Amazon Web Services, Inc. v. United States
113 Fed. Cl. 102
| Fed. Cl. | 2013Background
- CIA issued an RFP (June 2012) for a single 10-year IDIQ cloud computing services contract (C2S); award on a best-value basis using technical, past performance, security, price, and risk factors.
- Two main offerors were Amazon Web Services (AWS) and IBM U.S. Federal (IBM); the agency rated AWS superior on nearly all non-price factors and awarded AWS the contract (Feb. 14, 2013) despite AWS’s higher evaluated price.
- IBM protested at GAO raising (inter alia) two discrete complaints: (1) the agency’s Scenario 5 price evaluation lacked a common basis across offerors; and (2) the agency relaxed a solicitation requirement for AWS concerning third-party software virus warranty/certification.
- GAO sustained IBM in part and recommended corrective action (reopen negotiations, amend solicitation as needed); the agency followed GAO and proposed reopening, prompting AWS to sue in the Court of Federal Claims seeking to prevent reconsideration.
- The Court held GAO’s decision irrational because GAO (a) failed to address threshold timeliness, standing, and prejudice issues (IBM could not show a substantial chance of award), (b) overlooked evidence that IBM manipulated Scenario 5 pricing, and (c) recommended overbroad corrective action; the Court granted judgment to AWS and denied relief to the government and IBM.
Issues
| Issue | Plaintiff's Argument (AWS) | Defendant's Argument (Government/IBM) | Held |
|---|---|---|---|
| Standing / Prejudice — did IBM show it had a substantial chance of award and prejudice from errors? | IBM lacked a substantial chance to win given AWS’s superiority; without prejudice IBM lacks standing. | GAO sustained protest without discussing prejudice; corrective action warranted. | Court: IBM failed to show prejudice or standing; GAO irrationally omitted prejudice analysis. |
| Scenario 5 price evaluation — was comparison on a common basis unreasonable? | Agency’s normalization and evaluation were reasonable; IBM manipulated its FPR pricing to create a protest issue. | IBM argued agency did not evaluate performance level (e.g., speed) on a common basis and so price comparison was unreasonable. | Court: GAO erred by sustaining on this ground; agency’s approach was rational and GAO ignored IBM’s gamesmanship and timeliness. |
| Timeliness — were IBM’s challenges to solicitation terms and Scenario 5 timely? | IBM’s late complaints were untimely; it knew ambiguity and waived challenge by competing. | IBM characterized issues as evaluation defects raised post-award, not timely solicitation challenges. | Court: GAO should have dismissed untimely challenges; GAO’s failure to enforce timeliness made its decision irrational. |
| Corrective action scope — was reopening the competition appropriate and narrowly tailored? | Reopening entire competition is overbroad and harms the awardee (AWS) given disclosure of award information; narrow reevaluation would suffice. | GAO recommended reopening to remedy defects. | Court: Corrective action was overbroad; agency’s following GAO lacked rational basis; declaratory relief for AWS sufficient. |
Key Cases Cited
- Turner Constr. Co., Inc. v. United States, 645 F.3d 1377 (Fed. Cir. 2011) (agency implementing an irrational GAO recommendation lacks a rational basis)
- Labatt Food Serv., Inc. v. United States, 577 F.3d 1375 (Fed. Cir. 2009) (prejudice is a threshold standing requirement in bid protests)
- Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007) (patent ambiguity/waiver doctrine bars late challenges to solicitation defects)
- Ala. Aircraft Indus.-Birmingham v. United States, 586 F.3d 1372 (Fed. Cir. 2009) (agency action is arbitrary if it fails to consider an important aspect of the problem)
- PGBA, LLC v. United States, 389 F.3d 1219 (Fed. Cir. 2004) (standards for discretionary injunctive vs. declaratory relief in procurement cases)
- Honeywell, Inc. v. United States, 870 F.2d 644 (Fed. Cir. 1989) (deferential arbitrary-and-capricious review of agency procurement decisions)
- Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990 (Fed. Cir. 1996) (not every procurement error requires overturning an award; protestor must show material significance)