State to buy Dell computers
State signs deal to get only Dells
By Jim Stafford
The Oklahoman
Oklahoma has signed with Dell Inc. an exclusive five-year contract for computer equipment that could be worth more than $150 million based on figures released Tuesday by state officials. Dell discounts
Prices negotiated for state agencies with Dell Inc. for desktop and laptop computers:
Entry-level mini tower: $619, 18 percent off Dell retail price
Small desktop: $629, 18 percent off Dell retail price
High-end mini tower: $824, 18 percent off Dell retail price
Notebook: $1,488, 11 percent off Dell retail price
Workstation: $1,579, 30 percent off Dell retail price
Dell's contract with the state
State Purchasing Director Tom Jaworsky signed the contract Oct. 15 mandating all agencies governed by the state's Central Purchasing Act buy their desktop and laptop computers from Austin, Texas-based Dell.
The contract is effective through Oct. 14, 2009.
The five-year deal with Dell was signed less than two weeks before the computer maker announced it will build a 120,000-square-foot sales and customer service center on the Oklahoma River a few miles west of downtown Oklahoma City. Dell first revealed plans to locate a service center in Oklahoma on July 7.
The contract timing was purely coincidental, said Scott Meacham, state Office of Finance director.
"There is no relationship between this contract and Dell's decision to locate in Oklahoma City," Meacham said. "To be honest, my guys didn't even know that contract was going on until it was announced."
Meacham said his office worked with the Department of Central Services to define the standard computer configurations the state would seek through the bidding process. A committee was appointed with representatives from several state agencies, including the Department of Corrections, Department of Human Services and Health Department to review bids.
The final contract was negotiated by the Department of Central Services, Meacham said.
Jaworsky said Tuesday that Dell competitor Hewlett-Packard has filed an Open Records Act request for all documentation surrounding the bid.
Oklahoma is at least the second state to have locked in Dell with an exclusive computer contract for agencies. In April, Pennsylvania said it signed a four-year deal with Dell worth up to $144 million.
"There is precedent for states doing this," said Dell spokeswoman Michelle Mosmeyer.
The contract does not guarantee any specific number of computers or dollar amount that the state will spend with Dell. Instead, state agencies buying computers from Dell will receive discounts of 11 percent to 18 percent on laptops and desktops, and up to 30 percent on high-end workstations.
"My information is we spend over $35 million a year on PC and PC-related products," Meacham said. "We're projecting that we buy 8,000-10,000 units on this a year and that we will save $150 a unit on average, which is about $1.2 to $1.5 million."
Using those figures, the contract could be worth $169 million to Dell.
Meacham said the contract does not include PC-related products such as printers, servers and other equipment.
"This is just the machine and monitor, basically," he said.
Dell lists all 50 states on its Web sites with purchasing contracts available to their agencies, although it is not known how many others may be exclusive to the computer maker.
In Oklahoma, both the University of Oklahoma and Oklahoma State University have their own contracts to buy computers from Dell. OSU spokesman Nestor Gonzalez said the university has purchase contracts from more than six computer makers.
The contract also allows other "non-mandated" state entities to buy Dell products using the state discount.
Meacham said while it is unusual for a government body to designate a "sole source" equipment provider, it is not unusual in the corporate world.
"In the corporate world, this is the model they follow," he said.
The contract's only downside would be if Dell were unable to deliver the required equipment, Meacham said. In that case, state agencies could fall back on "backup" contracts with other vendors, he said.
With the new addition of the Dell center coming to OKC, this is really great news for our state. Even though the state is only purchasing machines and monitors, it still shows Dell that they are welcome in Oklahoma and that we want to do business with them.
lol! 
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