Oracle America, Inc. v. United States

In the United States Court of Federal Claims

No. 18-1880C

(Filed: January 23, 2019)

(Re-filed: January 28, 2019) 1

NOT FOR PUBLICATION

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ORACLE AMERICA, INC.,

Plaintiff,

Bid protest; pre-award bid

v. protest; 28 U.S.C. §

1491(b)(1) (2018); motion

THE UNITED STATES, to complete, to supplement,

and for limited discovery;

Defendant, complete administrative

record; effective judicial

and review.

AMAZON WEB SERVICES, INC.,

Intervenor.

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Craig A. Holman, Washington, DC, for plaintiff. Kara L. Daniels,

Dana E. Koffman, Amanda J. Sherwood, and Nathaniel E. Castellano, of

counsel.

William P. Rayel, Senior Trial Counsel, United States Department of

Justice, Civil Division, Commercial Litigation Branch, Washington, DC,

with whom were Joseph H. Hunt, Assistant Attorney General, Robert E.

Kirschman, Jr., Director, Patricia M. McCarthy, Assistant Director, for

defendant. Christina M. Austin and Andrew Bramnick, Washington

Headquarters Service & Pentagon Force Protection Agency, United States

Department of Defense, Office of General Counsel, of counsel.

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This order was originally issued under seal. Counsel for AWS filed a notice

on January 25, 2019, on behalf of the parties, stating that the parties do not

propose any redactions. Therefore, this order is re-issued without redactions.

Daniel R. Forman, Washington, DC, for intervenor. Olivia L. Lynch

and Robert J. Sneckenberg, of counsel.

ORDER

BRUGGINK, Judge.

On December 28, 2018, plaintiff, Oracle America, Inc. (“Oracle”),

filed a motion to complete and supplement the administrative record (“AR”)

and for leave to conduct limited deposition and document discovery. The

motion is fully briefed, and oral argument is deemed unnecessary. Because

plaintiff has not demonstrated that the AR is incomplete, that it must be

supplemented to allow for effective judicial review, or that grounds exist to

permit discovery, we deny the motion.

On July 26, 2018, after making a single-award determination, the

Department of Defense (“DoD”) issued a request for proposals (“RFP”),

seeking infrastructure as a service and platform as a service to provide DoD

with an “‘enterprise cloud services solution that can support unclassified,

secret, and top secret information,’” known as the Joint Enterprise Defense

Infrastructure (“JEDI”) Cloud procurement. Def.’s Resp. 6 (quoting AR

5956). DoD anticipates awarding an indefinite-delivery, indefinite-quantity

(“IDIQ”) contract to a single, best value offeror with a potential ten-year

performance period, a maximum contract limit of $10 billion, and a

minimum guaranteed amount of $1 million. The solicitation is ongoing, and

DoD has not announced the proposals moving forward after evaluation of the

gate criteria.

Oracle filed a pre-award bid protest here on December 6, 2018, after

an unsuccessful protest at the Government Accountability Office (“GAO”).

Oracle’s protest comes early in the evaluation period and presents three

limited arguments. First, plaintiff contends that the agency’s determination

to issue a single-award IDIQ contract, rather than make multiple awards,

violates the law and lacks a rational basis. Second, Oracle argues that three

gate criteria exceed the agency’s needs and unduly restrict competition.

Third, plaintiff argues that the contracting officer (“CO”) failed to properly

investigate and address conflicts of interest regarding two former DoD

employees, Anthony DeMartino and Deap Ubhi, during the CO’s pre-

solicitation evaluation of conflicts of interest. The present motion implicates

the second and third issues.

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Pursuant to the court’s December 13, 2018 scheduling order, the

government circulated a tentative AR index, and, after reviewing it, on

December 28, Oracle filed the present motion to complete the record with

materials it contends the agency had in front of it during the decision-making

process, to supplement the record with material that was not considered, and

for leave to conduct limited deposition and document discovery. The

government filed the AR on January 10, 2019. The government and the

intervenor, Amazon Web Services (“AWS”), responded on January 11,

opposing the motion with one minor exception. Oracle replied in support of

its motion on January 16.

Oracle seeks the inclusion of eight categories of existing documents

that it alleges were available and considered by the agency but were omitted

from the AR. One relates to the allegedly unduly restrictive gate criteria. As

to that category, Oracle seeks to include the proposals submitted in response

to the final RFP and the agency’s evaluation of them. The remaining seven

categories of presumably existing materials relate to Oracle’s conflict of

interest argument:

1. Documents related to the role of Mr. DeMartino, Mr. Ubhi, or Sally

Donnelly in the preparation of the September 13, 2017 DoD

“Accelerating Enterprise Cloud Adoption” Memorandum;

2. Documents related to the role of Mr. DeMartino, Mr. Ubhi, or Ms.

Donnelly in the Secretary of Defense’s visit to AWS in the summer

of 2017;

3. Documents related to the Cloud Executive Steering Group and any

other DoD meetings that Mr. DeMartino, Mr. Ubhi, or Ms. Donnelly

attended related to the JEDI Cloud;

4. Documents in defendant’s possession related to (i) communications

between AWS and Mr. DeMartino, Mr. Ubhi, or Ms. Donnelly while

they were employed or specially employed by DoD; (ii)

communications involving Mr. DeMartino, Mr. Ubhi, or Ms.

Donnelly about the JEDI Cloud; and (iii) communications involving

Mr. DeMartino, Mr. Ubhi, or Ms. Donnelly about AWS;

5. The JEDI Cloud Google Drive or, at a minimum, the index of

documents on the drive and metadata showing the author, name of the

document, the version, date, and any other metadata;

6. Non-privileged Standard of Conduct Office documents or

communications regarding the JEDI Cloud and participants in the

procurement; and

7. Documents related to the JEDI Cloud that Mr. DeMartino, Mr. Ubhi,

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or Ms. Donnelly created or accessed.

See Pl.’s Mot. to Suppl. 23–28.

Alternatively, plaintiff argues that the eight categories of documents

listed above should supplement the record. Additionally, it seeks to

supplement the record with public statements made by DoD representatives

and Mr. Ubhi, included in Oracle’s Exhibits A and B to its motion. Finally,

Oracle requests that it be permitted to conduct limited deposition and

document discovery of Mr. DeMartino and Mr. Ubhi to develop a more

complete understanding of the conflict of interest allegations.

The government opposes Oracle’s motion with respect to all but one

document: Exhibit B to Oracle’s motion, which is a publicly available

document purportedly created by DoD which mentions the single-award

strategy. The government included that document in the AR at Tab 92. That

request is thus moot. Regarding the motion to complete the AR, the

government contends that Oracle has not demonstrated that the categories of

documents listed were considered by the agency when making decisions

regarding the gate criteria or the conflicts of interest.

Furthermore, defendant contends that Oracle’s motion reveals that its

argument on the merits will amount to a request for a de novo review of the

conflict of interest investigation, rather than seeking a determination of

whether the CO’s review, based on the existing record, had a rational basis.

The government argues that the voluminous AR is sufficient to permit

effective judicial review of that limited question. Finally, the government

argues that Oracle has not presented any extra-record facts of bias on behalf

of Mr. DeMartino or Mr. Ubhi sufficient to trigger discovery.

I. Legal Standards

This court has jurisdiction over challenges brought by interested

parties to actions taken by federal agencies in connection with procurements.

28 U.S.C. § 1491(b)(1) (2018). Our review is conducted pursuant to the

standards set forth in the Administrative Procedure Act, 5 U.S.C. § 706

(2018). Id. § 1491(b)(4). Thus, the court’s ultimate question when

considering the merits is whether the agency acted arbitrarily or capriciously,

abused its discretion, or conducted itself in a manner that is otherwise not in

accordance with law. See 5 U.S.C. § 706. Even if a reasonable person might

have reached a different conclusion, we will not set aside the agency’s

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determination unless the protestor can demonstrate that the agency lacked a

rational basis or violated law or regulation. Impresa Construzioni Geom.

Domenico Garufi v. United States, 238 F.3d 1324, 1332–33 (Fed. Cir. 2001)

(citations omitted). If the court finds that the agency’s decision-making

process was not properly documented or was inadequate in some regard, the

court generally will not substitute its views for that of the decision maker but

rather will remand the matter back to the agency. Id. at 1338 (citing Florida

Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985)).

Our task, thus, is “‘to apply the appropriate APA standard of review .

. . to the agency decision based on the record the agency presents to the

reviewing court.” Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374,

1379 (Fed. Cir. 2009) (quoting Florida Power & Light Co., 470 U.S. at 743–

44) (emphasis omitted). Of course, “[a] complete administrative record is

the predicate to meaningful and effective judicial review . . . .” Joint Venture

of Comint Sys. Corp. v. United States, 100 Fed. Cl. 159, 168 (2011).

Requests to complete the AR and to supplement the AR are distinct.

A complete AR includes “all the material that was developed and considered

by the agency in making its decision.” Cubic Applications, Inc. v. United

States, 37 Fed. Cl. 339, 342 (1997) (citing Camp v. Pitts, 411 U.S. 138, 142

(1973)). It should “include the information relied upon by the relevant

agency decision makers and their advisers in reaching the decisions being

challenged, and the contemporaneously articulated reasons for these

decisions.” E.W., Inc. v. United States, 100 Fed. Cl. 53, 56 (2011).

Therefore, if the agency omits information that “served as a basis for” the

agency’s decision, the material should be added to complete the record. Linc

Gov’t Servs., LLC v. United States, 95 Fed. Cl. 155, 158 (2010). In applying

this test here, it is important to recognize the relatively limited scope of the

protest, which is dictated by the fact that the procurement is still in process.

To prevail on a motion to supplement, plaintiff must demonstrate that

“‘the omission of extra-record evidence precludes effective judicial review.’”

Axiom Res. Mgmt., Inc., 564 F.3d at 1380 (quoting Murakami v. United

States, 46 Fed. Cl. 731, 735 (2000), aff’d, 398 F.3d 1342 (Fed. Cir. 2005)).

“Judicial review is ‘effective’ if it is consistent with the APA.”

AgustaWestland N. Am. v. United States, 880 F.3d 1326, 1331 (Fed. Cir.

2018) (quoting Axiom, 564 F.3d at 1381). When granting a motion to

supplement, the court must “explain why the evidence omitted from the

record frustrated judicial review as to the ultimate question of whether the

[agency’s action] was arbitrary and capricious,” and conclusory statements

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of explanation are insufficient. Id. at 1332 (citing Axiom, 564 F.3d at 1379–

80).

Regarding Oracle’s request to depose two former government

employees on the issue of conflict of interest, we begin with the rule that

government officials are presumed to act in good faith. Galen Med. Assocs.

v. United States, 369 F.3d 1324, 1330 (Fed. Cir. 2004) (citing Am-Pro

Protective Agency Inc. v. United States, 281 F.3d 1234, 1239–40 (Fed. Cir.

2002)). To be granted leave to conduct limited discovery, the protestor must

show a “likelihood that discovery would lead to evidence that would meet

the clear and convincing standard” to overcome the presumption of regularity

on the merits. Starry Assocs., Inc. v. United States, 125 Fed. Cl. 613, 623

(2015) (citing Galen Med. Assocs., 369 F.3d at 1330; L–3 Commc’ns

Integrated Sys., L.P. v. United States, 91 Fed. Cl. 347, 355 (2010)). The

protestor must “make a threshold showing of ‘motivation for the Government

employees in question to have acted in bad faith or conduct that is hard to

explain absent bad faith,’ and [show] that ‘discovery could lead to evidence

which would provide the level of proof required to overcome the

presumption of regularity.’” Id. at 622 (quoting Beta Analytics Int’l v. United

States, 61 Fed. Cl. 223, 226 (2004)). The protestor must offer more than

“innuendo or suspicion” to justify discovery. Beta Analytics Int’l, 61 Fed.

Cl. at 226.

II. Motion to Complete or Supplement the Record with Offerors’

Responses to the RFP

Oracle argues that the offerors’ responses to the RFP must be included

in the AR for the court to review whether the agency exceeded its needs and

unduly restricted competition through three gate criteria. We disagree.

Although responses to the RFP generally are considered core documents in

a bid protest AR, Oracle filed this protest in the pre-award stage while the

agency’s evaluation of whether the proposals meet the gate criteria is

ongoing. Oracle’s protest presents a limited question and the AR is shaped

by the confines of Oracle’s protest. The offerors’ responses were neither

developed by the agency nor considered by the agency when drafting and

issuing the gate criteria. The offerors’ responses likewise are not part of the

agency’s explanation of the necessity of those gate criteria. The materials

developed and considered by the agency on this issue are in the AR: the gate

criteria and the agency’s explanation for their inclusion in the solicitation.

E.g., AR Tabs 35, 42–43, 100, 105–06, 113, 130–31.

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Second, the offerors’ responses are not necessary to supplement the

record to permit effective judicial review. Whether the agency imposed more

limitations than were reasonable from a competitive perspective can be

determined from the existing record without considering who responded and

in what fashion. Oracle has not articulated a compelling reason to depart

from reviewing the agency’s reasoning as provided in the record. Thus, we

deny Oracle’s motion to complete or supplement the AR with the offerors’

responses to the RFP.

III. Motion to Complete or Supplement the Record Regarding the

Conflict of Interest Issue and to Conduct Limited Discovery

The bulk of Oracle’s motion to complete or supplement the AR,

including its discovery request, is aimed at uncovering additional evidence

that Mr. DeMartino and Mr. Ubhi had a conflict of interest that would affect

the procurement. 2 Once the briefing on the existing protest is complete,

however, our task on the merits will be to answer the narrow question of

whether the agency reviewed the proper materials, asked the right questions,

and articulated sufficient reasoning for its decision on the conflicts of

interest.

Regarding completing the AR, we presently have in the AR, among

other facts, Mr. DeMartino’s and Mr. Ubhi’s employment relationships with

both DoD and AWS. We also will have access to the CO’s conflict of interest

analysis, as well as additional materials submitted to GAO regarding that

conflict of interest analysis. E.g., AR Tabs 33–34, 45–47, 50–51, 53, 64, 71,

75, 78, 86–88, 181–86. Oracle has not suggested that the government failed

to include information that the CO developed or considered when making

her no-impact determination. Instead, Oracle’s briefing, particularly its

reply, cites extensively to the AR to show that the CO’s analysis was

2

Plaintiff’s motion, consistent with its complaint, argues that Mr. DeMartino

and Mr. Ubhi had improper conflicts of interest during their time working on

the JEDI Cloud procurement. Plaintiff’s motion also requests documents

regarding Ms. Donnelly’s role in the procurement. Based on the conflict of

interest arguments that Oracle advances in its complaint, the documents

relating to Ms. Donnelly appear to be irrelevant. To the extent that plaintiff

now argues that the CO did not properly consider Ms. Donnelly’s potential

conflict of interest regarding the procurement, we find that the record is

sufficient to review the CO’s decision regarding conflicts of interest

impacting this procurement.

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insufficient and that she should have, but did not, consider documents that

are relevant and in the agency’s possession. If her decision or the way she

arrived at it was arbitrary, the remedy, presumably, will be to remand for

further consideration. Thus, the AR and the briefing demonstrate that the

documents Oracle seeks to include are not necessary to complete the record.

Likewise, none of the categories of documents submitted are

necessary to supplement the AR. The AR as it exists allows the court to

evaluate the CO’s investigation into conflicts of interest. Regarding the

publicly available documents included in Oracle’s motion at Exhibits A and

B, the government conceded that Exhibit B belongs in the AR and included

it at Tab 92, mooting that issue. The court finds that Mr. Ubhi’s public

statements included in Exhibit A are unnecessary to facilitate effective

judicial review because those statements duplicate information currently

available in the AR regarding Mr. Ubhi’s employment at AWS.

Finally, Oracle suggests that Mr. Ubhi went back to work for AWS

with competitively sensitive information that now creates an organizational

conflict of interest (“OCI”) for AWS. That issue is not ripe, however. AWS

has recently submitted a proposal in response to the RFP, and the CO

currently is determining whether Mr. Ubhi’s employment at AWS constitutes

an OCI. Def.’s Resp. 4, 25–26, App. 2; AR Tab 70 at 5021.

Beyond the eight document categories, Oracle requests leave to

conduct depositions and limited discovery of Mr. DeMartino and Mr. Ubhi.

We find that plaintiff has not made the necessary threshold showing to permit

discovery; the record is sufficient as it stands. The parties agree regarding

the basic facts: both former DoD employees worked with or for AWS prior

to their employment at DoD. Both former DoD employees had some role in

the beginning stages of the JEDI Cloud procurement. Mr. Ubhi ultimately

recused himself from the procurement due to AWS’s interest in purchasing

a business that he founded. The CO made a no-impact determination

regarding their potential conflicts of interest. Although Oracle has

highlighted the possibility that Mr. DeMartino and Mr. Ubhi could have been

motivated to steer the solicitation in a direction that would benefit AWS,

many of the facts that Oracle lists are included in the AR, thus requiring no

discovery to include in the record. See, e.g., Pl.’s Reply 23–30. Additionally,

some of the “facts” are unsupported by any evidence, casting only suspicion

on Mr. DeMartino and Mr. Ubhi. See, e.g., Pl.’s Reply 24, 25.

This case is unlike Starry, which was cited extensively in the briefing

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by the parties, in several respects. Whereas the agency employee involved

in Starry was “clearly the decision maker with regard to the cancellation of

the solicitation and failure to follow GAO’s direction,” Mr. Ubhi and Mr.

DeMartino do not appear to be the final decision makers or even members of

a limited team regarding the acceleration of a single-award contract vehicle.

125 Fed. Cl. at 622. Furthermore, there are a wealth of documents in the AR

regarding who conducted the investigation and how the CO made the conflict

of interest determination, as well as the content of that investigation.

Whereas in Starry, the protestor demonstrated that the record was missing

explanations or contained pretextual or contradictory explanations. Id. at

622–24. We have at least a facially sufficient access into the agency action

here and are not faced with the likelihood of a fruitless review.

More apt is Jacobs Tech. Inc. v. United States, 100 Fed. Cl. 198, 207

(2011). In that case, the “essence of [the protestor’s] Motion to Compel

Discovery from Jacobs and to Supplement the Administrative Record [was]

to discover information from Jacobs to determine if there was a violation of

the [Procurement Integrity Act, 41 U.S.C. §§ 2101–07 (2018) (“PIA”)] or if

there was an OCI.” Oracle’s motion reflects the same goal: to determine if

there is, in fact, a conflict of interest. For instance, Oracle’s request that the

government include the entire contents of DoD’s JEDI Cloud Google Drive

would serve no other purpose other than to reveal, document by document,

exactly what information the two former employees had access to during

their DoD employment. Deposing either former employee would be an

attempt to elicit the former employees’ own understanding of their role in the

JEDI Cloud procurement and what communications they did or did not have

with AWS. Either of these examples might or might not have been

appropriate for the CO to investigate, but as the court held in Jacobs, it is

“the agency—not the Court or [the protestor]—[that] is charged with

conducting the OCI analysis and a PIA investigation (if warranted),” and thus

we will not usurp DoD’s role. Id. at 208.

We do not suggest that there are no circumstances under which the

court would allow discovery in similar circumstances, but we are at an early

stage in the procurement with at least one conflict determination ongoing and

narrow questions ripe for our consideration. Although we understand

Oracle’s concern that two former AWS employees had some level of

involvement in the JEDI Cloud procurement, and it may be that the CO

should have considered much more information than she did, the AR is

sufficient to decide whether the CO considered the appropriate information

to make her no-impact determination, or whether it was error not to do more.

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CONCLUSION

In sum, government has included in the AR the documents that it

developed and considered in making the decisions at issue, and plaintiff has

not made a sufficient showing for this court to permit supplementation or

limited discovery. Plaintiff’s motion is denied.

s/Eric G. Bruggink

ERIC G. BRUGGINK

Senior Judge

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