Last-minute bargains lure desktop shoppers

With two weeks left in the busy government buying season and a budget of $2 000 what desktop machine can you put on your desk?

According to an informal survey undertaken by Federal Computer Week PC vendors and resellers are offering a wide range of desktop configurations for about $2 000 - the price point that many federal buyers are shooting for this year.

Specially priced configurations are available on the General Services Administration's multiple-award schedule (MAS) and indefinite-delivery indefinite-quantity (IDIQ) contracts although prices on the GSA schedule appear more aggressive.

Dell Computer Corp. for example is offering a 133 MHz Pentium PC with 32M of RAM a 2G hard drive integrated networking and audio and a 15-inch monitor for $1 999 (see chart at right). This is one of a series of select configurations that Dell is offering on the GSA schedule according to Rocky Mountain a manager for federal government marketing.

"Government employees are starting to understand that the GSA schedule is a much better vehicle than IDIQ vehicles " Mountain said. "The reason is that there is no tech-refresh process you have to go through. That's why when Dell comes out with a 250 MHz Pentium Pro system two days later it can be added to the GSA schedule."

Some IDIQ vehicles do have Pentium-based PCs for about $2 000. Hughes Data Systems for example offers on the Air Force's Desktop V contract a 100 MHz Pentium system from Micron Electronics Inc. with 16M of RAM a 1G hard drive and a 15-inch monitor for $2 088. But even though this system has a five-year warranty the processor is several generations behind those available from Dell and others for about the same price.

"We're finding that with Desktop V in particular prices on the GSA schedule are lower. We're ranging about $200 to $300 lower " said Stephen Roberts federal government sector manager at Gateway 2000 Inc. He admitted that Gateway 2000 offers a three-year warranty rather than Desktop V's five-year warranty but added that "three years is becoming the life cycle of a PC right now."

Roberts said most of Gateway 2000's desktop sales off the GSA schedule are running between $2 000 and $2 200. "Many people buying with [International Merchant Purchasing Authorization Cards] are trying to get below the $2 500 threshold " he added.

Gateway 2000's schedule contract offers 133 MHz Pentium PCs with 16M of RAM 1G hard drives and 15-inch monitors for as low as $1 766 and 166 MHz Pentium PCs with 2G hard drives for as low as $2 055. Roberts said most of Gateway 2000's federal sales are for 166 MHz or 200 MHz Pentium PCs which start around $2 200.

The average desktop price in the government sector for fiscal 1996 will be $2 000 predicted Steve LeCompte vice president of IDC Government Market Services. This figure has held steady for the last year even though prices have dropped dramatically for PCs components and options.

One of the reasons the average PC price is stable is that buyers are upgrading processors as well as purchasing some options such as 17-inch monitors network cards PC Card readers and 28.8 kilobit/sec modems. "Nobody buys the basic configuration " said Brad Mack senior account manager for Sysorex Information Systems Inc. which holds the Army's PC-1 contract. Mack said many buyers are spending extra money to upgrade to 32M of RAM in order to run Microsoft Corp.'s Windows NT. He also said he sees a lot of interest in Microsoft's Office Pro for Windows 95.

Sysorex offers 133 MHz Pentium PCs with 32M of RAM 1.2G hard drives and 15-inch monitors for $2 199 while similarly configured 166 MHz Pentium PCs with 32M of RAM 1.6G hard drives 8X CD-ROM drives and 15-inch monitors sell for $2 799.

It is true that IDIQ vehicles such as PC-1 offer systems that are a little more expensive than offerings on the GSA schedule Mack admitted. But for the extra money buyers get IBM Corp. systems and three years of on-site service under the warranty. Other PC vendors offer one year of on-site service and two more years of mail-back service.

"Three or four years ago when people were running 8-bit or 16-bit applications clones were fine and dandy " Mack said. "But now customers want 200 MHz CPUs and 32-bit applications and [Integrated Services Digital Network] support. This is complex high-performance technology and clones just don't cut it. We're seeing a fundamental shift back to Tier One and Tier Two suppliers."

Government Technology Services Inc. the No. 1 reseller in the government market is offering first-tier PCs and clones for less than $2 000.

"GTSI has many options on the GSA schedule for under $2 000 " said Deirdre Posey an account representative. Specifically she pointed out the Nexar product line which GTSI started carrying in June and the Hewlett-Packard Co. line.

Nexar offers 133 MHz Pentiums for as low as $1 229 and 166 MHz models for about $1 640 (without monitors) with systems available on GTSI's GSA schedule and the National Institutes of Health's Electronic Computer Store contracts.

"Nexar sales have exceeded our expectations " said Roman Ferrer team leader at GTSI who said the company has sold 2 000 so far. "Nexar is on track to be one of our top 10 vendors for the year."

While Nexar is the "value proposition" that GTSI is offering company officials said HP products are also good buys. "As far as a mainstream box is concerned you can't beat HP " Posey said.

Not everyone is focused on price when they sell PCs in the government sector. Compaq Computer Corp. for example is touting the manageability of its Deskpro 2000 Series desktops. "Our systems feature health logs and other asset controls and fault management " said Gary Newgaard head of federal sales. "It will tell you things like the hard drive is getting out of whack so we can repair it under warranty."

Newgaard added that the Deskpro 2000s are "aggressively priced and are selling especially well." For example Electronic Data Systems Corp. offers 133 MHz Deskpro 2000s with 16M of RAM 1.2G hard drives and 15-inch monitors starting at $1 803.

While most of the sales activity is for Pentium PCs Dell is encouraging federal buyers to spend a few hundred dollars more to upgrade to a Pentium Pro processor. For $2 399 Dell offers a 180 MHz Pentium Pro system with 32M of RAM a 2G hard drive and Windows NT.

"For $400 more you have a system that's ready to run NT. You have everything you need for the next two years " Mountain said.

Dell admits however that only a small portion of government buyers are choosing Pentium Pro systems. "Twenty percent of the federal customers we talk to are seriously considering Pentium Pro while 80 percent are seriously considering Pentium " Mountain said.

At the other end of the spectrum Win Laboratories Inc. has sold several hundred 486s to buyers off the Treasury Department Acquisition 2 contract. The company is selling fully loaded 486s - including 16M of RAM CD-ROMdrives and 15-inch monitors - for $1 513. "Buyers save about $500 or $600 by staying with 486 technology " said Mark Magnussen director of business development at Win Labs.


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