GTSI, Intellisys win $300 million Army pact

Government Technology Services Inc. and Intellisys Technology Corp. won the battle for the Army's $300 million Personal Computer-3 (PC-3) contract by offering high-end desktop machines from Hewlett-Packard Corp. and Compaq Computer Corp.

Steve Baldwin, president of Intellisys - a Fairfax, Va.-based vendor staffed primarily with seasoned federal computer industry veterans from BTG Inc. - said his company initially intends to offer Compaq Pentium II PCs with clock speeds of 350 and 450 MHz. Asked if Intellisys plans to offer computers equipped with the recently introduced Intel Corp. Pentium III chip, Baldwin said, "I would expect that as new technology comes out, Army customers will have an interest in that technology."

Intellisys also took the radical step of offering Lotus Development Corp.'s SmartSuite office automation software and not Microsoft Corp.'s Office software, which holds the dominant market share among Army users.

The Army, following a strategy it has used in past PC deals, structured the procurement to allow buyers to choose from low-end and high-end desktops, with the largest evaluated quantities at the low end. Intellisys bid and won with a bargain-basement price for its low-end offering: $700 for a Compaq PC with a 350 MHz chip, a CD-ROM drive, a network card, a 4G hard drive and a 15-inch monitor.

Joel Lipkin, vice president of business development at GTSI, said his company also planned to offer HP Pentium IIs when contract ordering begins in May, but he anticipates a quick shift to Pentium IIIs. "There is no question that based on our history of doing quick tech refreshment that [we will] take [PC-3] to Pentium IIIs quickly."

Lipkin and Baldwin agreed that service support for overseas Army units in South Korea and Germany is key to performance on any Army PC contract, and both said they have lined up powerhouse worldwide support contractors.

Baldwin believes the total volume of sales on the PC-3 contract should outpace sales on the PC-2 contract, held by GTSI and Vanstar Government Systems Inc.

"There are some distinct differences in PC-3," he said. "This is a contract vehicle open to all of the Defense Department, not just the Army."

Eben Townes, a federal computer industry analyst and senior vice president of Acquisition Solutions Inc., believes Army PC-3 vendors will have a tough time competing in the hurly-burly of the newly deregulated federal PC market, where agencies such as the National Institutes of Health fight for business for their contract vehicles across the government, including DOD. PC-3 vendors "have a hunting license" to go after the DOD market, Townes said. However, "they are going to have to convince customers they are the best solution in what has become a commercial market like any other," he said.

Linda Cook, product team leader at the Army Small Computer Program, Fort Monmouth, N.J., said she could not address the specifics of the PC-3 bids until the protest period expires March 9. But Cook did say, "I'm real happy with the awards, and I look forward to working with two good vendors."

Losing bidders on the Army PC-3 contract, based on industry estimates, include Dell Computer Corp., bidding direct; Dunn/IDP Computer Corp., bidding Acer America Corp. PCs; and Comark Federal Systems Inc. and Vanstar Corp., both of which offered PCs from IBM Corp.