IBM Wins Part of Protest Over $600 Million CIA Contract

International Business Machines Corp. (IBM) won a key part of a protest over the Central Intelligence Agency’s cloud-computing contract with Amazon.com Inc. (AMZN)

The U.S. Government Accountability Office, which arbitrates federal contract disputes, today sustained Armonk, New York-based IBM’s challenge of the four-year award, which has a maximum value of $600 million.

The GAO recommended that the CIA reopen negotiations with the companies and amend the solicitation “if necessary,” said Ralph White, the office’s managing associate general counsel for procurement law.

The intelligence agency failed to properly evaluate prices and waived one contract requirement only for Amazon, according to the GAO.

The GAO denied IBM’s assertion that the CIA failed to properly evaluate Amazon’s past performance, including service outages that occurred in 2012.

IBM filed the protest Feb. 26. The full decision wasn’t publicly released.

“We now anticipate the reopening of the contract proposal process,” said Clint Roswell, an IBM spokesman.

Officials with the CIA and Amazon didn’t immediately respond to calls and e-mails seeking comment about today’s decision.

To contact the reporter on this story: Danielle Ivory in Washington at divory@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net

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