Google wins injunction in government purchasing case

7 January 2011

7 January 2011 | Lindsay Clark

A US court has granted a temporary order to halt the procurement of a Microsoft email system by a government department.

The US Department of the Interior had planned to begin a project to migrate around 80,000 employees to a new email system. This was part of a contract worth around $49 million (£32 million) which was scheduled to be awarded towards the end of January. Court documents show the department expected to base the system on technology from Microsoft.

However, internet company Google has now won a preliminary injunction from the United States Court of Federal Claims to halt the procurement process, pending further investigation. The company had complained that it did not have a fair chance to compete for the contract, which would create an email system based on cloud computing technology.

The court awarded the injunction on the basis of a number of points, which included; that it was in the public interest; Google would be harmed if the procurement went ahead; and there was a likelihood of success based on the case’s merits.

“Without a preliminary injunction, the award will put into motion the final migration of Interior’s email system, achieve ‘organisational lock-in’ for Microsoft, and cost Google the opportunity to compete,” the court said.

However, its ruling added: “The court emphasises that it has made no judgment as to whether Interior’s basis for this procurement was rational or whether the procurement was conducted in a manner that was arbitrary and capricious.” The latter was among other arguments made by Google.

A Microsoft spokesman said: “The Department of the Interior determined that the dedicated, US-based cloud [computing] solution offered by Microsoft met its minimum security and other requirements after a careful and thorough evaluation, and that Google’s solution did not. 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.”

A Google spokeswoman said: “As a proponent of open competition on the Internet and in the technology sector in general, we’re pleased with the court’s decision.”

The Department of the Interior was unavailable for comment.

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[Story updated on 17 January 2011]

The case demonstrates how IT buyers need to be careful over decisions which routinely result in the selection of dominant suppliers such as Microsoft, said Mike Davis, senior analyst at Ovum.

He told SM that the competition between Google and Microsoft, together with the importance of public sector contracts, made further legal challenges likely. “This is another front in the war [between] Google and Microsoft. Every time one of these [deals] comes up, I expect to see the lawyers going for it. It’s going to be fun.”

The case also exposed how IT did not always follow best practice in procurement, Davis added.



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