Oracle Corp files protest over Pentagon cloud computing contract

A sign marks a building housing Oracle offices in Burlington, Massachusetts, U.S., June 21, 2017. REUTERS/Brian Snyder/File Photo

(Reuters) - Oracle Corp ORCL.N filed a protest on Monday with the U.S. Department of Defense over its plans to award a cloud computing contract that could be worth up to $10 billion to a single company instead of allowing for multiple winners.

The Defense Department opened the competition in July and said a single winner would allow for the most rapid adoption of the technology. It said the deal’s initial two-year period would provide time to ensure the Joint Enterprise Defense Infrastructure cloud contract was up to standards, and that new contractors would be needed for other cloud computing demands in the future.

Oracle spokeswoman Deborah Hellinger said in a statement on Tuesday that the single award assured that the Department of Defense would be locked in a contract with a legacy cloud provider for a decade or longer.

Hellinger said that approach was “contrary to industry’s multi-cloud strategy, which promotes constant competition, fosters innovation and lowers prices.”

The Government Accountability Office has until Nov. 14 to respond to the protest. Bids are to be accepted through September.

The deal has been closely watched because Inc AMZN.O has been considered a top contender.

The competition has attracted criticism from companies that fear Amazon Web Services, Amazon’s cloud unit, will win the contract, snuffing out hopes that others will break into government cloud computing. Amazon Web Services is the only company the U.S. government has approved to handle secret and top secret data.

Other U.S. companies expected to compete include Microsoft Corp (MSFT.O), Oracle Corp (ORCL.N), IBM Corp IBM.N and Alphabet Inc’s (GOOGL.O) Google.

Reporting by Kara Carlson