IBM steps back from CIA deal

cloud concept with man in suit

The battle between two tech behemoths to build a cloud computing infrastructure for the CIA and the broader intelligence community appears to be over.

IBM, which saw its successful bid protest of Amazon Web Services' $600 million deal with the CIA overturned in early October by the U.S. Court of Federal Claims, has withdrawn the injunctive action it filed immediately after the ruling by Judge Thomas Wheeler.

Big Blue had asked the court to halt contract work between the CIA and AWS while it considered an appeal. The government claimed in a subsequent court filing that an injunction and further delay on the contract would be harmful to national security. While IBM is not budging on its contention that it offers a superior product, an appeal of Wheeler's decision now appears unlikely, based on IBM's withdrawal. However, the company has not entirely ruled it out.

"In light of the government's recent submissions emphasizing its need to move forward on the contract, IBM has withdrawn its motion," IBM spokesperson Clint Roswell told FCW. "IBM maintains its position that the GAO's findings were appropriate."

The CIA has been trying to procure a commercially developed cloud infrastructure within the IC for nearly two years, the past nine months of which have involved a high-profile legal battle between IBM and AWS.

IBM's bid protest, upheld by the Government Accountability Office in June, forced the CIA to rebid the contract to both companies, each offering additional services and likely cheaper costs.

But AWS rallied by successfully taking the government to court, stating the GAO should not have upheld the protest from IBM and asking that the original deal, worth up to $600 million over four years, be upheld. Once the federal judge overturned GAO's ruling and ordered the CIA and AWS to get back to work on their original deal, IBM was left with few legal options.

While IBM has had recent successes in the federal cloud market, particularly with the General Services Administration and the Interior Department, AWS's deal enhances its reputation as a serious player in the federal cloud computing market – a big deal considering it is already the largest public cloud infrastructure provider in the world.

AWS offered no comment when reached by FCW.

About the Author

Frank Konkel is a former staff writer for FCW.

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Reader comments

Thu, Oct 31, 2013 John Weiler United States

I commend IBM for taking the high ground, and letting CIA move out with its critical implementation of IC-ITE. There are many opportunities awaiting IBM armed with new Cloud acquisitions. The real challenge ahead for agencies is how to modernize legacy systems before moving them to the cloud, recognizing the supporting vendors have zero interests in supporting reduction in their revenue streams.

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