Interior awards $35M cloud email contract to Google vendor

Slavoljub Pantelic /

New deal represents a 40 percent savings over previous Microsoft award that set off a multiyear legal fight.

This story has been updated to include comments from the Interior Department.

The Interior Department late Monday awarded a $35 million contract to Onix Networking Corps. to move Interior's 90,000 employees to the cloud-based Google Apps for Government email system.

This could mark the end of a multiyear legal squabble between Google and Microsoft.

Microsoft vendor Softchoice originally won a $60 million contract to manage the Interior email transition in 2010. Google challenged that solicitation and Interior ultimately agreed to withdraw it in September 2011. The department rebid the contract in February.

The dollar values of bids were redacted from legal documents, so it’s not clear if the Google vendor’s original bid drastically undercut the Microsoft vendor’s bid. Price is typically only one of several factors that agencies take into account when seeking information technology services.

Google’s chief argument in the legal fight was that the 2010 solicitation was effectively rigged in Microsoft’s favor and Interior officials had told Google, at least early in the contracting process, that the search giant would not be considered.

The transition to Google Apps is expected to save Interior $500 million by the end of 2020, an agency spokesman said in an email.

“Implementing a departmentwide, cloud-based email system that helps modernize the ways we do business while cutting costs is good government, plain and simple,” Interior Secretary Ken Salazar said in a statement. “We will continue to identify efficiencies to save time and taxpayer dollars using advances in technology to provide better service for less.”

Interior will join numerous other agencies that have moved their email systems to the cloud, including the Agriculture Department and the General Services Administration.

The Office of Management and Budget has directed all agencies to shift three services to cloud storage by May and expects to save $5 billion annually by moving roughly one-fourth of the government's computing to the cloud.

Email is a popular choice for cloud service because it's comparatively easy to transfer and doesn't pose many of the security concerns that can stall other cloud transitions.

Cloud-based systems also are significantly cheaper than office-based systems and typically offer an array of tools beyond simple emailing, such as calendar and document sharing functions.