Court Drops Google-Microsoft Cloud Contract SuitCourt Drops Google-Microsoft Cloud Contract Suit

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The Department of the Interior will scrap an earlier plan to award a cloud email and collaboration contract to Microsoft, and a federal judge has in response agreed to drop a Google lawsuit in which the search company had claimed that it had been excluded from the bidding process for the contract.

The government's move ends a nearly year-long saga in which Google claimed the Department of the Interior had crafted a cloud email and collaboration contract in a way that favored Microsoft, and thereby violated a federal contracting regulation that requires competition in contracting. The timing of the case, in the midst of a drive for more cloud computing in government, was significant, in that it could have had an effect on federal agencies' cloud strategies. Now, however, the case is at an end.

"We're pleased with the outcome of our discussions with the Department of Interior, and look forward to the opportunity to compete for its business and save taxpayers money," Google spokesman Andrew Kovacs said in a statement.

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Last week, Google moved for judge Susan Braden to dismiss the case "[b]ased on the [Department of the Interior]'s agreement to conduct a procurement in a manner that will not preclude plaintiffs from fairly competing." That motion was quickly followed by a response from the Department of the Interior indicating that no such agreement had yet been struck.

However, in a hearing Tuesday, the government indicated that, "in light of new developments in technology and entrants into the market," the research on which the Department of the Interior relied when it issued the original contract was no longer timely, and that it had decided to drop the procurement. Braden had earlier indicated that, if she were to rule on the merits of the case, she would rule for Google. The agency is now drafting a request for information to prepare for the possibility that it will issue a new solicitation.

"We intend to conduct research to evaluate the cloud computing marketplace's evolution over the past 18 months," Interior spokesman Adam Fetcher said in an emailed statement Thursday morning. "If the research indicates that market conditions warrant a new procurement for agency-wide cloud based messaging and collaboration services, the Department will proceed in that manner."

In response to Interior's statements at Tuesday's hearing, and after Google again orally moved to withdraw from the case, with the other parties concurring in that motion, Braden dismissed the case without prejudice, meaning that Google has the opportunity to re-file the case if the company feels it still wants to pursue a resolution in court.

The primary issue in the case was whether the Department of the Interior had sufficiently documented its research to justify the decision to exclude companies that, like Google, don't have an option for federal-only clouds. The Department of the Interior had sought a federal-only cloud due to what it said were security concerns. While Interior doesn't hold classified information, it does hold sensitive financial, Indian trust fund, and oil and gas data.