The much-coveted contract to move the Pentagon’s information technology infrastructure to the cloud has suffered what appears to be a major setback. Federal News Network, a Washington-area radio station and website that focuses on federal contracting and workforce issues, reported last week that the FBI and the Department of Defense Inspector General have begun a “preliminary investigation” into the decision to select only a single vendor for the entire contract.
The Joint Enterprise Defense Infrastructure program, JEDI for short, could be worth as much as $10 billion over 10 years to the winning bidder. As you might expect, competition is fierce. Amazon Web Services already has a leg up on the competition, as it runs a $600 million cloud contract for the CIA. The size, and potential growth, of Amazon’s federal contracts were undoubtedly a factor in the selection of Crystal City, next door to the Pentagon, for the company’s second headquarters, dubbed HQ2.
Oracle filed a protest with the Government Accountability Office over the decision, which the GAO denied in November of last year. Oracle moved its protest to the Court of Federal Claims; while there hasn’t been a lot of buzz in the mainstream press around the case, there have been some interesting developments. On February 19, the court granted the government’s motion for a stay in the case, “while the Department of Defense reconsiders whether possible personal conflicts of interest impacted the integrity of the JEDI Cloud procurement.”
Subsequent court documents show that the government is looking into “whether possible conflicts of interest involving former DOD employee Deap Ubhi impacted the integrity of the procurement at issue, based upon new information provided to the contracting officer on February 12, 2019.” According to the government’s filing, Ubhi worked AWS until January 2016, when he came to work for the Defense Digital Service. (These are the guys who try to make their work in the Pentagon a little like working in Silicon Valley, naming their two office suites “Rebel Alliance” and “Alien Autopsy Room”).
Ubhi recused himself from the JEDI procurement in October 2016, when AWS entered talks to buy a startup, Tablehero, that Ubhi had helped found. A footnote in the motion states that Ubhi returned to work at AWS in November 2017. The government say his work on the JEDI program “was limited to market research activities,” but Oracle asserts that he played a central role in crafting the procurement and “zealously advocated for the single award approach.”
The court agreed not to take any further action in the case until the contracting officer completed her own investigation to determine if Ubhi’s entanglement with AWS created an organizational conflict of interest. If Ubhi was involved in the crafting of the solicitation and subsequently went to work for a company competing for the contract, that’s a major foul. The Federal Acquisition Regulations prohibit this type of arrangement.
In order to hire Ubhi legally, Amazon would have had to build what the industry calls a “firewall,” where he was kept separated from the team working on the JEDI contract. If he provided anyone at AWS with any non-public information regarding the solicitation, it could jeopardize the procurement program altogether.
Also at issue is whether another former AWS consultant, Anthony DeMartino, was improperly involved in JEDI decisions. DeMartino is a retired Army officer who served as chief of staff to Deputy Secretary of Defense (and now acting Secretary) Patrick Shanahan. In April 2017, the DOD’s Standards of Conduct Office told DeMartino to avoid involvement with JEDI without specific approval. He apparently ignored that direction, leading to an April 2018 SOCO directive that he recuse himself immediately.
It’s not clear if the FBI and the DoD IG investigation is related to these conflict of interest issues, or something larger. But the involvement of the department’s internal watchdog and the federal government’s top law enforcement agency cannot be a good sign for the program.