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Amazon finalizes $600 million cloud computing contract

IBM attempted to reopen bidding on the CIA contract, the home for online shopping, consumer electronics and… government-funded cloud computing for the Central Intelligence Agency (CIA)? According to a judge in the U.S. Court of Federal Claims, that will be the case moving forward, despite an IBM attempt to win the contract back.

On Oct. 7, Amazon defeated IBM Corp.’s attempt to reopen bidding for a $600 million CIA contract for cloud computing. Judge Thomas Wheeler of the U.S. Court of Federal Claims in Washington granted Amazon’s bid after an administrative hearing. Wheeler only filed a decision, a written opinion will come later.

IBM originally appealed to the Government Accountability Office (GAO) in July to reopen bidding on the CIA contract. The GAO agreed with IBM’s appeal, saying the CIA failed to properly evaluate prices in their selection process. Amazon then sued after the GAO ruling was handed down in order to keep the original contract in place.

“We are disappointed with the ruling from the U.S. Court of Federal Claims, reversing the GAO’s recommendation to reopen the competition and correct flaws in the bidding process,” an IBM spokesperson said in a statement to Bloomberg. “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 says it plans to appeal the decision moving forward. If it cannot win appeal, however, this contract loss will continue a recent losing streak for IBM. In late September, the Department of Justice (DOJ) forced the company to pay a civil penalty over allegedly discriminatory hiring practices in foreign job listings.

Amazon, meanwhile, has had more success in the legal realm lately. The DOJ ruled in its favor against Apple's e-book price fixing, and Amazon has been able to take its fight against collecting New York sales tax all the way to the Supreme Court.

Assistant Editor

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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