Amazon wins key ruling over IBM in CIA cloud contract battle

IBM seeks reopening of the bidding process for the $600 million contract, arguing that Amazon did not satisfy all the criteria for the contract.

Saul Loeb/AFP/Getty Images

Amazon Web Services won a key court ruling Monday in its battle with IBM over a $600 million contract to construct a cloud infrastructure for the Central Intelligence Agency.

After hearing arguments on the matter Monday, Judge Thomas Wheeler of the U.S. Court of Federal Claims ruled today in favor of Amazon's request for judgment on the administrative record in the matter. The written text of the opinion has not yet been published but is expected shortly.

An IBM statement indicated it would appeal the ruling.

"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 company said in a statement. "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."

An Amazon Web Services representative said the company welcomed the news.

"We are pleased with the court's decision and look forward to resuming our work on this important contract with our customer," the representative said

After the Seattle-based company won the contract to build a Web-based infrastructure for the CIA, rival contract bidder IBM protested, arguing that Amazon had not satisfied all the criteria for the contract. The Government Accountability Office, the agency tasked with evaluating government contracts and recommending challenges, agreed with IBM and reopened the bidding process, prompting Amazon to sue.

Updated 10/8 at 1 p.m. PT with Amazon statement.

 

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