California flexes buying muscle

The California Department of General Services (DGS) has awarded seven statewide contracts worth about $116 million for computer equipment. The department plans to use higher purchasing volumes to get better prices and save millions of dollars.

The contracts apparently mark the first time the state has developed common configurations for hardware so it could wield its purchasing power. For example, the department estimates a 15 percent average price reduction on peripherals, and a more than 46 percent discount on printers. State officials predict that California could save $40 million in the next two years.

“We don’t need scores of different models and configurations of desktop computers,” Fred Aguiar, secretary of the State and Consumer Services Agency, which oversees DGS, said in a written statement. “By switching to a handful of basic, off-the-shelf computer models, we can buy in bulk and drive down prices.”

The contracts were awarded through a competitive, open bidding process and through the California Strategic Sourcing Initiative, which aims to improve the state’s procurement management system by analyzing goods and services purchased statewide and their market conditions to find the best value.

According to DGS, the competitive bidding process used a best value approach, meaning that 60 percent of bidders’ scores were based on price, while 40 percent were based on technical and administrative requirements such as service levels and customer references. The awards were based on price and those other factors.

Two contracts for desktop computers, worth about $53 million combined over the next two years, were given to Gateway and a team comprised of Hewlett-Packard, Western Blue and Insight Enterprises.

The contracts for notebook computers were awarded to IBM and Gateway for an estimated $22 million combined over two years.

The team of HP, Western Blue and Insight Enterprises won an $8 million contract for printers and a $25 million one for peripherals, while Gateway received a $9 million contract for monitors.

The HP team and Gateway agreed that they would subcontract at least 25 percent of the work to small businesses and 3 percent to business owned by service-disabled veterans.