IBM has withdrawn from a fierce legal battle over a $600m CIA cloud computing contract, leaving the deal to fall to Amazon.
IBM withdrew its bid following legal action it took against Amazon's own bid, which IBM claimed did not meet the criteria of the project. Amazon received a favourable ruling in court earlier this month.
IBM has now chosen to refrain from any further action against Amazon's bid, citing the government's need to proceed with the project as the reason.
"In light of the government's recent submissions emphasising its need to move forward on the contract, IBM has withdrawn its motion," IBM said in a statement.
"IBM maintains its position that the [Government Accountability Office's] findings were appropriate."
The Government Accountability Office had initially recommended that the CIA re-open the bidding process because it had failed to properly evaluate prices. Both IBM and Amazon re-submitted their bids, but legal action nevertheless ensued.
IBM has historically enjoyed a close relationship with US federal government agencies, and the CIA's decision to go with Amazon can be interpreted as something of a turning point in IBM's US government fortunes.
However, IBM was recently awarded a $30m contract with the General Services Administration to build its cloud infrastructure for a new order management system.