IntelliSys, GTSI start PC-3 battle

The two companies that hold Army PC-3 contracts have kicked off an old-fashioned sales war, racing to open their doors for business and battling on prices.

The competition between IntelliSys Technology Corp. and Government Technology Services Inc. should result in "an excellent deal for the Army; the prices are unbelievable," according to Linda Cook, the product leader for the contract at the Army Small Computer Program, Fort Monmouth, N.J.

IntelliSys, staffed by seasoned industry sales executives from BTG Inc., fired the first round in the sales war last week when it posted prices on the Army SCP World Wide Web page (pmscp.monmouth.army.mil) and said it planned to open its contract for ordering on April 28. Cook said this gave IntelliSys a jump because the company did not have an obligation to start accepting orders until May 13.

But GTSI did not let IntelliSys steal much of a lead, according to Joel Lipkin, GTSI's vice president of business development. Lipkin said GTSI would have its prices and offerings posted over the weekend, ready for customers in the Army and other federal agencies when they reported to work today.

IntelliSys prices (see the company's PC-3 product list, above) for high-powered Compaq Computer Corp. 350 MHz and 450 MHz Pentium II PCs represent a "threefold increase" in technology without much change in price from previous Army offerings, according to Eben Townes, senior vice president of Acquisition Solutions Inc.

While declining to disclose GTSI's complete pricing plans until this week, Lipkin promised that the company will offer PCs, presumably from Hewlett-Packard Co., the company's supplier on the PC-2 contract, priced "significantly" below PC-2 systems.

"We're going to be very competitive with [IntelliSys]," Lipkin said, "and in some cases starting below them."

For example, Lipkin said, GTSI plans to sell Microsoft Corp.'s Office Professional for use on PCs running the Windows NT operating system for $241, compared with $401 charged for the same software package on the IntelliSys PC-3 contract.

GTSI also plans to offer "close-out specials" on PC-2, which expires May 12, Lipkin said. The company will announce details of its specials at the Army SCP's semi-annual conference, which kicks off May 4 in Norfolk, Va.

But while both vendors will offer some good deals on PC-3, customers will have to shop carefully, Lipkin cautioned.

Compared with previous Army PC contracts, which were composed of easy-to-understand product bundles, PC-3 buyers will have to "look closely" at what a particular configuration will cost, he said.

For example, IntelliSys' low-end 350 MHz PC with a 15-inch monitor, a CD-ROM drive and a 4.3G hard drive costs $700, which is a real deal. But users wanting to order a hard drive upgrade to increase capacity from 4.3G to 12.7G will pay $425 for the new hard drive alone.

Alan Bechara, vice president of Comark Federal Systems, which was a losing bidder on the PC-3 contract, called IntelliSys' PC-3 pricing a "great deal," but he said the hard drive upgrade "is 80 percent of the base price of the PC."

IntelliSys officials did not return phone calls from FCW requesting comments on the company's pricing and bundling strategy.

But Acquisition Solutions' Townes said the high price for the hard drive is one way IntelliSys can "get well" on its otherwise low pricing.