SAP protests Oracle win of Air Force contract

31.10.2005
Business applications vendor SAP AG is challenging the the loss of a multimillion-dollar defense logistics contract to rival Oracle Corp.

Last week, Oracle announced that it had won an $88.5 million contract to implement the U.S. Air Force Expeditionary Combat Support System (ECSS), beating out a number of rivals, including SAP. The project's aim is to retire some 500 legacy systems in favor of a single supply chain management application from Oracle.

Last Friday, the German vendor, in response to the lost business, filed a formal protest with the U.S. Government Accountability Office, a nonpartisan watchdog agency. The company filed the complaint through its U.S.-based subsidiary SAP Public Services Inc.

The protest was filed to the GAO by the company's legal team, said a company spokeswoman. The Air Force was notified Monday.

SAP claims that the Air Force is not getting the best deal. In a statement Monday, the company alleged that according to the government's own evaluation criteria, the ECSS would be a "best value" implementation, meaning the system picked would offer the lowest risk while delivering mission capability. Meeting those two combined objectives was "significantly more important than price," SAP said. In turn, in a written evaluation issued after the contract's award, the Air Force stated that "SAP far exceeded Oracle in the required mission capability criteria and was rated the lowest-risk offer."

"SAP firmly believes that the Oracle proposal does not reflect the best value and lowest-risk solution, and that the SAP offering is the superior solution for the U.S. Air Force," said Steve Peck, president of SAP Public Services. "We look forward to a formal review of the process, procedures and selection criteria for this award."