Google says shut out of USDA cloud computing deal

Google didn't get the chance to compete for the largest federal government "cloud computing" deal yet announced, according to the company, adding to its concerns that government agencies are unfairly favoring rival Microsoft.

The Department of Agriculture (USDA) announced it was moving 120,000 of its employees onto email, Web conferencing and messaging systems provided over the Internet by Microsoft, generally referred to as "cloud computing." The move is the largest of its kind by a federal agency and the first by a cabinet-level department in a growing area that is hotly contested by Microsoft -- which has long provided technology to local and national governments -- and emerging competitor Google, which offers cheaper but less well-known online alternatives.

The USDA said its move to the cloud was part of a deal signed in May with computer-maker Dell Inc to provide online services from Microsoft. The government agency, which oversees the U.S. farming, agriculture and food industries, said it had been working with Microsoft and Dell for the past six months on the project, which it said would cut costs and improve efficiency. Google, which claims its services save more money than Microsoft, and that its presence in a bidding situation usually means lower prices regardless of who wins, said it had no opportunity to formally bid on the contract at any point.