Oracle Loses Legal Appeal Over $10B Government Cloud Contract

Tech giant Oracle Corporation ORCL was eliminated from a contract with the U.S. government in April and has lost a legal challenge it mounted over the decision, Bloomberg reported Friday.

The Pentagon eliminated Oracle from a four-way bidding process with a $10-billion cloud contract on the line as part of the Joint Enterprise Defense Infrastructure (JEDI) initiative.

Following the decision, Oracle argued in a legal appeal with the Federal Claims Court that the contract violated federal procurement laws given conflicts of interest with rival bidder Amazon.com, Inc. AMZN.

Oracle presented evidence to support its claim that Amazon negotiated a job offer with a Department of Defense official who played a key role in the bid.

The worker in question, Deap Ubhi, was negotiating terms of employment with Amazon while simultaneously participating in JEDI-related meetings where he was privy to technical requirements, according to The Intercept.

Senior Judge Eric Bruggink said in his ruling that Oracle didn't satisfy the criteria needed for the bid, so it is not in a position to "demonstrate prejudice as a result of other possible errors in the procurement process," according to Bloomberg. 

Shares of Oracle were down 0.77% at $59.53 at the time of publication Friday. 

Amazon remains in the bidding process along with Microsoft Corporation MSFT, with the winner expected to be announced in August.

Related Links:

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