Amazon Claims Victory Over IBM In $600M CIA Contract Court Case


Amazon Web Services' $600 million contract with the CIA can move forward now after a court scuffle with IBM that resulted in a win for the Internet giant Monday.

The CIA signed the multimillion-dollar, four-year contract with AWS in March to build private cloud infrastructure for the intelligence agency.

IBM protested the contract in June, saying that the CIA didn't fairly evaluate prices between the two companies during the bidding process and waived a requirement for AWS in favor of the company. The General Accountability Office sustained part of IBM's protest in regard to the price evaluation but did not agree that the CIA unfairly compared past performances, according to the GAO decision document.

[Related: Microsoft Isn't Worried That Amazon's CIA Cloud Deal Could Threaten Its Turf]

AWS then countered with its own complaint in July, saying it wanted to move forward with the contract despite IBM's protest being partially upheld. Monday's victory means that the contract will not be reopened for bidding, as IBM wanted and was suggested as part of the June GAO report.

"We are pleased with the Court's decision and look forward to resuming our work on this important contract with our customer," an AWS spokesperson told CRN.

Judge Thomas Wheeler of the U.S. Court of Federal Claims has not released a written opinion on the case yet, but the order announcing the decision said one could be expected soon.

IBM said that it disagrees with the ruling and maintains that it is the best company for the contract.

"This court decision seems especially inappropriate in light of the current times, since IBM's bid was superior in many ways, including being substantially more cost-effective. ... IBM has for decades supplied the government with proven mission-critical operations. The company remains committed to provide secure, reliable and robust cloud solutions to federal agencies," IBM said to CRN.

IBM also is involved in a bidding process for a $10 billion contract with the Department of the Interior, which is currently in limbo during the federal government shutdown.

IBM told CRN that it plans to appeal the court's decision. The judge's Monday ruling was first reported by Federal Computer Weekly.

PUBLISHED OCT. 8, 2013

See the latest cloud technologies, learn best practices, and interact with your peers at the channel’s first all-inclusive cloud event: NexGen Cloud Conference & Expo, December 4-5, 2014 at the San Diego Convention Center. Register now at  www.NexGenCloudCon.com