IBM has withdrawn its challenge to Amazon’s $600 million cloud-computing deal with the Central Intelligence Agency.

“In light of the government’s recent submissions emphasizing its need to move forward on the contract, IBM has withdrawn its motion,” IBM said in a statement to CruxialCIO. “IBM maintains its position that the GAO’s [Government Accountability Office’s] findings were appropriate.”

What to Do:

Use a cloud reference architecture from the National Institutes of Standards and Technology. Identify privacy risks in a cloud contract. Ensure that data in a federal cloud is available for legal discovery. Preserve audit logs for cloud services.

IBM has ceded the CIA round of the federal cloud stakes to Amazon Web Services.

Ready Tweet and the CIA did not immediately respond to CruxialCIO’s request for comment.

The deal will allow Amazon Web Services to build a private cloud service in the CIA’s data centers.

The GAO had sided with IBM and recommended that the CIA reopen a bidding process for the contract but called Amazon a “superior technical solution,” according to VentureBeat.

In the case Amazon Web Services Inc. v. United States, Case No. 13-00506, U.S. Court of Federal Claims, Judge Thomas Wheeler ruled on Oct. 7 in favor of Amazon after it had sued the GAO.

Amazon’s bid was $54 million higher than IBM’s according to GigaOM. Federal agencies are increasingly moving their data to the cloud.

The federal government remains a major market for Big Blue. On Oct. 21, IBM announced it had secured a a five-year, $30 million contract with the U.S. General Services Administration (GSA). The GSA will use IBM’s SmartCloud for Government to build an order management service system with advanced analytics. The cloud will help the GSA improve its supply chain and predict customer needs, according to IBM.

“IBM SmartCloud will enhance visibility into GSS channel operations and make sense of the big data within, but also optimize inventory and provide considerable process innovation; resulting in improved business processes to manage the agency’s vast supply chain and logistics operations,” Anne Altman, general manager of IBM US Federal, said in a statement.

“This will reduce costs; creating more efficient outcomes for GSA customers, and ultimately translate into a benefit for the taxpayer,” Altman said.

By Brian T. Horowitz