Case 1:19-cv-01796-PEC Document 181 Filed 03/24/20 Page 1 of 11
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`IN THE UNITED STATES COURT OF FEDERAL CLAIMS
`BID PROTEST
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`Case No. 19-cv-01796
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`Judge Campbell-Smith
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`AMAZON WEB SERVICES, INC.,
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`Plaintiff,
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`v.
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`UNITED STATES OF AMERICA,
`by and through the U.S. Department of Defense,
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`Defendant,
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`and
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`MICROSOFT CORPORATION,
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`Defendant-Intervenor.
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`PLAINTIFF’S OPPOSITION TO
`DEFENDANT’S MOTION FOR VOLUNTARY REMAND
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`Amazon Web Services, Inc. (“AWS”) submits this Opposition to the Motion for Voluntary
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`Remand (“Motion”) filed by Defendant, the United States. Defendant’s Motion asks the Court to
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`remand this case to the Department of Defense (“DoD”) for 120 days to reconsider certain aspects
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`of its Joint Enterprise Defense Infrastructure (“JEDI”) award decision. Def. Mot. Vol. Remand,
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`ECF No. 177 (“Mot.”). Defendant explains DoD intends to take corrective action in response to
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`the Court’s February 13, 2020 decision granting AWS’s Motion for Preliminary Injunction that
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`held, among other things, DoD likely erred in evaluating Microsoft’s deficient proposal under
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`Price Scenario 6. Id. at 2.
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`The corrective action DoD proposes fails the tests of rationality and fairness, violates the
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`broad discretion afforded an agency for addressing a procurement impropriety, and suggests that
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`DoD seeks to take whatever corrective action is necessary to reaffirm its prior award to Microsoft
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`despite the material defects the Court identified and DoD has now acknowledged. This Court’s
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`decision granting AWS’s Motion for Preliminary Injunction makes clear that Microsoft is likely
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`ineligible for the JEDI award. Contrary to the letter and spirit of that decision, DoD’s proposed
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`corrective action – i.e., amending the RFP’s Price Scenario 6 requirements, permitting only limited
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`proposal revisions in response to the amended requirements, and re-evaluating the revised
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`proposals – would enable Microsoft to resurrect its eligibility while depriving AWS of a reasonable
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`opportunity to revise its proposal in response to changed requirements. Moreover, despite a
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`passing nod in the right direction, DoD does not meaningfully commit to reconsider the other
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`evaluation errors identified in the protest that produced the flawed award to Microsoft.
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`The Government should not be permitted to gerrymander the corrective action to preserve
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`the illusion that Microsoft offered the lowest price while simultaneously perpetuating competitive
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`impediments for AWS, the only offeror that submitted a compliant proposal eligible for award.
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`Accordingly, AWS requests the Court deny Defendant’s Motion and require DoD to revise its
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`corrective action to reasonably and fairly reconsider the JEDI award decision by (1) removing the
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`constraint on the offerors’ ability to revise their pricing, and (2) re-evaluating proposals with
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`respect to all of the errors identified by the protest.
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`DISCUSSION
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`Defendant’s Motion states that DoD intends to (1) issue an RFP amendment, (2) solicit
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`“limited proposal revisions addressing the offerors’ technical approach” to Price Scenario 6, and
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`(3) reconsider DoD’s evaluation of Price Scenario 6 under Factor 5 and Factor 9. Id. at 2.
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`Case 1:19-cv-01796-PEC Document 181 Filed 03/24/20 Page 3 of 11
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`Defendant acknowledges that DoD’s specific intent is to “constrain” proposal revisions on remand
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`“by [maintaining] the storage solutions and unit prices contained in offerors’ final proposal
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`revisions (i.e. offerors would not be permitted to add storage solutions not contained in their final
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`proposal revisions, but may be permitted to adjust which previously-proposed solutions would be
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`utilized to address Price Scenario 6).” Id. DoD’s proposed corrective action appears specifically
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`designed to preserve the status quo by allowing Microsoft to remedy the error this Court identified
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`as defective, and would not ensure a rational and fair reconsideration of proposals for the JEDI
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`award.
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`Corrective action regarding a government contract award “requires a rational basis for its
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`implementation.” Dell Federal Sys., v. United States, 906 F.3d 982, 991-92 (2018). The rational
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`basis test considers “whether the contracting agency provided a coherent and reasonable
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`explanation of its exercise of discretion.” Id. at 992 (quoting Banknote Corp. of Am., Inc. v. United
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`States, 365 F.3d 1345, 1351 (Fed. Cir. 2004)). In evaluating proposed corrective action, a court
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`must be satisfied that the corrective action is “reasonable under the circumstances,” DGS Contract
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`Serv., Inc. v. United States, 43 Fed. Cl. 227, 238 (1999), and “appropriate to remedy the
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`impropriety,” Mantech Telcoms. & Info. Sys. Corp. v. United States, 49 Fed. Cl. 57, 65 (2001).
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`“In order to make these assessments, the court, per force, must review the improprieties – whether
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`alleged or actual – that gave rise to the proposed corrective action under review.” Mantech, 49
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`Fed. Cl. at 65. Corrective action is not reasonable if it does not meaningfully address the flaws
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`identified in the evaluation, or if it is designed merely to conform the solicitation to the awardee’s
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`proposal. See Centerra Group, LLC v. United States, 138 Fed. Cl. 407, 416-17 (2018);
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`Professional Service Industries, Inc. v. United States, 129 Fed. Cl. 190, 206 (2016). As explained
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`below, DoD’s proposed corrective action fails the rationality test for at least two reasons.
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`First, DoD’s corrective action, and particularly its limitation on price revisions in response
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`to amendment of Price Scenario 6, is irrational because it ignores the impact of the RFP’s Price
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`Scenario requirements on an offeror’s proposed unit prices and discounts. Mot. at 2. DoD has
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`provided no details on the proposed amendment to address Factor 5 (Price Scenario 6) other than
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`to say that DoD intends to prohibit offerors from revising the unit prices for services identified in
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`their final proposals. Id. AWS understands that DoD also plans to prohibit offerors from revising
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`their proposed discounts for the various services. Those restrictions are unreasonable both within
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`Price Scenario 6 and – because they have effects throughout – across all of the Price Scenarios.
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`On remand, offerors would be able to change only the services they proposed for Price
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`Scenario 6, and would not be allowed to adjust the unit prices and discounts for those services
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`regardless of any increase or decrease in the volume of the service provided. For example, if the
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`RFP amendment were to permit nearline storage for Price Scenario 6, AWS likely would propose
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`an exclusively nearline storage solution, but would be unable to adjust its unit or discount pricing
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`to account for the changes in DoD’s projected needs regarding nearline and online storage.1 AR
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`Tab 342 at 151478 (“[The] scenarios included in Section L are based on the Government’s
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`projected needs…”).
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`This limitation is unreasonable because it would hold static the offerors’ unit and discount
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`pricing for Price Scenario 6 while amending the requirements upon which that pricing depends. It
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`also would directly and unreasonably benefit Microsoft, allowing it to retain the discounts
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`specifically designed for its currently deficient approach, while preventing AWS from offering
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`1 On the other hand, if the RFP amendment were merely to confirm the already unambiguous and
`clear requirement for online storage in Price Scenario 6, the amendment would have no purpose
`other than to allow Microsoft to cure its deficient storage solution, while preventing AWS from
`improving its competitive standing.
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`pricing and discounts based upon the changes to the Government’s projected needs. Such a
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`revision would violate the fundamental FAR requirement to treat offerors fairly and equally. See
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`Centerra Group, 138 Fed. Cl. at 416-17 (agency’s corrective action, which only permitted original
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`awardee the opportunity to “revise and improve the competitiveness of its proposal,” was “patently
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`unfair” and “violated the fundamental fairness requirements of the FAR”). Similar to Centerra
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`Group, DoD’s proposed corrective action would be “a mockery of fundamental fairness and
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`competitive principles” because it would permit only Microsoft to improve the competitiveness of
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`its proposal. Id.
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`In addition, if DoD changes the requirements of even one Price Scenario, those changes
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`would necessarily upset the foundation of an offeror’s unified pricing strategy. Indeed, DoD’s
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`proposed limitation runs directly counter to the RFP’s requirement that an offeror propose uniform
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`unit prices and discounts across all of the Price Scenarios. AR Tab 342 at 151498 (“Offerors are
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`prohibited from proposing unique discount, premium, and fee methodologies that are only
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`applicable to a particular price scenario.”); see also id. at 151500 (“All proposed pricing and
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`methodologies for a price scenario shall be consistent with the proposed pricing for the ID/IQ,
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`including discount, premium, and fee methodologies. Any inconsistencies between the proposed
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`pricing for a price scenario that deviates from the proposed pricing for the ID/IQ may render the
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`proposal unacceptable.”). By prohibiting scenario-specific unit prices and discounts, the RFP
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`required offerors to analyze the requirements of all of the Price Scenarios and then, based on that
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`holistic analysis, determine a single pricing strategy for each service that could be applied across
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`the board. That is precisely what AWS did in determining the pricing and discounts in its JEDI
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`proposal. See AR Tab 375 at 154072, AWS Proposal, Vol. VI, A.1 (Customized Discount
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`Strategy: “Our pricing discounts are based upon a comprehensive understanding of the current
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`and future state of DoD requirements, best in class technical solutions that optimize requirements,
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`and a discount strategy that focuses on delivering value to DoD.”). It is irrational for DoD to revise
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`the requirements for Price Scenario 6 without allowing offerors to adjust their unit prices and
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`discounts for the various services across all of the Price Scenarios.
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`More fundamentally, allowing offerors to revise their unit and discount pricing in response
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`to the RFP amendment would benefit DoD and the American taxpayer by providing less expensive
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`cloud services under the JEDI Contract. On the other hand, DoD’s proposed pricing constraint
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`would irrationally benefit only Microsoft by preserving its position as the allegedly lowest-priced
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`offeror – after this Court specifically exposed that position as false in its preliminary injunction
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`decision based on Microsoft’s noncompliant solution to Price Scenario 6. The Court should not
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`allow DoD to unfairly constrain the recompetition in this way. See Professional Service Industries,
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`129 Fed. Cl. at 206 (agency’s decision to amend solicitation to conform to awardee’s proposal was
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`arbitrary and capricious, and agency failed to engage in reasoned decision-making). It would be
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`more reasonable and more fair, for example, for DoD simply to omit Price Scenario 6 from the re-
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`evaluation altogether, rather than to proceed in the irrational manner proposed.
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`Second, while DoD’s proposed corrective action would provide Microsoft an opportunity
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`to remedy the fatal proposal deficiency the Court already confirmed, DoD provides no meaningful
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`commitment to evaluate the other serious errors identified by AWS’s protest. DoD instead simply
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`waves its hand, suggesting anemically that “DoD wishes to reconsider its award decision in
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`response to the other technical challenges presented by AWS.” Mot. at 2. But as recently as March
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`23, 2020, DoD admitted that it intends to limit its correction action to “ensur[ing] that the Court
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`of Federal Claims’ noted concerns are addressed.” Pentagon Will Not Split JEDI Award
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`EXCLUSIVE, Breaking Defense (Mar. 23, 2020), https://breakingdefense.com/2020/03/pentagon-
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`will-not-split-jedi-award-exclusive/?utm_campaign=Breaking%20News&utm_source=hs_email
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`&utm_medium=email&utm_content=85122332&_hsenc=p2ANqtz-_wXvmv_ADBap-NblFhnG
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`57LGZ2NtZvE8s3a8MxBfJWX2Mx_J-Y7UQG_a8Uz_Aj12WdK3qZHJq0WITsK8wsNuJ3Aiv
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`SHg&_hsmi=85122332 (last accessed Mar. 23, 2020). DoD’s statement reveals that DoD’s intent
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`is to reconsider only the single issue that this Court has had the opportunity to review and hardly
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`suggests a fair reconsideration of all of protest grounds raised by AWS.
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`Even if taken at face value, DoD’s proposed corrective action fails to address in any
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`meaningful way how it would resolve the technical issues AWS has raised, or which specific
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`technical challenges it intends to address. Such proposed corrective action, without an explanation
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`that gives AWS and the Court comfort that it will be implemented fairly and objectively, should
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`not be accepted by the Court. See Tikigaq Constr., LLC v. United States, 2016 WL 6080803, *7
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`(Fed. Cl. Oct. 6, 2016) (notice of corrective action did not explain how the agency would address
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`key protest allegations, so it was unclear how the proposed corrective action would resolve those
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`procurement improprieties). In light of the numerous and compounding errors already identified
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`by AWS, and the Court’s recognition that AWS was likely to succeed on the merits of the only
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`argument considered to date, the Court should require the Government to identify corrective action
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`that would reasonably and impartially address all errors – mistakes that implicate virtually every
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`factor of the proposal evaluation:
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`•
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`•
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`•
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`•
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`•
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`•
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`Factor 2: Logical Isolation and Secure Data Transfer;
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`Factor 3: Tactical Edge;
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`Factor 4: Information Security and Access Controls;
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`Factor 5: Application and Data Hosting and Portability;
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`Factor 6: Management and Task Order 001; and
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`Factor 8: Demonstration.
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`Case 1:19-cv-01796-PEC Document 181 Filed 03/24/20 Page 8 of 11
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`AWS of course recognizes a general presumption of good faith afforded to Government
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`officials in exercising corrective action. See Square One Armoring Serv., Inc. v. United States,
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`123 Fed. Cl. 309, 329 (2015). DoD’s corrective action, as proposed in the Motion, however, has
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`not been formulated evenhandedly. As the Court held in Centerra Group, “there is no fairness or
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`equity in punishing a protestor by allowing its competitor to redress every flaw in its proposal, as
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`pointed out by the protestor, so that the agency’s award decision may withstand review. This is
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`not corrective action, but a mockery of fundamental fairness and competitive principles.” 138 Fed.
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`Cl. at 416.
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`Indeed, DoD’s public statements during the protest litigation, which reaffirmed the
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`Government’s commitment to ensuring that Microsoft gets the JEDI contract, cast further serious
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`doubt about the rationality and fairness of the corrective action proposed. See, e.g., DoD Statement
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`on Preliminary Injunction, Feb. 13, 2020, available at https://www.cnbc.com/2020/02/13/amazon-
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`gets-restraining-order-to-block-microsoft-work-on-pentagon-jedi.html (“. . . we are confident in
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`our award of the JEDI cloud contract to Microsoft and remain focused on getting this critical
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`capability into the hands of our warfighters as quickly and efficiently as possible”); Dana Deasy:
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`Pentagon, Microsoft to Move Forward With JEDI Cloud Rollout Plan, Dec. 11, 2019, available at
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`https://www.govconwire.com/2019/12/dana-deasy-pentagon-microsoft-to-move-forward-with-
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`jedi-cloud-rollout-plan/ (“‘I’ve told the team, “Let’s just not sit and wait. Let’s start to get the
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`environment ready so when we come out of the protest, we haven’t lost any momentum,”’ Deasy
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`said.”). As presently proposed, the corrective action would render DoD’s expressed commitment
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`to Microsoft a fait accompli. Cf. Centerra Group, 138 Fed. Cl. at 416-17; Professional Service
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`Industries, 129 Fed. Cl. at 190.
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`Microsoft’s most recent public statements applauding the unreasonably narrow focus of
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`the corrective action further bolster real and well-grounded suspicion that DoD plans to ensure the
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`eventual award of the contract to Microsoft. See Pentagon Asks to Reconsider Part of JEDI Cloud
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`Decision After Amazon Protest, Mar. 12, 2020, available at https://www.washingtonpost.com/
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`business/2020/03/12/pentagon-asks-reconsider-part-jedi-cloud-decision-after-amazon-protest/
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`(“. . . we support [DoD’s] decision to reconsider a small number of factors as it is likely the fastest
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`way to resolve all issues and quickly provide the needed modern technology to people across our
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`armed forces.”). As the Court has recognized, “this procurement is complex and conducting it
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`correctly is necessarily time-consuming.” ECF No. 173 at 14. Although the Government and
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`Microsoft might view the proposed corrective action as “the fastest way to resolve all issues,” it is
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`important, as the Court has underscored, that the corrective action “ensure the procurement [is]
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`properly conducted,” ECF No. 173 at 14.
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`In plain terms, DoD’s proposed corrective action focuses on allowing Microsoft to fix its
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`fatally deficient proposal, while paralyzing AWS’s proposed pricing in the face of planned changes
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`to the RFP’s requirements. And it does not promise to address the other procurement flaws in any
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`meaningful way. DoD’s failure to propose a fair and rational corrective action is consistent with
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`its past efforts to improperly steer (and now preserve) the award to Microsoft, from the numerous
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`unexplainable flaws in its original source selection to its refusal to provide substantive answers to
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`any of AWS’s debriefing questions following the award.2 The Court should consider the proposed
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`corrective action in light of this context.
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`2 DoD’s efforts to achieve this end are made even more apparent by its refusal to even consent to
`AWS’s request to release its bond obligation in conjunction with the preliminary injunction,
`despite DoD’s implicit acknowledgement that it had erred in its evaluation.
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`Case 1:19-cv-01796-PEC Document 181 Filed 03/24/20 Page 10 of 11
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`CONCLUSION
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`For the foregoing reasons, DoD’s proposed corrective action, as detailed in Defendant’s
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`Motion for Voluntary Remand, is not rational because it is neither “reasonable under the
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`circumstances,” DGS, 43 Fed. Cl. at 238, nor “appropriate to remedy the impropriety,” Mantech,
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`49 Fed. Cl. at 65. AWS requests the Court deny Defendant’s Motion, and require DoD to revise
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`its corrective action to reasonably and fairly reconsider the JEDI award decision by (1) permitting
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`offerors to revise their unit prices and discounts across all Price Scenarios; and (2) re-evaluating
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`proposals with respect to all the errors identified by the protest.
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`Dated: March 24, 2020
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`Respectfully submitted,
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`Of Counsel:
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`J. Alex Ward
`Daniel E. Chudd
`Sandeep N. Nandivada
`Caitlin A. Crujido
`Alissandra D. Young
`Morrison & Foerster LLP
`2000 Pennsylvania Ave., NW
`Washington, DC 20006-1888
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`By:
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`Kevin P. Mullen
`Morrison & Foerster LLP
`2000 Pennsylvania Ave., NW
`Washington, DC 20006-1888
`Telephone: 202.887.1500
`Facsimile: 202.887.0763
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`Attorney of Record for Plaintiff
`Amazon Web Services, Inc.
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`Case 1:19-cv-01796-PEC Document 181 Filed 03/24/20 Page 11 of 11
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`Andrew S. Tulumello
`Daniel P. Chung
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, D.C. 20036
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`Theodore J. Boutrous, Jr.
`Richard J. Doren
`Eric D. Vandevelde
`GIBSON, DUNN & CRUTCHER LLP
`333 South Grand Avenue
`Los Angeles, CA 90071-3197
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