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October 8, 2013

US court favours Amazon against IBM in CIA cloud contract

IBM plans to appeal the ruling

By CBR Staff Writer

The US Court of Federal Claims has ruled in favour of Amazon against IBM over a four-year, $600m cloud computing contract with the Central Intelligence Agency (CIA).

Amazon Web Services (AWS), the online retailer’s subsidiary, beat out the US software maker earlier this year to grab the CIA deal.

After AWS secured the deal, it was protested by IBM which led to a report from the Government Accountability Office (GAO) of the US, which in its report in June said that CIA should re-work some parts of its contract negotiations to give IBM another chance to bid.

The online retailer had filed a complaint in July 2013, after the Government Accountability Office (GAO) favoured IBM.

IBM said in a statement that the company was disappointed with the ruling from the US Court of Federal Claims, reversing the GAO’s recommendation to reopen the competition and correct flaws in the bidding process.

"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 said.

Previously, after the online retailer won the contract to develop a Web-based infrastructure for the CIA, IBM protested and argued that Amazon had not met all the required criteria for the contract.

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