USPS preps $1 billion deal

The U.S. Postal Service is getting ready to award a $1 billion contract to a technology vendor able to supply office computers and related items to postal centers across the country.

The Postal Service said it wants a long-term supplier for desktop and notebook computers, peripherals such as printers, disk and tape storage devices and a variety of software.

The terms of the contract are challenging. In a published notice, the Postal Service said it is requiring the contract winner to offer most-favored-customer pricing and the ability to handle orders for 500 or more systems or a single order valued at $1 million or more.

The contract winner also will have to provide support services, including maintenance, repair and replacement of the hardware it sells. In addition, the Postal Service may require the winning vendor to perform maintenance on equipment the Postal Service already owns, which the agency identified as mainly Compaq Computer Corp. computers. And the Postal Service wants "ongoing technology refresh capability" to keep its computing capabilities up to date.

The vendor must be able to supply Compaq, Dell Computer Corp., Hewlett-Packard Co., IBM Corp. or Toshiba America Information Systems Inc. computers, Postal Service officials said.

A five-year contract with the possibility of additional option years is to be awarded by Oct. 1.

The billion-dollar deal is the second-generation Acquisition of Desktop Extended Processing Technology contract. The original contract dates to 1994, when the Postal Service hired Digital Equipment Corp. to supply it with computers and related equipment for $200 million. That contract was extended repeatedly and eventually grew to more than $1 billion, according to Postal Service contracting officials.