Oracle (ORCL) - Get Report is appealing an unfavorable ruling in a high-stakes battle for a lucrative Pentagon contract that could be worth as much as $10 billion.
The contract, referred to as JEDI (Joint Enterprise Defense Infrastructure Cloud), is an exclusive cloud computing deal that several tech giants had competed for, including Oracle, Microsoft (MSFT) - Get Report , Amazon (AMZN) - Get Report and IBM (IBM) - Get Report . In December, Oracle sued the Defense Department alleging that the JEDI bidding process unfairly favored Amazon. In July, however, the Court of Federal Claims ruled in favor of the Defense Department, concluding that Oracle did not meet the contract's qualifications.
"The Court of Federal Claims opinion in the JEDI bid protest describes the JEDI procurement as unlawful, notwithstanding dismissal of the protest solely on the legal technicality of Oracle's purported lack of standing," said Dorian Daley, Oracle's general counsel, in a statement about the appeal. "Federal procurement laws specifically bar single award procurements such as JEDI absent satisfying specific, mandatory requirements, and the Court in its opinion clearly found DoD did not satisfy these requirements. The opinion also acknowledges that the procurement suffers from many significant conflicts of interest. These conflicts violate the law and undermine the public trust. As a threshold matter, we believe that the determination of no standing is wrong as a matter of law, and the very analysis in the opinion compels a determination that the procurement was unlawful on several grounds."
Microsoft and Amazon are reportedly the final companies still in the running for the contract, but the Pentagon announced in early August that the contract award will be delayed, shortly after President Trump complained to reporters about the bidding process.
Shares of Oracle rose 1.7% on Monday to $52.13 and are up 14% year to date.
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