AWS Officially Wins $600M Cloud Computing Contract with CIA as IBM Withdraws Appeal

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A contract worth roughly $600 million to provide cloud services to the CIA is now securely in the hands of Amazon Web Services after competitor IBM has withdrawn from a series of challenges to the bidding procedure.

The coveted four-year government contract was originally awarded to AWS in January, but subsequently contested by IBM that the bidding process had not been carried out in a fair manner.

IBM’s complaints were based around the price of AWS’ bid ($54 million more than IBM’s proposal), a change to software certification provisions, and an assessment of its auto-scaling capabilities.

In June, the Government Accountability Office released a report (PDF) recommending that the CIA reopen the competition and amend the RFP as to ensure that proposals are prepared and evaluated on a common basis.

Earlier this month, AWS was able to persuade the CIA not to reopen the contract bidding to the disappointment of IBM. However, IBM withdrew its formal appeal, allowing AWS to move forward with the four-year contract.

The CIA contract win gives AWS some credibility in the government cloud sector, having achieved FedRAMP requirements and with an office in the works just outside of Washington DC.

And as some commentators have remarked, this could be something of a turning point for government computing projects in general, which have long been awarded to a handful of large companies such as IBM, Oracle, HP, Dell, SAP, SAS, and Verizon. The confidence shown in AWS makes it seem that the playing field for government cloud service providers is now more even.

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  1. re: your point at the end about how this could be a turning point, how is AWS not a included in "a handful of large companies?"