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Google sues U.S. over bidding for e-mail contract

Google's lawsuit alleges the Interior Department stacked the deck in favor of Microsoft's e-mail system.

November 02, 2010|By David Sarno, Los Angeles Times

Google Inc., pushing to expand its e-mail and cloud computing business, took the federal government to court to change a bidding process that it said stacks the deck in favor of rival Microsoft Corp.

Google, which has been battling Microsoft across the country to gain a foothold in the $20-billion office software market, sued the U.S. Department of the Interior for allegedly excluding Google's bid to provide its e-mail system for the agency's 88,000 employees.

According to the lawsuit, the department specified that it would consider only systems that used Microsoft's business e-mail software, a limitation Google called "unduly restrictive of competition."

"Based on the risk assessments and market research," Interior wrote in its specifications, Microsoft's software was the "only commercial product that satisfies every requirement identified by the department."

The suit, filed Friday in the U.S. Court of Federal Claims, alleged that Interior violated a federal law that mandates government agencies to use open and competitive procedures in soliciting contracts. Google seeks to halt the department's process until it complies with that law.

"Google is a proponent of open competition on the Internet and in the technology sector in general," said Google spokesman Andrew Kovacs. "Here, a fair and open process could save U.S. taxpayers tens of millions of dollars and result in better services."

Kendra Barkoff, a spokeswoman for the federal agency, said the department could not comment on pending litigation.

For several years, Google has been battling to win territory in the global market for office and e-mail software, a sector Microsoft has long dominated with its Outlook and Office products.

To distinguish its offerings, Google has long touted its Internet cloud, an approach that stores customers' e-mail and documents in Google's remote data centers rather than on servers operated by businesses themselves. The cloud approach allows major customers to save money by outsourcing their own in-house e-mail systems.

But Google has run into difficulties in its attempts to loosen the tight grip that Redmond, Wash., software giant Microsoft has on the e-mail market, which includes decades of relationships with some of the world's largest businesses and government agencies.

In October 2009, Google beat out Microsoft to win a high-profile $7.2-million contract to provide e-mail for the 30,000-employee City of Los Angeles. But today, nearly half of the plan is still caught in a bureaucratic mire while Google works to clear security hurdles at the Los Angeles Police Department, which has 13,000 employees.

Last summer, Google was frustrated in its efforts to offer its Google Apps e-mail product to the state of California, which ultimately chose Microsoft for the state's 200,000 employees.

Google, which had been engaged in long discussions with the state over the contract's security and usability, ultimately opted not to submit a bid and complained about what it saw as a pro-Microsoft bias in the bidding process. The state expressed regret that Google did not submit a bid.

The Department of the Interior also objected to the security of Google's system, according to the lawsuit. The department required that any new cloud system store its messages on a server that contained only e-mail from other federal agencies. Google's system holds e-mail from state, federal and local governments.

For its part, Google alleged that Microsoft's competing government e-mail software was "a new product...[with] no publicly identified customers who have either purchased or implemented" it.

Nor has the product, called Business Productivity Online Suite, yet received the federal security certification that is part of the contract's requirements, as Google's system had.

Microsoft declined to comment.

Google maintained that Interior officials had quietly been opening the door to Microsoft before the bidding process began in late August.

At an April meeting, the suit said, William Corrington, the department's chief technology officer, told Google executives that "a path forward had already been chosen" and that Google couldn't compete because its product didn't comply with Interior's security requirements.

david.sarno@latimes.com

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