quoted from: http://www.kentucky.com/mld/kentucky/15248617.htm
Kentucky state government confirmed yesterday it has chosen Dell as its exclusive supplier of desktop and laptop computers.
A state official said the contract, which replaces an old system that used multiple vendors, offers cost savings and a common base platform for all employees to prevent software incompatibility issues.
Under the contract, Dell will provide OptiPlex desktop computers and Latitude laptops for state use. The company will also provide data migration service and tagging of all the computers for inventory accounting use.
In a statement, Dell said it anticipates the deal could be worth up to $100 million over 10 years. The current contract is for two years but could be extended in two-year periods for up to 10 years.
Hiren Desai, an attorney with the State Finance and Administration cabinet, noted that the figure is only an approximation.
Since 1996, the state had contracts in place with several resellers of computer brands including Dell, Hewlett-Packard, Gateway and IBM, Desai said. Those contracts expired this year, and the state opted to rebid the contracts to one vendor.
“The problem before was you would go to three vendors and you’d say, ‘I want to buy 10 computers; give me a price,'” Desai said. “(Now) we’re going to one vendor and saying, ‘We’ve got 40,000 computers: What are you going to do for us?’ … it’s got a lot of potential for cost savings.”
Not all state computers will be immediately switched. As agencies need new desktops or laptops for employees, the computers will be ordered under the program.
Desai estimated the state has as many as 38,000 computers in service.
The deal may also allow the state to replace computers at a faster pace. Desai said the state’s average life cycle for computers is now about six years. He said computers could be replaced every three to four years under the new program.
Under the new contract, laptop computers would cost $1,035 and desktops would be $599, Desai said. No average price was available for computers purchased under the old plan since it consisted of a variety of contracts, but Desai said the prices do represent substantial savings.
The desktops come with a 2.8 gigahertz processor, 1 gigabyte of memory and a 40 gigabyte hard drive with 17″ Flat panel monitor.
The contract also includes a three-year warranty agreement that features next-day, on-site repair.
Wow, this just seems shady to me. I understand the reasons that this is done. The state is attempting to get a better price because of volume and they are also very big on “standardization” across the state now.
To me though this just seems like a really bad thing. Less diversity is always bad. More regulation is bad. Now that Dell has a locked in contract, what is their motivation to keep the prices low? Before they were facing prices from three other companies and it was only a few months ago that they lowered their prices BECAUSE HP lowered theirs. We were paying $500 for just the computer and now they are touting the fact that you are paying that much for it and a monitor, but they weren’t the ones that got the price down that low. HP came in and dropped it. Dell just followed suit.
We buy Dells in Edmonson County, so my problem is not with the company or the hardware that they produce. My problem is that there isn’t a choice for anyone that doesn’t want Dell. There isn’t even an option.