Amazon wins case versus IBM

EDITOR'S NOTE: This article was originally published on FCW.com.

Amazon Web Services scored a major victory against IBM in the battle to build the cloud computing infrastructure for the CIA, NSA and the rest of the intelligence community.

On Oct. 7, U.S. Court of Federal Claims Judge Thomas Wheeler ruled in favor of AWS, which had challenged the scope of and need for corrective action taken by the CIA in response to recommendations made by the Government Accountability office in June.

Wheeler’s ruling came just a few hours after the conclusion of oral arguments that were closed to the public. His legal opinion is not yet public record, but the ruling essentially overturns GAO’s sustainment of a bid protest filed by IBM after AWS was awarded a cloud computing contract worth up to $600 million.

Both companies have since rebid on the CIA’s procurement, but it appears from Wheeler’s ruling that the rebids are now moot. AWS’s original contract with the CIA, which FCW first reported in March, could stand as is, though it may yet include some modifications suggested by GAO.

As important a victory as this is for AWS's quest to cement itself as a major player in the federal cloud market, Big Blue is not conceding. IBM issued a statement immediately following the ruling, stating that it plans to appeal the decision.

“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,” the statement said. “IBM plans to appeal this decision. 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. In addition, 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."

The CIA declined to comment when contacted by FCW about the Oct. 7 ruling. And AWS declined to make a statement until its prospective customer had weighed in on the ruling.