HP, rivals spar over $3.5B IT contract with U.S. Navy

How much does $3.5 billion mean to ailing PC maker HP? Quite a lot, considering it made just half that figure during its second-quarter earnings, down year-over-year.

Because it turns out you need computers to help blow stuff up. Image: U.S. Navy

HP's rivals are less than pleased with the U.S. Navy's bid to renew its work with the   computing maker , and are protesting the $3.5 billion contract.

The Navy has kept HP as its closest IT partner for years. But to shake things up and have backup and redundancy — in case something catastrophic happened to HP (which looking at its sales figures, things aren't looking so great) — the computing giant had to include additional partners.

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The five-year contract, first signed in 2008 and set to expire this quarter, is now in conjunction with AT&T Government Solutions, IBM Global Business Services Federal, Lockheed Martin Services, and others. 

The contract will help about 800,000 sailors, marines and civilians in ports in the U.S. mainland and coast, Hawaii, and Japan. The deal is HP's largest government contract, and represents at the time of writing about two quarters worth of direct revenue, based on  the company's second-quarter earnings in May .

But a coalition of other technology firms which were bidding against HP, led by Computer Sciences Corp. and Harris Corp., want to rain on HP's parade and have the deal looked at again. The two have filed a petition with the U.S. Government Accountability Office (GAO), according to Bloomberg, which first reported the story.

According to Bloomberg, the solicitation and evaluation process was "rigorous and thorough," and HP has "every confidence" with its selection.

These "protests" are not uncommon. Just a few weeks ago, IBM filed a report with the GAO over a contract signed by the U.S. Central Intelligence Agency (CIA) with Amazon to create a private cloud

IBM wanted a slice of the $600 million cloud pie, but few details are known, as with most things with the CIA, the deal is classified.