GAO Advises CIA to Renegotiate $600M Cloud Contract

June 6, 2013

The Government Accountability Office ruled Thursday the CIA should reopen negotiations on a $600 million cloud computing contract that the agency had awarded to Amazon Web Services.

GAO sided with IBM, which competed unsuccessfully for the contract, in ruling that the CIA had failed to evaluate prices comparably under one of the solicitation's pricing scenarios.

Specifics of the contract haven't been released, but Alex Rossino, a principal analyst at market research firm Deltek, said the CIA deal reflects the intelligence community's increasing appetite for data storage capacity. The CIA and intelligence community have said they want to retain all of the huge amounts of data they collect, Rossino said.

"This means that storage will be an exponentially growing requirement for the CIA and a huge area of profit for industry partners," he said. 

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