Amazon may have influenced the federal government’s decision-making process on a $10 billion defense contract it was bidding by secretly offering one of the Pentagon officials involved in the deal a job, as reported by the Intercept.
On Monday, details emerged in a lawsuit brought against the federal government by Oracle Corp. alleging the bidding process for the Joint Enterprise Defense Infrastructure (JEDI) contract was rigged in Amazon’s favor. At $10 billion JEDI is set to be one of the largest federal contracts ever awarded, with the vendor being responsible for all Department of Defense (DOD) cloud computing services.
Oracle filed its suit earlier this year after it was eliminated from the bidding process, along with IBM, for failing to meet DOD criteria. The move came after the DOD required bidders be capable of fulfilling the contract on their own, without outsourcing any work to third parties. Although the contract has yet to be awarded, only two organizations that placed a bid—Amazon and Microsoft—have the capacity to handle execution on their own.
In its suit, Oracle accused Amazon of extending job offers to at least two Pentagon employees involved in crafting the contract. One of those employees, Deap Ubhi, is a former high level employee of the DOD’s technology unit who was part of the four-person team responsible for overseeing the JEDI deal. The other employee is an unnamed former Navy official. Both individuals, according to Oracle’s court filings, remained involved in shaping the contract even after they formally accepted employment offers with Amazon Web Services.
A court motion Oracle filed on Friday expanded on Ubhi’s alleged role. The motion claims that while Ubhi was involved in the contract’s “preliminary research phase” over the summer and fall of 2017, he was also in talks for a job with Amazon. Ubhi, who worked at e-commerce giant prior to joining the DOD, reportedly began negotiating his return to Amazon in August 2017. It wasn’t until September, however, that “deep discussions” began to take place regarding salary, signing bonus, and “lucrative stock options.”
Oracle has furnished workplace messages showing at the time Ubhi was instrumental in convincing his colleagues to seek the services of a single vendor capable to fulfilling the entire contract. The move is seen as being beneficial to large bidders like Amazon and Microsoft who have the capacity to meet such a need.
Oracle alleges Ubhi “verbally committed” to a job offer from Amazon on October 4, 2017, but continued in his role until October 31, 2017. In that time span, Ubhi continued to receive information about companies bidding for the contract and took part in meetings about the contracts “technical requirements.”
When Ubhi did finally recuse himself, the reason he gave was that Amazon had offered to buy his startup company.
It is unclear if the new developments will cause the DOD to re-evaluate its bidding process. The Pentagon is expected to award the contract before July 19.
The news about Oracle’s suit came on the same day that the House Judiciary Committee announced it would launch a “top-to-bottom” anti-trust investigation of Amazon and other big tech companies.
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