Compaq lands lucrative deal with Postal Service

The U.S. Postal Service has awarded its Acquisition of Desktop Extended Processing Technology (ADEPT2) contract, valued at up to $2 billion, to Compaq Computer Corp. The contract requires buys of all end-to-end industry-standard Microsoft Corp. Windows- and Intel Corp.-based information technology solutions. The base five-year contact is valued at $1 billion, with options that could double both the length of years and dollar amount. The deal, announced Oct. 11, includes services as well as Compaq and third-party products across the Postal Service's distributed computing environment.

"On ADEPT1, we did more than $1.2 billion in products and services, and this is for up to $2 billion," said Peter Blackmore, executive vice president of sales and services at Compaq.

In addition to supplying desktops, servers and other equipment, Compaq must also provide support services, including maintenance, repair and replacement of the hardware it sells. Blackmore said those capabilities helped Compaq secure the award. "Through our oral and written proposals, it was centered around services and program management capability as much as the proj.ect itself," Blackmore said.

USPS can buy the "very latest Intel-based Windows technology," including Compaq's revamped Evo product lines of notebooks, workstations and thin clients, as well as its latest industry-standard server technology, he said.

ADEPT2 is a re-compete of a contract awarded in 1994 to Digital Equipment Corp., which Compaq later acquired. Compaq delivered more than $1.2 billion in products and services — including more than 32,000 servers, 180,000 desktop computers and 50,000 notebook computers — on ADEPT1.

That contract was first valued at $200 million, but was extended repeatedly and eventually topped $1 billion, according to USPS contracting officials.

Alan Promisel, a PC analyst at IDC, said ADEPT2 will obviously provide a huge financial boost to Compaq, but will also help it in other ways. "It's an incredible injection of cash into a com.pany that is really bleeding right now and the visibility of the Postal Service brand is something they can use to show other business customers," Promisel said, adding that stockholders will be pleased, given the uncertainty that has followed Compaq since its proposed merger with Hewlett-Packard Co.