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Google Wins Freeze on U.S. Contract With Microsoft

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Google Wins Freeze on U.S. Contract With Microsoft
Google, based in Mountain View, California, and Onix Networking Corp., a licensed Google seller, sued the Interior Department in October, claiming the department didn’t provide a “full and open” competition for the contract. Photographer: Tony Avelar/Bloomberg

Jan. 5 (Bloomberg) -- Google Inc. won a temporary court order stopping the U.S. Interior Department from moving ahead with an e-mail project that favored Microsoft Corp., after alleging improprieties in bidding on the $49.3 million contract.

A federal judge in Washington halted the U.S. from proceeding with a Microsoft e-mail system for the department’s 88,000 employees in an order unsealed yesterday. U.S. Court of Federal Claims Judge Susan Braden cited deficiencies in the procurement process in her order.

Google, based in Mountain View, California, and Onix Networking Corp., a licensed Google seller, sued the Interior Department in October, claiming the department didn’t provide a “full and open” competition for the contract.

“Without a preliminary injunction, the award will put into motion the final migration of Interior’s e-mail system, achieve ’organizational lock-in’ for Microsoft, and cost Google the opportunity to compete,” the judge wrote in a 27-page decision.

Braden said she was informed that the department intended to award the contract on Jan. 25.

In its Oct. 29 complaint, Google said it tried repeatedly through meetings and presentations to persuade Interior officials to consider its Google Apps product as the agency searched for a new e-mail service.

The company was told by Interior officials that there were concerns Google’s product wouldn’t be able to meet the agency’s security requirements, according to the complaint. Google claimed it explained to Interior officials how its “Government-only cloud” product would resolve those concerns.

Objectives and Requirements

Google alleged the government wouldn’t provide the company a list of objectives and requirements for the contract.

Google claimed that while it was seeking to compete for the business, Interior began a pilot program that purchased Microsoft software licenses for 5,000 employees in the Bureau of Indian Affairs.

The bid request put out by Interior on Aug. 30, 2010, “specified that only the Microsoft Business Productivity Online Suite-Federal could be proposed,” making it impossible for the company to compete for the work, Google claimed in the complaint.

Braden said the record of the bid process submitted to the court appeared incomplete. The judge wrote she found it “unusual” that an Interior official was having monthly meetings with Teresa Carlton, vice president of Microsoft’s federal business, “but apparently took no notes or didn’t maintain them.”

‘Open Competition’

“As a proponent of open competition on the Internet and in the technology sector in general, we’re pleased with the court’s decision,” Google said in an e-mailed statement.

Microsoft, in an e-mailed statement, said Interior “determined that the dedicated, U.S.-based cloud solution offered by Microsoft met its minimum security and other requirements after a careful and thorough evaluation, and that Google’s solution did not.”

“The judge’s decision does not address this fundamental determination,” the statement said. “We believe the full record will demonstrate that this award is in the best interests of the government and taxpayers.

Charles Miller, a spokesman for the U.S. Justice Department, declined to comment.

The case is Google Inc. v. U.S., 10-743, U.S. Court of Federal Claims (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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