Bloomberg News

IBM Wins Biggest U.S. Cloud-Computing Contract After CIA Loss

August 14, 2013

International Business Machines Corp. (IBM:US) said today it won its biggest cloud-computing contract from the U.S. government, a 10-year agreement valued at as much as $1 billion.

The Interior Department awarded similar pacts to nine other suppliers, including Lockheed Martin Corp. (LMT:US), which also said the agreement was its largest federal cloud contract.

The deals might reach a total of $10 billion, allowing the agency to speed its efforts to move information to the cloud, the Web-based pool of shared resources such as data storage and software. Other U.S. departments may eventually tap the program.

The agreement shows that “IBM’s ability to help governments transform with new technologies, like cloud, continue to grow,” Michael Rowinski, a spokesman for the Armonk, New York-based company, said in an e-mail.

The award is a coup following IBM’s loss to Amazon.com Inc. in the competition for a four-year, $600 million cloud contract with the Central Intelligence Agency. IBM may get another chance at that business following a successful protest to a federal office that arbitrates contract disputes.

While the Interior Department awards were issued in May, the work and many of the companies’ announcements were delayed by CenturyLink Inc. (CTL:US)’s protest.

CenturyLink Protest

CenturyLink, based in Monroe, Louisiana, in March sued the government in the U.S. Court of Federal Claims, partly because it said the Interior Department’s price and technical evaluation criteria were unreasonable. It lost last month, and it didn’t make the Interior Department’s list of 10 winners.

The agency’s cloud effort may end up being the biggest across the federal government, Afzal Bari, a senior technology analyst for Bloomberg Government, said in an interview.

The 10 companies selected to provide services under the contract will have a competitive advantage in the expanding cloud-computing industry, Bari said.

Other winners include CGI Group Inc. (GIB:US) of Montreal; Verizon Communications Inc. (VZ:US), based in New York; Unisys Corp. (UIS:US), based in Blue Bell, Pennsylvania; and AT&T Inc. (T:US), based in Dallas.

Four closely held vendors made the list. They are Aquilent Inc., based in Laurel, Maryland; Smartronix Inc., based in Hollywood, Maryland; Autonomic Resources LLC, based in Cary, North Carolina; and Global Technology Resources Inc., based in Denver.

To contact the reporters on this story: Kathleen Miller in Washington at kmiller01@bloomberg.net; Chris Strohm in Washington at cstrohm1@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net


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Companies Mentioned

  • IBM
    (International Business Machines Corp)
    • $195.24 USD
    • 1.61
    • 0.82%
  • LMT
    (Lockheed Martin Corp)
    • $169.97 USD
    • 1.87
    • 1.1%
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