Cloud

Amazon rips GAO, IBM in lawsuit over CIA cloud deal

eye in the sky

In its lawsuit against the federal government filed in July, Amazon Web Services claims IBM's protest of its $600 million cloud computing contract with the CIA was "untimely" and "meritless," and that's just a snapshot of a 79-page document sitting before U.S. Court of Federal Claims Judge Thomas Wheeler.

The lawsuit, unsealed Aug. 20, blasted the Government Accountability Office's June decision to uphold portions of bid protests filed by Big Blue as irrational and against federal contracting law -- a "flawed" decision that AWS argues is based on a technicality and contends would not have changed the CIA's decision.

In the GAO's ruling, the oversight agency made clear AWS's solution was technically superior in the eyes of evaluators at the CIA, which chose AWS despite IBM's bid to build an on-premise, private cloud for the entire intelligence community at a lower cost.

However, the CIA followed GAO's recommendations and took corrective action, reopening discussions with AWS and IBM before accepting new contract proposals Aug. 16, according to the lawsuit. AWS, the largest public cloud infrastructure provider and a developing federal player, did not offer further comment to FCW.

Yet IBM, a long-time federal contractor that declared its growing cloud intentions by purchasing SoftLayer Technologies in June, is not about to be bullied. In a statement to FCW, Big Blue touted its historical success in government operations and said AWS had a chance to make its case when IBM protested the bid.

"Amazon had a chance to air its point of view fully and fairly at the GAO," IBM said in a statement to FCW. "We are confident the court in this case will uphold the GAO's ruling and the agency's follow-on actions implementing it. Unlike Amazon, IBM has a long history of delivering successful transformational projects like this for the U.S. government. IBM has been delivering trusted and secure cloud services to business and government clients for many years and developed virtualization technologies, which have led to cloud computing."

After a series of contract battles, legal maneuvers and carefully crafted public statements from both sides, what happens from here in the battle to build the intelligence community's cloud infrastructure is less clear.

The CIA is in charge of procuring the cloud for the National Security Agency and the rest of the IC -- the faster the resolution, the faster either company can get to work building it.

But with oral arguments in AWS's lawsuit set to begin Oct. 7, even if the CIA has accepted new bids from AWS and IBM as the lawsuit states, it is unlikely to reach a decision quickly.

Any work begun by AWS on building the cloud infrastructure was halted when IBM filed its bid protest, and it's likely the Justice Department and the CIA have agreed not to move forward on decisions until the complaint is resolved.

Complaints against GAO decisions can be slow to move through courts, and GAO decisions are rarely overturned. However, there is recent precedent for that action. In late 2012, a federal judge disagreed with GAO's ruling in a case involving the Department of Veterans Affairs.  

About the Author

Frank Konkel is a former staff writer for FCW.

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Reader comments

Thu, Aug 22, 2013 Al

My impression is that this language is pretty typical in a procurement protest situation. Can't help but notice GAO sustained on the basis of the CIA relaxing a requirement in "post-selection negotiations" (which should occur as little as possible) and a flawed price analysis. I can't tell that the technical evaluation was really contested. On a different note- I was not aware any procurement laws applied to the CIA!

Wed, Aug 21, 2013 Walter Washington, DC

IBM has had great success working with the government. I wouldn't go so far as to say the government has gained much through the relationship. IBM is far better at working the federal contracting system and their government contacts than they are at anything computer related.

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