Last fall, Oracle won the contract for the Air Force Expeditionary Combat Support System (ECSS) project, which is intended to retire hundreds of aging systems in favor of a single supply chain management application. SAP also competed for the contract and filed a complaint with the Government Accountability Office (GAO) when the contract was awarded to Oracle. SAP claimed that Oracle's proposal did not reflect the best value or the lowest-risk option.

On Friday, SAP was notified by the GAO that its appeal had been denied, said a spokeswoman for the Germany-based software vendor. It's unclear what move the company will make next.

"Obviously we're disappointed," said the SAP spokeswoman. "Our team felt we had strong grounds for the appeal, and we still feel we're the best option for the Air Force. We're not alone in losing protests."

She said SAP is awaiting a copy of the decision for review, and will then look at its options.

"SAP enjoys strong relationships with more than 110 defense and security customers around the world," she said. "We are committed to continuing our excellent support to these organizations and to pursue additional contracts."