A lawsuit by Oracle Corp. that challenges the U.S. Department of Defense’s hotly contested $10 billion cloud computing contract is on hold so the agency can continue to probe potential conflicts of interest.

U.S. Court of Federal Claims Senior Judge Eric Bruggink late Tuesday issued a stay of Oracle’s case to give the DOD time to finish its investigation of new information related to the contract, known as Joint Enterprise Defense Infrastructure or JEDI.

The Pentagon plans to spend $10 billion on cloud infrastructure over the next decade under the yet-to-be-awarded contract. Oracle Corp. filed suit over the deal last year, arguing that the bid review process unfairly favors rival Amazon Web Services Inc. in potential violation of federal regulations.

AWS is widely seen as the front-runner to win the contract. That’s likely still the case even with these latest developments, though the timing of the award could be affected.

The DOD’s probe was already ongoing, according to SiliconANGLE’s examination of government and court filings, so the only new wrinkle now is that the DOD said it’s looking into unspecified new information that has arisen. “DOD can confirm that new information not previously provided to DOD has emerged related to potential conflicts of interest,” DOD spokesperson Elissa Smith said in a statement. “As a result of this new information, DOD is continuing to investigate these potential conflicts.”

As a result, Bruggink wrote in his order, “For good cause shown, the court grants the government’s unopposed motion to stay this case while the Department of Defense reconsiders whether possible personal conflicts of interest impacted the integrity of the JEDI Cloud procurement.” Essentially, the court is waiting until the DOD concludes its standard “Organizational Conflicts of Interest” investigation before it makes a ruling.

It’s not clear what the new information is. Oracle’s suit claims that two DOD staffers involved in the JEDI contract have ties to AWS with the potential to compromise the bidding process. The suit levels the most serious accusations against a DOD staffer by the name of Deap Ubhi, who has since recused himself from the contract. Oracle alleged that Ubhi, a former AWS employee, had made disparaging remarks about the other companies competing for JEDI.

In court filings examined by SiliconANGLE, both AWS and DOD have opposed Oracle’s discovery motion on those issues. AWS said Ubhi was one of “many” of the DOD’s Defense Digital Service employees supporting initial market research efforts in late 2017, after which he voluntarily recused himself and had no other involvement in JEDI.

The DOD’s opposition was even more blunt. “Oracle seeks to engage in a broad fishing expedition primarily to find support for its claim” that the deal is tainted by alleged conflicts of interest involving Ubhi and Anthony DeMartino, former chief of staff to the deputy secretary of defense. “The idea that … Mr. Ubhi could have steered the JEDI requirement away from DoD’s actual needs and toward Amazon during their limited involvement is illogical.”

However, details surrounding Ubhi were already known from Oracle filings, so it’s not yet clear if the “new information” involves Ubhi or something else. Oracle and AWS declined to comment because of the pending litigation.

Oracle’s suit also takes issue with the winner-takes-all structure of the contract. The company has been trying to split up JEDI among multiple providers by arguing that granting the entire deal to one bidder would violate government procurement regulations, as well as go against industry best practices. Both the DOD and the U.S. Government Accountability Office have rejected these arguments.

According to the Court of Federal Claims stay order, the government must file a status report with the court within five days of the DOD’s final decision on the contract. It’s not clear whether this latest delay will affect the timing of the contract award, which the DOD had hoped to make in April.

With reporting from SiliconANGLE staff

Photo: gregwest98/Flickr