IBM Quits Amazon Court Fight Over $600 Million CIA Deal

International Business Machines Corp. (IBM) abandoned its court fight with Amazon.com Inc. (AMZN) over a $600 million cloud computing contract for the U.S. Central Intelligence Agency, citing the government’s urgency to begin work on the project.

IBM withdrew its bid for a stay of U.S. Court of Claims Judge Thomas Wheeler’s Oct. 8 ruling in favor of Amazon after the Justice Department said in court papers that further delay in resolving the contract would bring “harm to the United States” and create “significant challenges” for the CIA.

Amazon sued the U.S. 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.

“In light of the government’s recent submissions emphasizing its need to move forward on the contract, IBM has withdrawn its motion,” Clint Roswell, an IBM spokesman, said in a statement. “IBM maintains its position that the GAO’s findings were appropriate.”

Roswell declined to say what further action on the contract, if any, Armonk, New York-based IBM would pursue.

Mary Osako, a spokeswoman for Amazon, didn’t immediately respond to a request for comment.

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: Andrew Zajac in Washington at azajac@bloomberg.net

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