Amazon Wins Ruling for $600 Million CIA Cloud Contract

Amazon.com Inc. (AMZN) defeated International Business Machines Corp. (IBM)’s effort to reopen bidding for a $600 million Central Intelligence Agency cloud computing contract.

Judge Thomas Wheeler of the U.S. Court of Federal Claims in Washington granted Amazon’s request for judgment on the administrative record following a hearing yesterday, according to a minute order posted on the court’s electronic docket. A written opinion will follow, according to the order.

Amazon sued in July after the Government Accountability Office, the agency that makes recommendations on challenges to contracts, sided with IBM and agreed that the CIA had failed to properly evaluate prices and had waived a contract requirement only for Seattle-based Amazon.

“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,” Armonk, New York-based IBM said in an e-mailed statement. The company plans to appeal this decision,’’ according to the statement.

“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,” the company said.

Both the complaint and Amazon’s request for a ruling in its favor were filed under seal, as was the requests by the Justice Department and IBM for a ruling in their favor.

Mary Osako, an Amazon spokeswoman, and representatives of the Justice Department didn’t immediately return calls after regular business hours yesterday seeking comment on the ruling.

The case is Amazon Web Services Inc. v. U.S., 13-cv-00506, U.S. Court of Federal Claims (Washington).

To contact the reporter on this story: Edvard Pettersson in federal court in Los Angeles at

epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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