Commerce Department's $18.7M laptop purchase from Dell shows strong competition and fair pricing

Contract Overview

Contract Amount: $18,695,576 ($18.7M)

Contractor: Dell Computer Corporation

Awarding Agency: Department of Commerce

Start Date: 2004-04-30

End Date: 2009-09-30

Contract Duration: 1,979 days

Daily Burn Rate: $9.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PURCHASE OF LAPTOP COMPUTERS

Place of Performance

Location: ROUND ROCK, WILLIAMSON County, TEXAS, 78682

State: Texas Government Spending

Plain-Language Summary

Department of Commerce obligated $18.7 million to DELL COMPUTER CORPORATION for work described as: PURCHASE OF LAPTOP COMPUTERS Key points: 1. Value for money appears strong given the firm fixed-price contract and competitive bidding. 2. Competition dynamics were favorable with 7 bidders vying for the contract. 3. Risk indicators are low due to the mature technology and established vendor. 4. Performance context is a standard hardware refresh cycle for the Census Bureau. 5. Sector positioning is within the IT hardware procurement landscape.

Value Assessment

Rating: good

The contract's firm fixed-price structure suggests a predictable cost outcome. Benchmarking against similar large-scale laptop procurements indicates that the per-unit cost, while not explicitly detailed here, likely falls within a competitive range given the volume and duration. The total award amount of $18.7 million for over 1900 days of supply suggests a reasonable annual expenditure for IT hardware.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 7 bidders suggests a healthy level of market interest and competition for this requirement. This broad competition is generally expected to drive down prices and ensure the government receives favorable terms.

Taxpayer Impact: The robust competition for this laptop purchase means taxpayers benefited from a more efficient allocation of funds, likely securing better pricing than would have been possible with limited competition.

Public Impact

The U.S. Census Bureau benefits from updated computing hardware to support its data collection and analysis operations. Federal employees within the Census Bureau will utilize these laptops for daily tasks. The geographic impact is primarily within the Census Bureau's operational centers, likely distributed across the U.S. Workforce implications include ensuring Census Bureau staff have reliable tools to perform their duties effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for technology obsolescence over the 5-year contract duration.
Dependence on a single vendor, Dell, for hardware supply and potential support.
Ensuring consistent performance and reliability of laptops across a large user base.

Positive Signals

Firm fixed-price contract limits cost overruns.
Full and open competition suggests competitive pricing.
Established vendor provides a degree of reliability and support.

Sector Analysis

This contract falls within the Information Technology sector, specifically IT hardware procurement. The market for enterprise-level laptops is mature and highly competitive, with several major manufacturers vying for government contracts. Spending benchmarks for similar large-scale IT hardware procurements by federal agencies often range in the tens of millions of dollars, making this award size typical for equipping a significant portion of an agency's workforce.

Small Business Impact

While this contract was awarded to Dell Computer Corporation, there is no explicit indication of a small business set-aside. However, large IT hardware contracts often involve significant subcontracting opportunities for small businesses in areas such as software installation, support services, or component supply. The prime contractor's subcontracting plan would detail these opportunities.

Oversight & Accountability

The contract was awarded under a firm fixed-price structure, which inherently provides cost control. Oversight would typically be managed by the U.S. Census Bureau's contracting officers and program managers. Transparency is facilitated by public contract databases, and any specific concerns would be subject to review by the agency's Inspector General.

Related Government Programs

General Services Administration (GSA) Schedule IT procurements
Department of Defense (DoD) IT hardware purchases
Other agency laptop and desktop computer acquisitions

Risk Flags

Potential for technology obsolescence
Long contract duration may exceed typical hardware refresh cycles

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $18.7 million to DELL COMPUTER CORPORATION. PURCHASE OF LAPTOP COMPUTERS

Who is the contractor on this award?

The obligated recipient is DELL COMPUTER CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Commerce (U.S. Census Bureau).

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2004-04-30. End: 2009-09-30.

What was the specific model of laptop purchased and its technical specifications?

The provided data does not specify the exact laptop model or its technical specifications. However, given the contract award date (2004) and the duration (ending 2009), the laptops would likely represent standard business-class machines of that era. Typical specifications would include processors like Intel Core Duo or similar, RAM in the gigabyte range, and hard drives measured in tens or hundreds of gigabytes. The U.S. Census Bureau would have detailed these requirements in the solicitation documents to ensure the hardware met their operational needs for data processing and analysis.

How does the per-unit cost compare to market rates at the time of award?

The data does not provide a direct per-unit cost. However, with 7 bidders competing under full and open competition for a firm fixed-price contract, it is reasonable to infer that the per-unit pricing was competitive. To perform a precise benchmark, one would need to divide the total award amount ($18,695,576.44) by the number of units purchased. Without the unit count, a direct comparison is impossible. However, historical data from similar government procurements of business laptops in the mid-2000s suggests that prices could range from $800 to $1500 per unit, depending on configuration and volume discounts.

What is the track record of Dell Computer Corporation in fulfilling large federal IT contracts?

Dell Computer Corporation has a long and extensive track record of fulfilling large federal IT contracts. As a major IT hardware vendor, Dell has consistently been a significant supplier to government agencies for laptops, desktops, servers, and related equipment. They have established procurement vehicles, such as GSA Schedules, and have demonstrated the capacity to deliver large volumes of hardware on time and within budget. Their experience in the public sector includes navigating complex procurement regulations and meeting stringent security and performance requirements.

What were the primary performance metrics or service level agreements (SLAs) associated with this contract?

The provided data does not detail specific performance metrics or Service Level Agreements (SLAs). However, for a contract of this nature involving the purchase of laptops, typical performance expectations would include timely delivery of all specified units, adherence to configuration requirements, and a warranty period covering defects in materials and workmanship. SLAs might also cover response times for hardware support or replacement, though these are often handled through separate maintenance contracts. The firm fixed-price nature suggests that meeting delivery schedules and product specifications were key performance indicators.

How has the Census Bureau's spending on IT hardware evolved since this contract?

The provided data only covers a single contract from 2004-2009. To assess the evolution of the Census Bureau's IT hardware spending, a broader analysis of their procurement history over subsequent years would be necessary. Factors influencing this evolution include technological advancements (e.g., shift to solid-state drives, increased processing power, cloud integration), changes in data collection methodologies (e.g., increased reliance on mobile devices), and overall budget appropriations. It's likely that spending patterns have shifted towards more mobile computing solutions and potentially cloud-based infrastructure, alongside continued needs for robust desktop and laptop hardware.

Industry Classification

NAICS: Manufacturing › Hardware Manufacturing › Hardware Manufacturing

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Dell Technologies Inc.

Address: ONE DELL WAY, ROUND ROCK, TX, 78682

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,695,576

Exercised Options: $18,695,576

Current Obligation: $18,695,576

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline