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Federal Eye
Posted at 03:10 PM ET, 10/17/2011

Cloud computing contract with ties to Microsoft and Google needs changes, GAO says


(Jonathan Alcorn - BLOOMBERG)
A proxy battle between Google and Microsoft in their ongoing war to provide lucrative cloud computing services to the federal government appears to have resulted in a decision favoring Microsoft.

The General Services Administration, which is spearheading a contract program to help federal agencies use Web-based e-mail services, must rework the deal to better address terms that would have allowed technology firms to base computing centers in countries including Afghanistan, Yemen and Somalia, but not in more tech-friendly countries like Brazil, India and South Africa, according to a decision published Monday by the Government Accountability Office.

Two small contracting firms, Annapolis-based Technosource Information Systems and Reston-based TrueTandem, filed bid protests with GAO, arguing that GSA’s deal would have allowed winning contractors to base their computing centers in the war-torn countries that GSA considers Trade Agreements Act-designated countries, but not in countries with developing tech sectors, like Brazil, India and South Africa, which are not considered TAA compliant.

GAO agreed, concluding that GSA had not provided any meaningful explanation for the limitations and failed to prove there was “a legitimate government need” for the stipulations.

Technosource and TrueTandem are Microsoft resellers, according to their Web sites and people familiar with the ruling.

Two firms associated with Google, Onix Networking Corporation and Unisys Corporation, filed as interveners in the case, giving them the ability to testify on the matter.

Advocates for “cloud computing,” or Web-based computing, say it saves space and money by allowing computing resources to be pooled.

The value of the GSA contract in dispute is not yet known, because it is being set up as a “blanket purchase agreement,” or a program open to companies already part of a GSA schedule. Being included in the program doesn’t guarantee work for a company; it simply gives firms a chance to be selected.

Monday’s decision is the latest development in Microsoft and Google’s heated competition to provide federal agencies with platforms for cloud computing. Both have already received notable government contracts; Microsoft won the job of shifting the Agriculture Department’s 120,000 e-mail accounts to the cloud, while Google partnered with Unisys on a high-profile contract to move GSA’s e-mail accounts to the cloud.

With intense competition often comes protests. Late last year, the GAO reported that 2,299 protests were filed in fiscal 2010, up from 1,989 the prior year.

Still, it’s hard to win a protest. The GAO only upheld a protest 19 percent of the time in 2010, up slightly from 18 percent in 2009 but down from a recent high of 29 percent in 2006.

In its decision issued Monday, GAO also faulted GSA for being ambiguous with other terms of the deal regarding Internet routing.

But GAO upheld GSA’s requirement for a “government community cloud” limited to federal, state and local government entities. Keeping government data separate from other data avoids the risk of security breaches, GAO said.

Under federal statute, GAO reviews bid protests and issues recommendations that are usually adopted by federal agencies. GSA has 60 days to inform GAO of what it plans to do with the recommendations.

GSA and the companies involved in the decision did not immediately respond to requests for comment.

Censer covers government contracting for The Post’s Capital Business , a weekly business publication.

Follow Ed O’Keefe on Twitter: @edatpost

Follow Marjorie Censer on Twitter: @commoncenser

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By and  |  03:10 PM ET, 10/17/2011

Categories:  Contracting

 
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