Amazon Did Too Good of a Job for Government

The online retailer Amazon.com maintains a side business of operating massive Internet-capacity “cloud” farms and contracts out space to some of the world’s largest entities, including U.S. government agencies. In a case brought to light in October by a U.S. Court of Claims ruling, Amazon had won its bid against IBM for a cloud contract with the CIA, but had gone a step further by actually improving the CIA’s system and implementing a better plan. In the bizarre world of government contracts, that created a “fairness” problem, as IBM argued its rights were violated because the specified contract work was no longer exactly what was being done (i.e., the client’s work was being done better). IBM lodged a time-consuming protest, but later dropped the suit.

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