Google isn't exactly on solid footing with federal authorities these days, whether they are getting their wrists slapped over Street View embarrassments or struggling to continue with their acquisitions unfettered. So when it comes to to the Department of the Interior's choice to use Microsoft's BPOS instead of Google Apps, one has to wonder if maybe, just maybe, Google should have kept its mouth shut and kept raking in the billions.

Also read Mary Jo Foley's take on the Google-DOI lawsuit:

"Google sues U.S. government over hosted

e-mail bid against Microsoft"

Of course, Google does have a lot at stake here. Not only does the company need to diversify beyond its search business, but if it wants to be all things Internet to all people, then it needs to be at the forefront of software as a service and online productivity.

Given that the Department of the Interior didn't even consider Google Apps in its RFQ and treated Microsoft's competing Business Productivity Online Suite as the a priori sole solution that could meet its security needs, this does set a dangerous precedent. If Google didn't challenge this, the assumption in high security settings (which includes more than a few government agencies worldwide and virtually any company with intellectual property to protect) would be that BPOS was the only viable option and that Google could not compete in this space.

Next: But wait...isn't Google FISMA-certified, while BPOS still isn't? »

Interestingly, Google is the only such solution that is FISMA-certified; BPOS will most likely not achieve this government-backed assurance of data security until sometime in 2011. Which means, of course, that Google has a case here. However, as the Wall Street Journal pointed out,

Google faces a relatively high bar to prove to the court that the DOI acted inappropriately. The agency must only provide a "rational explanation" as to why it wrote the RFQ in such a manner, such as cost considerations, compatibility, or the ease of training users...

Procurement law is painful at best, but it seeks to protect taxpayers from funding solutions that either chosen carelessly or chosen for more nefarious purposes (such as graft or kickbacks). In this case, outward appearances suggest that the DOI simply had a Microsoft ecosystem in place and chose to continue building that out. While this is hardly unreasonable and the $59 million in business is small potatoes for both Google and Microsoft, the idea that Google's Apps are not on equal footing in terms of security or robust tools suitable for any agency is the very antithesis of Google's message around Apps.

As far as Google is concerned, the point should be secure, web-based content creation and collaboration with the Internet as the platform. If the Internet-as-platform isn't good enough for the government , while Microsoft-as-platform is, that's a much bigger loss for Google than a mere $59 million in loose pocket change.

So, with that in mind, should Google have still kept its collective mouth shut? Is it too important to maintain positive ties with the administration that has so far been fairly easy on the company (yes, the AdMob deal took a while to close and upcoming deals will also be placed under the microscope, but the AdMob inquiry still passed through the FTC panel 5-0)? And doesn't Google have a lot to lose if it loses this lawsuit? The answer to each of those questions is probably "Yes."

But this is Google we're talking about and the young, impetuous company also has a lot to lose by letting the DOI set a precedent and send a message to other enterprises that neither the web, nor Google are good enough as computing platforms to meet high-end, large-scale enterprise needs. This isn't about $59 million. It's about the way that we use the Internet to do business and clearly Google wants and needs to be at the center of that.