US court rules for in CIA cloud contract dispute

Oct 7 (Reuters) - A U.S. court ruled in favor of Inc, which is locked in a dispute with International Business Machines over a $600 million cloud computing contract awarded by the Central Intelligence Agency, a court notice showed.

Amazon Web Services (AWS), a unit of online retailer, beat out IBM earlier this year to win the CIA contract.

When AWS won, IBM protested, triggering a report by the U.S. Government Accountability Office (GAO), which recommended in June that the CIA re-do some parts of its contract negotiations, giving IBM another chance to bid.

But the GAO also stated that AWS’s offering was superior.

Amazon filed a legal complaint against GAO’s recommendation that the CIA could give IBM another chance to bid for the contract.

On Monday, oral arguments were held before Judge Thomas Wheeler of the U.S. Court of Federal Claims.

At the end of the arguments, Wheeler ruled for Amazon and against IBM, which had intervened in the case. A written opinion will follow, according to a court notice.

The Wall Street Journal reported that IBM would appeal the ruling by the Federal Claims court. IBM and Amazon could not immediately be reached for comment by Reuters outside of regular U.S. business hours.

Public cloud computing, which AWS pioneered in 2006, lets companies rent computing power, storage and other services from data centers shared with other customers - typically cheaper and more flexible than maintaining their own.

The case is in re Amazon Web Services Inc vs United States, Case No. 13-00506, U.S. Court of Federal Claims.