Air Force pans ZDS tardiness

The Air Force has run into delivery problems with Zenith Data Systems on more than 10 percent of the orders placed on that company's Desktop V PC contract and has put its longtime contractor on notice to fix them.

Ken Heitkamp technical director of the Air Force Standard Systems Group Montgomery Ala. which administers the Desktop V contracts held by ZDS and Hughes Data Systems said: "We have had start-up problems with the ZDS contract. We have received about 740 orders and out of those orders about 75 have been more than five days late....We have a 10-day delivery requirement and at this point those 75 orders are beyond a 15-day window."

Three of the ZDS orders are more than 20 days late for delivery Heitkamp said. SSG he added "has talked to Zenith about this and we have asked them to provide us with a corrective action plan." ZDS ships its own PCs on the contract.

ZDS competes for orders on the Desktop V contract against Hughes. Heitkamp last week said "We have made our customers aware that they may have slight delivery problems with Zenith and they do have an alternative vehicle with Hughes." He added that "we have not had any delivery problems with Hughes " which supplies PCs from Micron Electronics Inc. and reduced instruction-set computing workstations from Digital Equipment Corp.

Even if ZDS resolves its delivery problems Air Force buyers need to shop carefully as the fiscal year draws to a close Heitkamp said because "the funding available for microcomputers within the Air Force this year is tight."

Pat Gallagher ZDS' sales vice president said the merger with Packard-Bell earlier this year and a change of production facilities from a ZDS plant in St. Joseph Mich. to the Packard-Bell plant in Sacramento Calif. resulted in some initial "birthing" problems with Desktop V that have been rectified.

"Two months ago we had some problems. August was better and now we are actively pursuing new orders " he said. ZDS which has held every major Air Force PC contract for the past decade except the Desktop III procurement awarded to Unisys Corp. "has worked through all kinds of problems with the Air Force and [the late deliveries on Desktop V are] not a major problem " he said.

Air Force customers Gallagher added should not have any concern about the quality of the computers manufactured in the Packard-Bell plant which has taken some hits for quality on consumer PCs. "Everything that comes out of Sacramento for the U.S. government is a different product [from consumer-oriented Packard-Bell PCs] " Gallagher said. "We use different production lines and even the parts are totally different."

Despite such difficulties Gallagher said ZDS is "shipping like gangbusters on the Desktop V contract" and estimated that the company may be outselling Hughes "by a 10-to-1 ratio." Tom Walters Hughes' vice president said "We have been seeing our orders doubling each week over the past several weeks." Neither company would detail the number of PC orders they have received or their dollar value.

Heitkamp said the Air Force has received orders for about 6 000 computers to date on Desktop V. He put the dollar value at "about $20 million in orders...but that includes peripherals and software as well as computers." While these numbers pale in comparison with orders on the Desktop IV contract which hit 19 000 a month in the last three months of the first fiscal year of that procurement Heitkamp said there are key differences between the two contracts.

"DT V is not available to the Army Navy and Marines as was DT IV and we have lower funding levels this year.... We also have a smaller Air Force " Heitkamp said. Gallagher of ZDS predicted that total calendar 1996 Desktop V sales would hit 40 000.

Neither Hughes nor ZDS plans to introduce any major technology upgrades to their Desktop V lines at this week's Air Force Information Technology Conference in Montgomery but both have them in the works for next fiscal year. ZDS has added a Pentium Pro 200 MHz processor to its contract with the price of a factory-installed unit running slightly above $200. Hughes' Walters said his company "is in the process of adding a state-of-the-art Pentium Pro to the contract."

In other Desktop V news Hughes said it has a formal partnership agreement with Government Technology Services Inc. E.O. Knowles Hughes' president said GTSI will concentrate on sales of Desktop V to federal civilian agencies which can buy up to 20 percent of the value of the $924 million contract. Hughes offers a range of Digital Alpha workstations on that vehicle. Dendy Young GTSI's president said the partnership will "leverage" the strengths of both companies in marketing those two contracts.

On the small-business front it appears that the Air Force will not award a set-aside contract until after the end of the fiscal year. George Fuster president of International Data Products Corp. said the Air Force has informed him the small-business portion of the Desktop V contract will not be awarded "until October due to agency-level protests." Fuster said the two protests by McBride Associates of New Mexico and Telstar of Ontario Calif. have been resolved to the stage where "we expect to get a call for [best and final offers] this month."

* * * * *

The case of the missing Air Force notebook PCs


Eugene Rossel vice president of Unitek Technology Inc. a small Ontario Calif. PC reseller and manufacturer believes the Zenith Data Systems/Packard-Bell marriage has fouled up service and repair causing three notebook computers belonging to a mission-critical Air Force unit to end up lost.

Unitek sold 95 ZDS notebook computers to the Air Force's 68th Electronic Combat Group - which flies EC-130 "Compass Call" signal-jamming aircraft - in late 1995. In June of this year Unitek sent four of the systems to a ZDS repair center in Memphis one was returned and the other three were "apparently lost " according to Rossel.

Rossel said he has placed numerous phone calls to ZDS and Packard-Bell to track down the computers experiencing long waits on the telephone and receiving incorrect information. In frustration he faxed Benny Alagem Packard-Bell's president a note saying "We have put in an inordinate number of calls and hours with your company in trying to get these notebooks repaired/returned and now they can't be found in the system."

Rossel added "How can you stay in business with this type of service? The Air Force has threatened to go through procurement channels on your large contracts if they don't get their equipment back."

Pat Gallagher ZDS' sales vice president said Packard-Bell has taken over "dispatching" maintenance and repair calls but said the problems encountered by Rossel are an isolated occurrence. "I've never heard of any problem like this and it comes as a bit of a surprise " Gallagher said.

But he added "this is our problem and we will do everything to make him whole...including shipping him new computers if that's necessary.


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