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New conflict evidence surfaces in JEDI cloud contract procurement process

For months, the drama has been steady in the Pentagon’s decade-long, $10 billion JEDI cloud contract procurement process. This week the plot thickened when the DOD reported that it has found new evidence of a possible conflict of interest, and has reopened its internal investigation into the matter.

“DOD can confirm that new information not previously provided to DOD has emerged related to potential conflicts of interest. As a result of this new information, DOD is continuing to investigate these potential conflicts,” Elissa Smith, Department of Defense spokesperson told TechCrunch.

It’s not clear what this new information is about, but The Wall Street Journal reported this week that senior federal judge Eric Bruggink of the U.S. Court of Federal Claims ordered that the lawsuit filed by Oracle in December would be put on hold to allow the DOD to investigate further.

From the start of the DOD RFP process, there have been complaints that the process itself was designed to favor Amazon, and that were possible conflicts of interest on the part of DOD personnel. The DOD’s position throughout has been that it is an open process and that an investigation found no bearing for the conflict charges. Something forced the department to rethink that position this week.

Oracle in particular has been a vocal critic of the process. Even before the RFP was officially opened, it was claiming that the process unfairly favored Amazon. In the court case, it made the conflict part clearer, claiming that an ex-Amazon employee named Deap Ubhi had influence over the process, a charge that Amazon denied when it joined the case to defend itself. Four weeks ago something changed when a single line in a court filing suggested that Ubhi’s involvement may have been more problematic than the DOD previously believed.

At the time, I wrote:

In the document, filed with the court on Wednesday, the government’s legal representatives sought to outline its legal arguments in the case. The line that attracted so much attention stated, “Now that Amazon has submitted a proposal, the contracting officer is considering whether Amazon’s re-hiring Mr. Ubhi creates an OCI that cannot be avoided, mitigated, or neutralized.” OCI stands for Organizational Conflict of Interest in DoD lingo.

And Pentagon spokesperson Heather Babb told TechCrunch:

During his employment with DDS, Mr. Deap Ubhi recused himself from work related to the JEDI contract. DOD has investigated this issue, and we have determined that Mr. Ubhi complied with all necessary laws and regulations.

Whether the new evidence that DOD has found is referring to Ubhi’s rehiring by Amazon or not is not clear at the moment, but it has clearly found new evidence it wants to explore in this case, and that has been enough to put the Oracle lawsuit on hold.

Oracle’s court case is the latest in a series of actions designed to protest the entire JEDI procurement process. The Washington Post reported last spring that co-CEO Safra Catz complained directly to the president. The company later filed a formal complaint with the Government Accountability Office (GAO), which it lost in November when the department’s investigation found no evidence of conflict. It finally made a federal case out of it when it filed suit in federal court in December, accusing the government of an unfair procurement process and a conflict on the part of Ubhi.

The cloud deal itself is what is at the root of this spectacle. It’s a 10-year contract worth up to $10 billion to handle the DOD’s cloud business — and it’s a winner-take-all proposition. There are three out clauses, which means it might never reach that number of years or dollars, but it is lucrative enough, and could possibly provide inroads for other government contracts, that every cloud company wants to win this.

The RFP process closed in October and the final decision on vendor selection is supposed to happen in April. It is unclear whether this latest development will delay that decision.

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A big apartment management company is suing Airbnb

The Paris Aquarium And Airbnb Organize A Contest To Offer Winners A Night Underwater With Sharks Oh, how the tables can turn. After suing San Francisco, New York City and Anaheim, Airbnb has found itself on the other side of a lawsuit. Apartment Investment & Management Company (Aimco), which owns or manages about 50,000 properties, is suing Airbnb, saying that the company is deliberately incentivizing people to breach their leases, The Wall Street Journal reported. Aimco, which filed… Read More

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Postmates now allows drivers to opt out of mandatory arbitration

The Postmates sign outside the office In fall 2015, the National Labor Relations Board filed a complaint against Postmates that challenged the legality of the company’s mandatory arbitration agreement between it and its contractors. Yesterday, Postmates updated its legal document to offer contractors a way to opt out of mandatory arbitration. Read More

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A new lawsuit alleges anti-aging startup Elysium Health hasn’t paid its sole supplier

elysium health Chromadex, the sole supplier of anti-aging startup Elysium Health‘s two main product ingredients pterostilbene and Nicotinamide Riboside (NR), is suing the startup for failure to make payments on those ingredients and for breach of a trademark and royalties agreement. According to a document on Chromadex’s website, dated December 29, 2016, Elysium “made… Read More

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Uber hits another roadblock

uber-volvo-self-driving Uber, the ridesharing behemoth that recently began operating driverless cars and exploring self-flying drone taxis, can’t seem to catch a break these days in the legal arena. The New York State Department of Labor has ruled that two Uber drivers, Jakir Hossain and Levon Alesanian, are indeed employees — not contractors —  and therefore eligible to receive unemployment… Read More

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Oracle CEO claims it discounted Java by 97.5% to beat out Android on Amazon’s Paperwhite

oracle v google Oracle and Google continue to fight it out in a retrial over $9 billion that Oracle claims Google owes it for using its Java code in its popular Android mobile platform. And in the process, we’re also hearing details about other companies that may not have been known before. Today it was the turn of Amazon, which Oracle today said ran Java in its Kindle Paperwhite, but only after… Read More

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Innovating In A World Of Patent Lawsuits

Wooden justice gavel and block with brass Apple seems to get caught in lots of patent fights. Since 2009, Nokia has sued Apple (they settled), Apple has sued HTC (they settled), Kodak sued Apple (Kodak is appealing), Motorola Mobility sued Apple (Apple is appealing) and Apple and Samsung filed more than 40 lawsuits against each other (still fighting it out in the U.S.). The list goes on. With so much energy spent in patent lawsuits… Read More

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