Google wins stay of Interior award to Microsoft for cloud

Thursday - 1/6/2011, 7:09am EST

By Jason Miller
Executive Editor
Federal News Radio

In the battle for cloud computing supremacy in the federal government, Google landed the latest victory over Microsoft.

A Court of Federal Claims judge ruled Tuesday that the Interior Department must stay an award to Microsoft because it violated the Competition in Contracting Act and rules in the Federal Acquisition Regulations.

Judge Susan Braden remanded the procurement back to Interior "for additional investigation or explanation," according to a redacted version of the ruling.

"As a proponent of open competition on the Internet and in the technology sector in general, we're pleased with the court's decision," said a Google spokesperson.

In an e-mail, Microsoft replied:

"The Department of the 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," said a Microsoft spokesman. "The judge's decision does not address this fundamental determination. We believe the full record will demonstrate that this award is in the best interest of the government and taxpayers."

The spokesman added that Microsoft can't publicly comment further due to its ongoing relationship with DOI.

The Interior Department could still appeal the injunction, a process that would likely take months to resolve. The agency declined to comment Wednesday.

Google filed a lawsuit in October alleging Interior did not conduct a fair and open procurement to move more than 80,000 employees to a single e-mail, messaging and collaboration system.

Google initially filed a bid protest with the Government Accountability Office. GAO, however, dismissed the protest saying since Google didn't have a contract under the General Services Administration's schedules, it did not have standing. Interior issued a request for quote through the GSA schedules Aug. 30 to "selected vendors."

Google then took their protest to federal court, which issued its ruling ahead of Interior self-picked deadline of Jan. 25 to award a contract under the RFQ. The contract is worth more than $50 million over five years.

The court's decision adds another chapter into what's quickly becoming a fierce battle between the two software giants to establish themselves as premier providers of cloud computing for the federal government.

Google recently beat out Microsoft and others to provide GSA with e-mail services through the cloud.

A short time later, the Agriculture Department announced it has mostly implemented Microsoft's e-mail-as-a-service system in the cloud.

Microsoft turned up the heat on the competition a notch when it made a big deal about the location of its data center in the continental United States.

Google, Unisys, the prime contractor, and GSA refused to say whether the Google data center was located in the U.S.

In this latest battle over providing e-mail to Interior, the court found that Google would suffer "immediate and irreparable harm" if the agency awarded a contract later this month to Microsoft. The court states Microsoft would "achieve organizational lock-in and cost Google an opportunity to compete."

The court also found that Google made repeated attempts over the last three years to prove they are qualified to provide similar services. Interior violated the Competition in Contracting Act because it tried to justify a sole source procurement despite other qualified vendors existing and were interested in competing.

"The court, however, discerns no basis in the present administration record to support Google's allegations of bad faith," the injunctions stated. "Likewise, the court discerns no improper conduct by Microsoft, the actions of which show only competitive zeal and interest in customer satisfaction."

Interior has been planning to consolidate more than 13 disparate e-mail systems since 2007. Officials have been talking to Microsoft and Google about their e-mail in the cloud systems since 2008, the court documents state.

But in May, June and July different Interior officials determined the agency would move to Microsoft without issuing a RFQ, the documents show.

In fact, Interior chief information officer Bernie Mazer asked Rhea Suh, the assistant secretary for policy, management and budget, to sign a departmentwide policy making Microsoft the standard for messaging and collaboration software. Suh signed the policy July 15.

Additionally in June, Interior modified an existing contract with Dell Services to purchase Microsoft licenses for a pilot program of 5,000 users.

Meanwhile, time and again, Interior officials reassured Google that it would conduct a full and open competition.

By Aug. 19, Mazer requested and received approval for a limited source justification for a RFQ for only resellers of Microsoft's business productivity online suite for federal agencies.

Interior issued the RFQ 11 days later to only those "select vendors," and Google filed its first protest in September with GAO and a second complaint with the federal court in October.

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