Last week, Google filed a lawsuit against the U.S. Department of the Interior over not considering Google Apps as an option for a productivity suite for its 88,000 employees when the government agency issued a call (otherwise known as an RFQ) for applications. Specifically, the DOI stated upfront in the RFQ that the email solution had to be part of the Microsoft Business Productivity Online Suite. Google is alleging that this is anti-competitive and that if Google were to submit a proposal, not only would it come in at a much lower price point than a Microsoft contract, but it would meet all of the DOI’s security requirements.
The twist in all of this: President Obama issued a statement shortly after he took office that essentially reaffirms Google’s point. In this memo from March 2009, the White House states that “Excessive reliance by executive agencies on sole-source contracts (or contracts with a limited number of sources) and cost-reimbursement contracts creates a risk that taxpayer funds will be spent on contracts that are wasteful, inefficient, subject to misuse, or otherwise not well designed to serve the needs of the Federal Government or the interests of the American taxpayer. Reports by agency Inspectors General, the Government Accountability Office (GAO), and other independent reviewing bodies have shown that noncompetitive and cost-reimbursement contracts have been misused, resulting in wasted taxpayer resources, poor contractor performance, and inadequate accountability for results.”
Essentially, Obama is suggesting that contracts that limit sources are not only non-competitive but they encourage wasteful spending at the hands of the American taxpayers. Directing that an email solution has to be part of the Microsoft Business Productivity Online Suite could very well run afoul of this structure.
The memo does concede that “in certain exigent circumstances, agencies may need to consider whether a competitive process will not accomplish the agency’s mission. In such cases, the agency must ensure that the risks associated with noncompetitive contracts are minimized.”
According to the complaint, the DOI said that Google Apps didn’t meet the security needs of the agency. Google contends that it does have a federal government compliant security infrastructure in place, and the decision was based on limiting the scope to Microsoft products. In this case, it looks like the risks associated with this non-competitive contract were not minimized, otherwise Google would not have found the grounds to file an arbitrary lawsuit.
New York City also issued a non-competitive search for a productivity suite when it signed city’s employees up for Microsoft’s suite a few weeks ago.
We’ve contacted Google for comment and will update when we hear back.
UPDATE: Here is a statement Google released to TechCrunch:
“Google is a proponent of open competition on the Internet and in the technology sector in general. Here, a fair and open process could save US taxpayers tens of millions of dollars and result in better services. We’re asking the Department of Interior to allow for a true competition when selecting its technology providers.”