Interior Department Picks 10 Combatants for $10 Billion Cloud Bakeoff

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The Department of the Interior has picked 10 firms to compete for cloud outsourcing contracts valued at up to $10 billion.

The U.S. Department of the Interior has tapped 10 companies to compete for a series of cloud computing projects that could involve a total investment of up to $10 billion. The agency has structured the deal as a rolling bakeoff between 10 systems integrators – IBM, Verizon, Unisys, AT&T, Lockheed Martin, Aquilent, Autonomic Resources, CGI, GTRI and Smartronix – who will compete for each phase of the project.

“Individual projects will be awarded via task orders, one for each project, following a one-off competition for the project between the ten selected vendors,” said Andrew Jackson, Deputy Assistant Secretary for Technology, Information and Business Services for the Department of the Interior, in a statement on the agency’s web site. “By doing it this way, Interior hopes to ensure the most competitive prices throughout the life of the contract. These contracts will not only allow us to move these apps to the cloud, but move them in a well-planned, methodical way.”

The first project will be for SAP application hosting. Additional services will include virtual machines, storage, database hosting, secure file transfers, Web hosting, as well as development and test environments. The DOI said the launch of its cloud services will allow it to begin closing or consolidating “potentially hundreds of DOI data centers” under the Federal Data Center Consolidation Initiative (DCCI).

IBM demonstrated its first-strike capability with a press release yesterday saying it would work with the Interior Department on an indefinite deliver/indefinite quantity (IDIQ) contract is valued up to $1 billion, saying the DOI “may use” IBM cloud computing technologies, services and hosting. A number of media outlets quickly issued stories touting IBM’s contract before Verizon let media know that it was also part of the award, which involved 10 companies.

The Department of the Interior is the steward of 20 percent of the nation’s land, more than 500 million acres worth. It’s also the largest water supplier in 17 states, and maintains relationships with 566 federally recognized Native American tribes. The sixteen Bureaus and Offices that manage this mission spend in excess of $1 billion a year on IT.

The department is undergoing a decade-long transformation of its IT systems, moving to a cloud computing model. The DOI is hoping to save roughly $100 million per year, starting in 2016 through at least 2021 in infrastructure and IT costs.

IBM, for its part, was touting its potential to play a key role in that transformation.

“IBM has been delivering trusted and secure cloud services to business and government clients for decades, and working with virtualization technologies for more than 40 years,” said Anne Altman, General Manager, IBM US Federal. “Our Cloud offerings are backed by a long history of successful work in hardware, software and services wrapped in world renowned security offerings, unmatched R&D, and secure supply chains.  We’re committed to infusing these capabilities, proven security and reliability, and leading-edge technology into our work with the US Department of the Interior over the next decade.”

Other US government agencies can also benefit from the Interior’s effort through the DOI Foundation Cloud Hosting Services vehicle.  The vehicle also allows request for quotes/task orders to be issued on behalf of other government customers including both civilian agencies and the Department of Defense.

“This is a change we’ve been eager to make for a while,” the DOI’s Jackson, noting delays due to a lawsuit from CenturyLink (Savvis) over the contracts. “The cloud hosting award was on hold until recently, when a contract protest was dismissed by the U.S. Court of Federal Claims. Now that we can finally move forward with these contracts, we’re expecting significant reductions in hardware, software, and operations costs to the taxpayer.”

About the Author

Jason Verge is an Editor/Industry Analyst on the Data Center Knowledge team with a strong background in the data center and Web hosting industries. In the past he’s covered all things Internet Infrastructure, including cloud (IaaS, PaaS and SaaS), mass market hosting, managed hosting, enterprise IT spending trends and M&A. He writes about a range of topics at DCK, with an emphasis on cloud hosting.

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