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Amazon and the CIA: Federal Procurement on Steroids

Posted by Joseph Whitcomb on Nov 23, 2014 10:02:07 PM
Joseph Whitcomb

Is Federal Procurement Reserved for Big Firms Like Amazon?

The notoriously tight-lipped CIA usually "does not publicly disclose details of our contracts, the identities of our contractors, the contract values or the scope of work.”  In other words, if federal procurement involves the Agency, it is top secret.  Because of this, it was big news in 2013 when it was disclosed that the agency had contracted with Amazon Web Services (AWS) for a 10-year, $600 million cloud computing project.

After the publication of the contract, IBM filed a bid protest with the GAO and initially gained a favorable ruling.  The GAO found the contracting process flawed and ordered that the CIA rebid the contract (i.e. start the process over again).  On appeal, the Court of Federal Claims reversed the GAO’s decision and the contract between CIA and Amazon could finally move forward.

This summer, the CIA along will begin using the system that Amazon has spent the past year developing.  The system will service the CIA and the other 17 intelligence agencies.  The hope is that the system will allow intelligence agencies to share information more easily, avoiding intelligence gaps while also saving money.  Agencies will be able to pay only for the services that they actually use, whether that be hosting application of storing date or utilization of analytics.

Other governmental agencies including NASA have contracted with Amazon, but this contract is unique because it involves agencies whose very purpose and effectiveness depend on secrecy.  To allow a private company to play such an integral role in the maintenance of that security is an indication of the enormous amount of trust the CIA has in Amazon, as well as the importance of technological innovation in the security field.   As a detailed article from The Atlantic aptly highlights the uniqueness of the contract in just a few words, “it’s a public cloud on private premises.”

Criticism for Contract

Of course, no contract is without criticism.  Critics question whether the data stored in this outsourced cloud is really secure, both because of the nature of cloud computing and the fact that it relies on a private external company.  The CIA and Amazon believe and have stated that it is.  A senior CIA official went so far as to say that “[s]ecurity in the IC cloud will be as safe as or safer than security on our current data centers.”  On the other side of the coin, critics and analysts wonder whether Amazon will share consumer data with the intelligence community.  Amazon has said it will not.

It will be interesting to see if it is the start of a new trend in contracting, with more and more being entrusted to public sector specialized companies, particularly in the technology sector where innovation advances and changes in minutes and hours, not days and weeks like more traditional industries.

Even if you’re not Amazon, federal procurement can be a great source of business.  Whether your business is experienced at federal procurement or just getting into the game, the attorneys at Whitcomb Law, P.C. can advise and guide you.

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Topics: Government Contracting