Battery recall affects thousands of federal users

CPSC Dell Battery Recall Notice

Key government users of Dell laptop computers will get top priority as the company begins to replace the 4.1 million batteries that it recalled under a voluntary agreement with the Consumer Product Safety Commission, but even those users will have to wait more than three weeks, according to a Dell executive.

Dave Ornelas, director of commercial operations at Dell, declined to estimate how much time it will take the company to replace all the batteries. Ornelas also has overall oversight for product quality at the company.

The priority doesn’t extend to all government users. Ornelas said those with a clear reason to move closer to the head of the line are agencies engaged in national security, such as the Defense Department, other federal departments, and state and local health and emergency departments.

Ornelas is not hopeful about a fast turnaround for the battery replacement program. Travis Jacobsen, a spokesman for EDS, which holds the Navy Marine Corps Intranet (NMCI) contract, said users could receive replacement batteries within three to four weeks, but Ornelas called that estimate “an unrealistic objective.”

One of the problems Dell faces is that some of the replacement batteries are no longer produced, Ornelas said. The recall affects several Dell laptop models sold between April 2004 and July 2006. Dell’s suppliers are working 24 hours a day to meet the demand and build their inventory, Ornelas said.

Dell declined to provide the total number of laptops it sold to the federal government that are subject to the battery recall, but the company has contracts with the Homeland Security, Interior and Labor departments. It also holds blanket purchase agreements with the Agriculture and Energy departments and has General Services Administration schedule contracts.

Dell is a top company on the GSA Schedule 70 contract, charting $1.6 billion in sales through that contract alone in fiscal 2003 and $1.5 billion in fiscal 2004, according to an analysis by Eagle Eye Publishers.

Other departments, such as the Department of Veterans Affairs, purchased Dell laptops through contracts with resellers. The VA buys the computers through Apptis under its Procurement of Computer Hardware and Software-2 contract. The VA, like other federal departments, is scrambling to determine its exposure to the Dell recall.

State and local agencies are also likely to be hit hard by the recall. Dell sold $2.5 billion worth of computer hardware and software to the Western States Contracting Alliance from 2004 through the first quarter of 2006.

The alliance buys computers on behalf of government users in Alaska, Arizona, California, Colorado, Nevada, New Mexico, Oregon, Utah, Washington and Wisconsin.

Although aggregate figures include desktop and laptop PCs and servers, the number of laptops sold to those states could be considerable. Desktop PCs outsold laptops by 57 percent to 43 percent in 2004 and then tipped to a 50-50 ratio in 2005, according to industry research. Initial estimates of laptops with bad batteries in the Army and Navy suggest the number of federal users affected by the recall will be substantial when department and agency information technology managers complete their inventories.

GSA said about half of its 7,000 Dell laptops are affected by the recall. The agency will deal with a possible shortage of replacement batteries by swapping batteries among laptops to provide a safe battery to those requiring one until replacements arrive, said GSA spokeswoman Diane Merriett.

EDS said it has identified 45,000 NMCI users who will need new batteries, and the Army Program Executive Office for Enterprise Information Systems identified 150,000 laptops it provided end users. Added together, the 195,000 computers with bad batteries that EDS and PEO-EIS initially identified are 5.2 percent of the 2.7 million batteries Dell will recall in the United States. The remaining 1.4 million subject to recall were sold in other countries.

Dell has told customers to use its Web site to determine whether or not they have a bad battery, and EDS initially told its NMCI customers to do the same. But late last week, a Navy spokeswoman said the NMCI program office is working closely with EDS to locate and notify all its affected users in an effort to speed the process.

David Hubler and Matthew Weigelt contributed to this article.