The role played by a start-up founder and Amazon employee, Deap Ubhi, is at the center of a high-stakes lawsuit over a $10 billion contract. The lawsuit could affect the future of the Pentagon's cloud computing efforts.
The Pentagon is reviewing whether Amazon Web Services created a conflict of interest when it hired a former Defense Department employee who once claimed he was “leading the effort” to help the agency move its computing systems to the cloud, court records show.
Deap Ubhi had worked at Amazon Web Services before joining the Defense Department and now is back at the company after less than two years – a career path that is now a point of contention in the competition for a $10 billion contract to build and manage much of the cloud computing services for the Pentagon.
Amazon’s competitors argue that the procurement – known as the Joint Enterprise Defense Infrastructure or JEDI – is biased in favor of Amazon Web Services, an Amazon business unit that already holds a $600 million contract to run the CIA’s cloud infrastructure. (Jeff Bezos, Amazon’s founder, owns The Washington Post.)
Though the contract is not expected to be awarded until the spring, it has already been hit with multiple legal challenges – none of which have been successful. Amazon’s rivals, IBM and Oracle, which also are vying for the contract, filed challenges with the Government Accountability Office attempting to force the Pentagon to award multiple contracts, instead of just one.
Now in a new lawsuit filed in the U.S. Court of Federal Claims, Oracle alleges the Pentagon should more fully examine the role of Ubhi, who left Amazon and began working at the Defense Digital Service in August 2016. (The court based in D.C. hears monetary claims against the federal government.) While at the Defense Digital Service, he eventually worked on the JEDI contract.
In October 2017, Ubhi recused himself from the procurement process. Aside from his job at the Pentagon, he had been running a start-up that helped restaurants do business online, a business that drew interest from Amazon. In his recusal, Ubhi cited “potential conflicts” arising from those “partnership” discussions, according to court documents. It is unclear if those discussions went anywhere. But soon after his recusal, Ubhi left the Pentagon to return to Amazon Web Services (AWS).
Both AWS and the Pentagon have pushed back against Oracle’s claims. The Pentagon charged in its filing that Oracle is engaged in a “broad fishing expedition” and regurgitating arguments it used in a previous legal battle that ultimately failed.
“Oracle attempts to use Mr. Ubhi’s voluntary recusal as evidence of supposed bias, when in reality it demonstrates precisely the opposite: Mr. Ubhi acted specifically to avoid any potential conflict by voluntarily recusing himself from any JEDI activities before he eventually returned to AWS,” Amazon’s attorneys wrote in a filing.
The Pentagon said its contracting officer investigated whether the discussions Ubhi had with Amazon about acquiring his company presented a conflict and found it did not. Now that AWS has submitted a bid for the cloud contract, the officer said in a court filing that she had launched a separate inquiry into “whether AWS’s employment of Mr. Ubhi (and potentially others) creates [a conflict of interest] that cannot be avoided, mitigated or neutralized.”
The filing did not indicate who the others might be.
AWS had previously confirmed that during both stints at AWS, Ubhi worked on the commercial side of the company and did not deal with federal government programs or clients. It declined to make Ubhi available for comment, citing ongoing litigation. Ubhi did not respond to requests for comment.
Oracle alleged that while at the Pentagon, Ubhi had enormous influence over the contract, and that he pushed for the Pentagon to award a single contract for a cloud system, instead of several as some in industry have been advocating.
Court documents filed by Oracle cite an internal Slack message from Ubhi to another official stating, “all industry contacts that have been funneled to me have received a response. I will treat them all equally (unless they are stupid – stupidity gets no equality).”
Other officials appeared to express concern with Ubhi’s support for the single-cloud strategy. Another official allegedly told Ubhi via Slack: “I really need to better understand from you why only one provider makes sense,” according to documents cited in Oracle’s legal complaint.
Most Read Business Stories
- Value Village's marketing deceived customers, judge rules in case brought by Washington attorney general
- Amazon takes aim at lower-cost groceries, starting with L.A. store to open in 2020
- New McDonald's CEO has tense relationship with franchisees
- Home prices still booming in outlying counties; don't blame the pocket gopher
- After Lion Air crash, Boeing doubled down on faulty 737 MAX assumptions
Oracle also cited an October 2017 email from one DoD official to another, which said: “Deap has a specific way he wants to tackle this [one versus multiple providers] and will be attending in person for this purpose.”
While at the Pentagon, Ubhi publicly praised Amazon and repeatedly referred to himself as an “Amazonian,” something that Oracle has used to suggest he was biased.
“Once an Amazonian, always an Amazonian. Thank you @Jeff Bezos,” he tweeted on Jan. 30, 2017, in response to Bezos pledging to fight President Donald Trump’s immigration stance.
In a blog post while at the Pentagon, Ubhi wrote that he was “currently leading the effort to accelerate adoption of the cloud for the Department of Defense.” He added that, “Having been a technical product person, a startup founder, an Amazonian, I deeply understand the broad-ranging impact this could have for the DoD.”
Oracle also criticized the Defense Department’s oversight of the contract, including efforts to vet Ubhi, saying a DoD conflict-of-interest inquiry “spans less than one page” and “entirely ignored” Ubhi’s subsequent employment at AWS.
“Unless and until the agency completes an adequate investigation to determine whether Ubhi’s involvement has impacted the integrity of the JEDI cloud competition, no competition can be free and fair,” the company said in its suit.
The Pentagon acknowledged that Ubhi, like many others, advocated for a single contract award. But it said he worked on the contract for only about seven weeks, that his role was limited and the major decisions regarding the contract were made well after he had left.
In the court filing, the Pentagon said that Ubhi’s “participation in the procurement did not and could not negatively affect the integrity of the procurement going forward.” Ubhi was initially cleared to work on the JEDI project “because his employment with Amazon ended more than one year before the procurement began,” the Defense Department said in court records.
Oracle also alleged that Anthony DeMartino, who had served as deputy chief of staff to the Secretary of Defense, had a conflict because he had previously worked for a consulting company that counted AWS as a client.
DeMartino did not respond to a request for comment.
The Pentagon said in its filing that the possibility that either of them could have steered the contract to Amazon’s favor “during their limited involvement is illogical.”
As for Ubhi’s tweets and blog post, the Pentagon said they were “imprudent” but did not “demonstrate bias.”
The JEDI contract is central to the U.S. military’s ability to compete with China and Russia for technological superiority as militaries around the world race to incorporate information-age artificial-intelligence capabilities into their operations.
The infrastructure JEDI would create would allow the Pentagon to build advanced artificial intelligence algorithms into operations on a global scale as well as securely access important data in combat zones around the globe. And it comes at a time when China has been investing heavily in artificial intelligence.
– – –
The Washington Post’s Julie Tate contributed to this report.