CIA faulted for choosing Amazon over IBM on cloud contract

Jun 19, 2013
A man crosses the Central Intelligence Agency (CIA) logo in the lobby of CIA Headquarters in Langley, Virginia, on August 14, 2008. The CIA selected Amazon over IBM to build a cloud computing service for the spy agency even though IBM's proposal carried a lower price tag, according to a government report.

The CIA selected Amazon over IBM to build a cloud computing service for the spy agency even though IBM's proposal carried a lower price tag, according to a government report.

IBM protested the CIA's decision to the (GAO), the investigative arm of Congress, which sided with IBM on two of its main objections, officials said Wednesday.

The GAO concluded that the CIA had failed to evaluate prices in each firm's proposal in a fair, comparable way and that the agency had waived a requirement in the project proposal only for Amazon, its report stated.

"We sustain the protest because the agency's adjustment of scenario prices was unreasonable in that it did not result in evaluation on a common basis," the GAO said in its report issued last Friday.

The contract to build a secure cloud for the CIA is reportedly valued at up to $600 million over four years.

The GAO recommended the reopen the competition and amend the request for proposals to rectify the problems cited in the audit.

The CIA has 60 days to decide how it will respond and has not indicated how it will proceed, though US agencies almost always follow the GAO's advice.

"At this time the Agency is reviewing details of the GAO decision," CIA spokesman Todd Ebitz said in an email.

Amazon's estimated price for the cloud computer project was about $54 million higher than that offered by IBM, but the CIA concluded the price difference was offset by a "superior technical solution" from Amazon, according to the GAO report.

The report created a stir in the tech world as it indicated Amazon would be installing cloud services inside CIA data centers, in a break with its standard practice of offering extra over the Internet.

Amazon Web Services executives have previously argued that "private clouds" connected to data centers do not quality as authentic cloud services, as they are cut off from the public Internet.

Under the project, the contractor would "provide a copy of its existing public cloud (modified where necessary) to be installed on government premises," the GAO report said.

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User comments : 7

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h20dr
not rated yet Jun 20, 2013
Well, that's easy to figure out. IBM doesn't have huge user data bases to exploit.
phoenix7
not rated yet Jun 20, 2013
Probably because amazon lobbied some officials for a better deal. This is same reason why the government often chooses more expensive apple products over cheaper alternatives for the military and schools in Los Angeles.
MartinN
1 / 5 (1) Jun 20, 2013
IMHO, Amazon specializes in "cloud" computing in ways IBM cannot even begin to think about. This is why they were chosen over IBM. FYI, did you know IBM profited off the Nazi regime too despite international calls for its boycott of the regime during WW2? Let's see them shake that legacy with an apology.
alfie_null
not rated yet Jun 20, 2013
FYI, did you know IBM profited off the Nazi regime

I don't know that. But unless you live under a rock, you deal with products from many companies that had dealings with Nazis back in the WW2 era. As those companies are now run by a different group of people I really don't get your point.

Amazon specializes in selling books. And oh yes, they figured out a way to market their excess computing capacity a few years ago. I'd dare say IBM has a significantly larger number of computer science PhDs (or PhDs of any other sort) they could throw at your IT problems than Amazon.
eddiemayan
not rated yet Jun 20, 2013
Amazon is better, of-course deal have to be closed with them. IBM is good but not better than Amazon Service. Quantity of Data centers are high of Amazon. CloudReviews listed Amazon at top of the list of service provider of Cloud Service.
MartinN
1 / 5 (1) Jun 20, 2013
But unless you live under a rock, you deal with products from many companies that had dealings with Nazis back in the WW2 era. As those companies are now run by a different group of people I really don't get your point.


Amazon isn't one of them, i.e. Jeff Bezos didn't go shake hands with Nazi officials like Thomas Watson did. -That- is the point ... that you are free to ignore of course or pretend not to get. Despite insistance from the international community at that time to boycott the Nazi regime, IBM dealt with them in spite of that.

Yes, we cannot change the past - the only thing I'd expect at this point from IBM is an apology. Where is it?
El_Nose
not rated yet Jun 21, 2013
@MartinN

I am sorry are you suggesting that Amazon -- know information retrieval better than the inventors of the database. That Amazom might know more in infrastructure that I might give you... but the reason database interaction is now purely mathematical is because of efforts in IBM labs. the Calculus of data retrieval that we all hate in college CS courses was written and proved by IBM.

-- why apologize for doing business

BTW did you know that most American companies that had contract with Germany kept those contracts intact until the bombing of Pearl Harbor .. just like IBM. It wasn't until we the US were forced into the war that companies took a serious look at their relationship with Germany. IBM just happens to be the biggest name that is still around.

IBM is not in the business of being a cloud service provider for thousands of comapnies -- it just delievers solutions to computational problems. And i will take an IBM solution over Amazon any day of the week.