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Labor inks $50 million cloud email deal with Microsoft vendor


Correction: The original version of this story mistated the number of people using Interior's cloud email system. It's 72,000. 

The Labor Department will pay a vendor up to $50 million to move its employees and contractors to a cloud-based Microsoft email system, according to an award notice.

The contract also appears to include systems for Web-based e-discovery, records management and software-as-a-service tools, according to recent solicitation documents.

The Department first sought a vendor for cloud email services in August. The plan at that point was to combine legacy systems from the department’s nine major divisions into a unified email system with three separate domains, one for the Bureau of Labor Statistics, another for the Office of Inspector General and a third for the remainder of the agency, according to the request for proposal.

The award, which went to the vendor InfoReliance, was posted Monday and may still be protested until early February. InfoReliance is also the supplier of an internal social network used by the National Nuclear Security Administration.  

Cloud-based email systems make it easier for federal employees to access their accounts from personal computers, smartphones and tablets. Cloud systems are also typically cheaper to run than systems stored in a government-owned data center.

Google and Microsoft are, by far, the most popular cloud email systems among federal agencies and vendors offering the two systems have long competed for a larger share of the government pie. Google and Microsoft engaged in an extended legal battle ending in 2012 over a contract to move the Interior Department’s 72,000 users to the cloud. That $35 million contract eventually went to a Google vendor.

Other agencies that have already moved to the cloud include the Agriculture Department, the National Oceanic and Atmospheric Administration and the General Services Administration .

Technology officials expect to ultimately save $5 billion annually by moving about one-fourth of the government’s $80 billion information technology budget to the cloud. In addition to email systems, popular candidates for the cloud transition have included public-facing websites and some internal dashboards and information sharing systems.  

Cloud storage is typically is cheaper than storing information in on-site data centers because clouds can pack computer programs more tightly and customers buy storage space and energy as they do utilities -- paying only for what they use. This allows agencies to use more storage some months and less storage other months.

GSA entered into blanket purchase agreements with 17 cloud email vendors Aug. 30. That means future agencies that move to the cloud will have the option of simply purchasing the service through a GSA-approved vendor rather than bidding out a contract as Labor did. 

(Image via Bulatnikov/

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