from the department's Standards of Conduct Office (SOCO) warning him he may have a regulatory prohibition on participating in matters related to Amazon and any other entity for which he had previously served as a consultant, according to the lawsuit.
It alleges he did not follow SOCO's direction and participated in the JEDI cloud procurement for over six months. In April 2018, SOCO instructed DeMartino to recuse himself from the acquisition, according to the suit.
Oracle alleges the contracting officer again failed to investigate and mitigate DeMartino's conflict of interest. It states she did not talk to SOCO and hadn't seen the office's warning.
DeMartino is currently an adjunct senior fellow in defense program at the Center for a New American Security. He could not be reached for comment through a CNAS representative.