U.S Military drops $1.6B VMware contract after protests
The Defence Information Security Agency (DISA) reversed a decision to award VMware Inc. with a $1.6 billion contract, following a protest by number of tech companies last February.
The Pentagon’s decision to cancel its joint enterprise licensing agreement with VMware means the Government Accountability Office (GAO) was able to dismiss protests against the award made by Amazon Web Services (AWS), Citrix Systems Inc., Nutanix and Minburn Technology Group, LLC, as per the statement at this link.
The DISA cancelled its contract with VMware on the same day.
The planned deal between VMware and the U.S. Army, Navy, Air Force and DISA was due to last for five years, but was controversial because other suppliers were excluded from the entire bidding process. DISA tried to justify its behavior in a document entitled “A Justification For Other Than Full And Equal Open Competition”, in which it claims VMware would help the U.S. Military to save money, and that it’s therefore okay to ignore free market principles.
Now, DISA has seemingly decided it no longer thinks that’s the case, though it didn’t give any reason for cancelling the deal. Neither was any reason given for the dismissal of the case brought by AWS and the others. According to the GAO, “If a protest is dismissed, we will not make the decision publicly available, unless it addresses a significant issue.” Which means the agency apparently doesn’t consider the company’s protest to be significant.
As for VMware, it’s also decided to remain silent about why the deal was cancelled, although in its most recent earnings call it did talk about a “colossal” deal with the U.S. government that was just out of reach.
And it looks like it will stay that way for the time being.
Image credit: Skeeze via Pixabay.com
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