Amazon files court complaint over CIA cloud deal

Amazon Web Services has filed a complaint against the federal government in the U.S. Court of Federal Claims, challenging the need for and scope of corrective action taken by the Central Intelligence Agency in following recommendations made by the Government Accountability Office.

GAO made the recommendations to the CIA in June in sustaining a bid protest filed in February by IBM after the CIA awarded AWS a contract worth up to $600 million over four years to build a private cloud for the entire intelligence community.

Taking the issue to the U.S. Court of Federal Claims – the final destination for some of the most contentious procurement cases – could help AWS avoid another bid protest from IBM if the CIA were to again award AWS the cloud contract, potentially expediting a resolution. AWS seeks a response by September 23, in the filing.

"We believe strongly that the CIA got it right the first time," said an AWS spokeswoman. "Providing true cloud computing services to the intelligence community requires a transformative approach with superior technology. We believe that the CIA selected AWS based on AWS’ technically superior, best value solution, which will allow the Agency to rapidly innovate while delivering the confidence and security assurance needed for mission-critical systems. We look forward to a fast resolution so the Agency can move forward with this important contract."

The Central Intelligence Agency says it has adhered to recommendations made by GAO and taken steps to address concerns raised by the watchdog agency, but that doesn't necessarily mean that IBM would get another crack at the contract.

"In response to the GAO decision, the CIA has taken corrective action and remains focused on awarding a cloud contract for the intelligence community," CIA spokesperson Todd Ebitz told FCW.

Had the CIA opted not to follow GAO's recommendations, the agency would have had to notify GAO within 60 days –by early August – sparking a notification of Congress.

The exact steps the CIA has taken are not being disclosed, but the agency said it has chosen a path that adheres to GAO's finding that the CIA didn't evaluate prices comparably under one of the solicitation's pricing scenarios, and that it materially relaxed a solicitation term for AWS during post-selection negotiations.

GAO recommended the agency reopen negotiations with both companies – including amending the solicitation if necessary – and make a new decision after reevaluating.

Partnership in the making?

So, is the CIA sticking with AWS – the largest public cloud infrastructure provider in the world and increasingly a player in the federal market – or switching to IBM, a long-time leading federal contractor that has made a slew of recent moves to compete in the fast-growing infrastructure-as-a-service space? Or might there be some sort of partnership?

The CIA did not answer that question – nor did attorneys for IBM or AWS – but at this point there is little reason to believe the CIA would flip-flop and pick IBM.

For starters, the GAO ruling made clear the CIA felt AWS's proposal, while more expensive, provided a "superior technical solution" with a lower risk assessment than IBM's. The ruling also highlighted doubts the CIA had about IBM's auto-scaling capabilities, or its ability to increase or decrease computing power based on need. IBM defended its capabilities in the GAO ruling, but the CIA clearly took issue with them.

In addition, procurement law gives significant discretion to agencies in adhering to recommendations made by GAO. If the CIA can make necessary corrections to the procurement where GAO determined it erred before, the agency would likely not have to take a more extreme course of action, such as rebidding the contract.

Such action would be a major setback for the CIA, which pulled the procurement back once before, in August 2012, taking corrective action on its bid solicitation following AT&T and Microsoft protesting its request-for-proposal specifications.

The CIA, together with the National Security Agency, is tasked with providing cloud computing services – including data, utility and storage clouds – to all 17 agencies within the IC per the Intelligence Community Information Technology Enterprise (IC ITE) strategy.

Attorneys for AWS and IBM did not respond to requests for comment from FCW, nor did AWS' corporate offices. In a statement previously iterated by IBM, spokesperson Clint Roswell said IBM "remains committed to providing enterprise-level secure and robust cloud solutions and looks forward to a renewed opportunity to show our capabilities to fulfill the requirements of this important agency."