Air Force BPA sales double
- By Dan Verton
- Aug 29, 1999
Sales continue to skyrocket on the Air Force Standard Systems Group's premier contract covering desktops, laptops and servers, with the volume of business more than doubling since June.
Dell Computer Corp., Gateway Inc. and Micron Electronics Inc. to date have sold $64 million worth of standard computer systems on SSG's Information Technology Tools program, known as IT2.
Dell, which at last count was in third place with $8.1 million in sales, ejected Gateway from the top seat by racking up total sales of $23.7 million to date, according to Robert Frye, SSG's executive director. Gateway is in second place with $20.5 million, and Micron is in third with $20.1 million.
SSG began the IT2 initiative this spring by selecting computer manufacturers to supply desktops, peripherals and rugged portables. When IT2 is complete, the Air Force will have put in place enough blanket purchase agreements to replace a wide variety of indefinite-delivery, indefinite-quantity (IDIQ) contracts, including Desktop V, one of the Defense Department's oldest and most successful PC procurement programs.
Frye pointed to the recent appearance of CDW-G Inc. on the IT2 scene and the end-of-year buying spree as the two most plausible reasons for the increase in sales activity. The Chantilly, Va.-based company in July picked up an $83 million BPA of its own, covering desktop, portable and server systems. The award was an effort by SSG to broaden the available product base for its customers, according to company officials [FCW, Aug. 2].
"CDW-G is just now coming into play on IT2, [but] they've offered some great deals," Frye said. "It should be interesting to see how that affects the other [vendors'] prices," Frye said.
Larry Kirsch, senior vice president of CDW-G, called pricing just one factor in the company's success, adding that the Air Force recognized that CDW-G brought a lot of other things to the table, such as electronic-commerce capabilities and knowledgeable product managers.
"Our philosophy is that competition is a good thing," Kirsch said. "We get the advantage of offering [systems from] the top manufacturers rather than a single brand," he said, referring to CDW-G's bid of Hewlett-Packard Co., Compaq Computer Corp. and Toshiba America Information Systems Inc. offerings. "We offer the e-commerce solutions that people have been asking for."
Harry Heisler, vice president and general manager of Micron Government Computer Systems Inc., said although there is bound to be more jockeying for position between the second- and third-place vendors on IT2, he is very happy with Micron's performance on the contract. In fact, he said Micron this month sold $4.5 million worth of systems to the Coast Guard that will show up on the next sales report.
However, overall sales on IT2 are "still lagging behind last year and where SSG actually thought it would be," Heisler said. He added that the Kosovo emergency supplemental funding passed by Congress may be having an impact on Air Force purchasing power.
But Frye said he continues to watch overall sales volume increase for SSG as a whole. "We're getting a lot more bang for our customer's buck and with very little overhead," he said.
The enhanced sales figures also point to a continued movement away from IDIQ contracts and greater acceptance of BPAs and the General Services Administration schedule as the two preferred contracting vehicles for government agencies.
In fact, in a recent report on the trends in the government and Defense information technology industries, Boles Knop & Co. concluded that older IDIQs are "being shunned" in favor of BPAs and newer IDIQs that offer more opportunity for ordering services.
"The ease of use associated with a BPA, which is essentially a tailored subset of the GSA schedule and does not require a competition prior to award, outweighs that of an IDIQ vehicle," the report stated. "The other major advantage of a BPA is that it is not constrained time-wise the way an IDIQ vehicle can be," according to the report.
A Dell spokeswoman said the company's success could be attributed to its direct sales model, customized online store designed specifically for the Air Force, leasing options and enhanced global service options. "Purchasing direct from Dell helps the military save money," the spokeswoman said, adding that the Air Force leads the military in online purchases from Dell.