IBM, Verizon to compete for $10 billion in government cloud work

The U.S. Department of the Interior plans to close or consolidate 400 data centers in its move to the cloud

IBM, Verizon and eight other companies will compete for US$10 billion worth of work to help move the U.S. Department of the Interior's IT systems to the cloud.

The Department of Interior (DOI) anticipates saving over $100 million a year between 2016 and 2020 by shifting workloads from the 400 data centers that it now maintains.

"These contracts will not only allow us to move these apps to the cloud, but move them in a well-planned, methodical way," wrote Andrew Jackson, DOI deputy assistant secretary for technology, information and business services, in a statement.

Ten companies have each been awarded an Indefinite Delivery Indefinite Quantity (IDIQ) contracts that will allow them to compete for individual task orders in building out the Interior Department's cloud. AT&T, IBM, CGI Group, Unisys, Verizon, Lockheed Martin, Aquilent, Autonomic Resources, Global Technology Resources and Smartronix all were awarded contracts.

Typically with an IDIQ contract, a company is not awarded any money initially. An IDIQ is often referred to as a license to hunt, meaning that it is a set of terms that have been pre-negotiated between the vendor and the agency to expedite the process of issuing work orders.

With this IDIQ, the DOI will issue task orders for individual projects, which these 10 companies will compete for. Each company can be awarded up to $1 billion of work for DOI.

Other U.S. federal government agencies can use the IDIQ contract vehicle for their own work as well.

The first project under this contract vehicle will be to set up and host an SAP implementation. The agency will also issue task orders for virtual machines, storage, database hosting, secure file transfers, Web hosting, as well as for maintaining development and test environments.

The contract vehicle was scheduled to be issued in May, but was held up by a protest from a vendor that was not included in the final selection. CenturyLink argued that the contract wording was too vague to be truly competitive. The Court of Federal Claims struck down that challenge last week.

The DOI has been working with cloud computing for awhile. In 2012, the agency began consolidating all of its email and collaboration services to a cloud service, Google Apps for Government.

For IBM, the DOI contract is potentially the largest cloud computing job the company has been awarded. IBM expects that it will use the assets from its recent purchase of IaaS (infrastructure-as-a-service) provider Softlayer, which it plans to use in its Smart Cloud for Government hosted service.

Comprised of 16 bureaus and offices, the DOI oversees federal owned lands and U.S. natural resources, including 500 million acres of park lands. Its annual IT budget is more than $1 billion a year.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com

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