Red Hat sues Swiss government over $39M Microsoft contract

Red Hat has filed suit with the Swiss Federal Administrative Court, asking it to cancel a contract for desktop software and services that a government agency awarded to Microsoft without calling for competitive bids, the company said.

The contract for standardized desktop software licenses, applications for clients and servers, maintenance and third-level support is worth an estimated 42 million Swiss francs (US$39 million) over three years.

The Swiss Federal Bureau for Buildings and Logistics said it awarded the contract directly to Microsoft because for technical reasons, no other bidder could meet the requirement, and there was no adequate alternative available. In those circumstances, Swiss law allows government agencies to award contracts without seeking competitive bids.

However, there are alternatives to Microsoft's software and services -- and other government bodies including the Swiss Federal Agency for Computer Sciences and Telecommunications and the Swiss Federal Institute for Intellectual Property (IGE) are already using them, according to Red Hat, which supplies enterprise Linux software that competes with some of Microsoft's offerings.

Open-Xchange, a supplier of open-source groupware that can be linked to Microsoft Outlook, is also seeking to overturn the contract.

"We have alternatives to what Microsoft is offering, so at least we should have a chance at the bidding process," said Frank Hoberg, Open-Xchange's founder and executive vice president of sales and marketing.

"At the end of the day, the government could save money," he said on Tuesday.

The contract awarded to Microsoft was a renewal of an existing one -- but, said Hoberg, "The IT landscape changes so rapidly, it makes sense to have the freedom to change components without lock-in."

"Open source is a good alternative because it is based on open standards and open APIs so that all these components can interact with no lock-in," he said.

Sixteen other companies, mostly Swiss or German software developers or systems integrators, have also joined the action, Red Hat said on Thursday.

The Bureau for Buildings and Logistics offers advice on construction and procurement of buildings, and has a team of legal advisers who offer guidance on public procurement processes to other organizations.

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