Google has filed a motion to dismiss its case against the federal government, nearly a year after claiming that the Department of the Interior drafted contractual documents for cloud email and collaboration services in such a way that only Microsoft could have won business from the government.

Google and one of its cloud resellers, Onix Networks, filed suit in the U.S. Court of Federal Claims in October 2010, claiming that the Interior Department ran afoul of federal requirements that government agencies use a full and open bidding process to award contracts. In January, Google won a preliminary injunction temporarily preventing the department from awarding the contract.

That order was extended several times by judge Susan Braden, most recently on September 16, on the grounds that the parties were "working toward an alternative dispute resolution that may resolve" the dispute outside of court. Braden had previously ordered the department to hire an independent expert to evaluate Google products' security and, according to a Bloomberg report, said at a recent hearing that there was "justifiable basis" to find that the government violated procurement law.

[ Google is working hard to win government business. Read: Gov 2.0: Google Readies Government Cloud ]

Now, however, Google is looking to drop the case, albeit in a way that allows the company to re-file the case in the future. "Based on the defendant's agreement to update its market research and then conduct a procurement in a manner that will not preclude plaintiffs from fairly competing, plaintiffs respectfully move for dismissal of this action without prejudice," Google's attorney wrote in a document filed with the court last Thursday.

In a move that raises questions as to whether Google may have miscalculated its motion to dismiss or whether the dispute will continue even after the case is dropped, federal attorneys said in their response to Google's motion that the parties had made no agreement, but did not object to Google's motion to dismiss the case. It remains to be seen whether Google will react to the assertion that there is no agreement in place. Neither Google nor the Interior Department responded to a request for comment.

The initial contract was estimated to be worth about $59 million over five years. It aimed to provide a single communications service for email and collaboration for the department's 88,000 users. The Obama administration has a "cloud first" policy in place that encourages federal agencies to move their IT systems to the cloud, though some agencies have remained skeptical due to security concerns.

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