US military CANCELS US$1.6 BEEELLION VMware deal

VMware's long-hoped for US$1.6bn, five-year deal with the US military has foundered, after the Defence Information Security Agency (DISA) cancelled its request for proposal "to further analyze the Government's needs."

The cancellation was revealed last week in a new amendment to the RFP (PDF)

The planned five-year deal between Virtzilla and the US Army, Navy, Air Force, Defence Information Systems Agency and other arms of the military is controversial because it didn't give other suppliers a look-in. Indeed, the deal was the subject of a document titled “A Justification For Other Than Full And Equal Open Competition” that explains how dealing with Virtzilla alone will help the US to save money and a temporary dilution of free market principles is therefore okay.

Nutanix, Amazon Web Services, Citrix and Minburn Group therefore protested the deal.

The US Government Accountability Office (GAO) page about the case says that on March 12th, the claim made by AWS, Citrix, Nutanix and services outfit Minburn Technology Group was dismissed.

DISA's cancellation of the RFP came the same day.

Sadly there's no explanation of why the protest was dismissed on the GAO decisions page. The agency says “If a protest is dismissed, we will not make the decision publicly available, unless it addresses a significant issue.” There's no sign of this decision online, so it looks like the four-way protest wasn't considered that substantial.

Nor is there an explanation from DISA about the reason for the cancellation.

VMware's not published a press release or SEC filing about this decision, but has in earnings calls mentioned a colossal-but-just-out-of-reach US government deal. It's hard to imagine another deal worthy of such mention, but we'll tune in to the call due late April to see if the company has an update on its federal fortunes.

In other vNews, Virtzilla's announced its vCloud Air bit barn in Germany has gone live. ®