Dell awarded $1.02M contract for 240 laptops to the Department of the Army

Contract Overview

Contract Amount: $10,182,823 ($10.2M)

Contractor: Dell Computer Corporation

Awarding Agency: Department of Defense

Start Date: 2007-03-28

End Date: 2008-05-25

Contract Duration: 424 days

Daily Burn Rate: $24.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: LATITUDE D620, INTEL CORE 2 DUO T5600,

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78664

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $10.2 million to DELL COMPUTER CORPORATION for work described as: LATITUDE D620, INTEL CORE 2 DUO T5600, Key points: 1. Contract value appears reasonable for the quantity and type of equipment. 2. Full and open competition suggests a competitive pricing environment. 3. Fixed-price contract limits cost overrun risks for the government. 4. Contract duration is relatively short, indicating a focused procurement. 5. Procurement falls within the IT hardware sector, a common government need. 6. The specific model (Latitude D620) is an older generation, potentially impacting performance expectations.

Value Assessment

Rating: good

The contract value of $1,018,282 for 240 laptops, averaging approximately $4,242 per unit, seems high for standard business laptops, even considering potential bulk discounts and support. However, without specific configuration details or performance requirements, a direct comparison is difficult. If these are specialized or ruggedized versions, the price might be more justifiable. Compared to typical commercial pricing for similar-era Dell Latitude laptops, this appears to be at the higher end, suggesting that the 'full and open competition' may not have driven prices to the absolute lowest possible point, or that specific service/support components are included.

Cost Per Unit: Approximately $4,242 per unit. This is significantly above typical commercial pricing for laptops of this era, even with bulk discounts. Market rates for comparable business-class laptops in 2007 would likely have been in the $1,000-$2,000 range, depending on configuration and volume.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically leads to a more robust selection of vendors and potentially better pricing due to market forces. The presence of only one award does not necessarily imply limited competition during the bidding phase; it simply means Dell was the selected vendor among potentially multiple bidders.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer competitive pricing, potentially leading to cost savings for the government.

Public Impact

The Department of the Army benefits from the acquisition of necessary IT equipment. End-users within the Army will receive laptops to support their operational duties. The geographic impact is primarily within Texas, where the contract was awarded. Workforce implications include the provision of tools for military personnel to perform their tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpayment given the high per-unit cost compared to market benchmarks.
Risk of acquiring outdated technology (Latitude D620) which may have limited lifespan and support.
Lack of detailed justification for the specific model chosen and its suitability for current Army needs.

Positive Signals

Awarded through full and open competition, suggesting a fair process.
Firm Fixed Price contract type mitigates risk of cost escalation for the government.
Contract awarded to a well-established vendor (Dell), implying reliability in delivery.

Sector Analysis

This contract falls within the Information Technology sector, specifically hardware procurement. The market for enterprise laptops is dominated by a few major manufacturers like Dell, HP, and Lenovo. Government spending on IT hardware is substantial, with agencies frequently procuring laptops, desktops, and servers. Benchmarks for similar large-scale laptop procurements vary widely based on specifications, but the per-unit cost here appears high relative to commercial equivalents of the same vintage.

Small Business Impact

The contract was not specifically set aside for small businesses, and the awardee, Dell Computer Corporation, is a large business. There is no indication of subcontracting requirements for small businesses within the provided data. This procurement does not appear to directly benefit the small business ecosystem, though Dell may utilize small business suppliers in its broader supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and procurement oversight bodies. As a firm-fixed-price contract, the primary accountability measure is the delivery of the specified goods. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Hardware Procurement
Army Laptop Acquisition Programs
General Services Administration (GSA) Schedule Contracts (potential alternative procurement vehicle)
Information Technology Services and Equipment

Risk Flags

Potential for outdated technology acquisition.
High per-unit cost compared to market benchmarks.
Mismatched NAICS code classification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.2 million to DELL COMPUTER CORPORATION. LATITUDE D620, INTEL CORE 2 DUO T5600,

Who is the contractor on this award?

The obligated recipient is DELL COMPUTER CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $10.2 million.

What is the period of performance?

Start: 2007-03-28. End: 2008-05-25.

What specific configuration and intended use justified the high per-unit cost of the Dell Latitude D620 laptops?

The provided data does not include specific configuration details beyond the model name (LATITUDE D620, INTEL CORE 2 DUO T5600) and the fact that it's a laptop. The high per-unit cost of approximately $4,242 suggests that either the laptops included significant upgrades, specialized software, extended warranties, on-site support services, or were procured during a period of high demand or limited supply. Without further documentation detailing the exact specifications, included services, and the Army's specific requirements for these machines (e.g., ruggedization, specific security features, advanced processing power beyond the T5600), it is difficult to definitively justify the cost relative to standard commercial offerings of the same era. It is possible the 'full and open competition' did not yield bids that met the Army's precise, potentially specialized, needs at a lower price point.

How does the Intel Core 2 Duo T5600 processor in these laptops compare to modern processing capabilities?

The Intel Core 2 Duo T5600 processor, released around 2007, represents technology from over 15 years ago. It is a dual-core processor with a clock speed of 1.86 GHz and 2MB of L2 cache. Modern processors, even in entry-level laptops, typically feature multiple cores (quad-core, hexa-core, octa-core, and more), significantly higher clock speeds (often exceeding 3.0 GHz), larger cache sizes, and advanced architectures (like Intel's Core i series or AMD's Ryzen series) that offer vastly superior performance, power efficiency, and multitasking capabilities. The Core 2 Duo T5600 would be considered extremely slow and inadequate for running modern operating systems and demanding applications efficiently. Its inclusion indicates these laptops were likely procured for basic tasks or specific legacy systems that do not require high performance.

What is the typical lifespan and support availability for a Dell Latitude D620 model purchased in 2007?

Laptops from 2007, like the Dell Latitude D620, typically had an expected operational lifespan of 3-5 years for standard business use, though this can vary based on usage intensity and maintenance. By now, these machines are well past their prime. Manufacturer support, including driver updates, BIOS patches, and hardware repair services, would have ended many years ago. Dell's extended warranty and support programs for this model would have expired long ago. Finding replacement parts for hardware failures would be challenging and likely rely on the secondary market. Furthermore, running modern operating systems and security software on such outdated hardware poses significant security risks and performance limitations, making them unsuitable for most current government or business operations.

What does the 'AW: DO' designation signify in the contract details?

The 'AW: DO' designation in the contract details likely refers to the 'Award Type' or 'Action Type' and indicates 'Delivery Order'. In federal contracting, a Delivery Order is a task order issued under a larger indefinite-delivery, indefinite-quantity (IDIQ) contract or a basic ordering agreement (BOA). This means that while Dell may have had a pre-existing contract vehicle (perhaps a GSA Schedule or a specific IDIQ for IT equipment) with the government, this specific 'DO' represents the actual order placed for the 240 laptops. The 'DO' signifies the execution of a specific purchase against a broader agreement, detailing the quantity, price, and delivery timeline for this particular set of goods.

How does the 'Wired Telecommunications Carriers' NAICS code (517110) relate to the procurement of laptops?

The NAICS code 517110, 'Wired Telecommunications Carriers,' appears to be mismatched with the procurement of laptops. This code typically covers establishments primarily engaged in operating and/or providing access to telecommunications infrastructure, such as telephone networks, cable networks, and internet service providers. Laptops themselves fall under computer hardware manufacturing or wholesale trade (e.g., NAICS 334111 for Electronic Computer Manufacturing or 423430 for Computer and Computer Peripheral Equipment and Software Merchant Wholesalers). The procurement of laptops should ideally be classified under an IT hardware-related NAICS code. This discrepancy might indicate an administrative error in data entry or a misunderstanding of NAICS code application within the awarding agency's system. It does not directly reflect the nature of the goods purchased but rather an issue with the classification system used.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: DABL0103R0001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE DELL WAY, ROUND ROCK, TX, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,182,823

Exercised Options: $10,182,823

Current Obligation: $10,182,823

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DABL0103D1008

IDV Type: IDC

Timeline