Veterans Affairs quietly awards Dell $476 million contract for 600,000 personal computers

The Veterans Affairs Department chose an obscure way to announce a $476.6 million contract with Dell Inc. for 600,000 personal computers: The department quietly posted a notice on the FedBizOpps website at the end of April.

Dell, a company that generally announces its wins, has not issued a press release on the award in the 10 business days since VA inked the deal on April 26.

The award is a follow-on to a contract VA signed with Dell in August 2007 to lease 249,000 PCs over three years at a cost of $248 million. The department's inspector general sharply criticized the 2007 deal in a June 4, 2008, report that said the contract, "as structured, does not provide the VA with an effective means to ensure competitive, reasonable prices are obtained in the later years of the leases."

A spokeswoman for the House Veterans Affairs Committee said the department had not informed the committee of the contract award to Dell.

The committee is scheduled to hold a hearing Wednesday focused on VA's information technology plans and the spokeswoman said that while the committee does not plan to explore the Dell contract directly, "We do plan to pursue questions related to management, procurement and planning of [Office of Information and Technology] projects."

Regarding procurements, she said, "As always, our concern is that an appropriate and unbiased cost analysis be conducted and that the best value is selected from a number of alternatives."

The latest Dell PC contract runs for eight years. In its statement of work for the acquisition released in October 2010, VA said it planned to order an estimated 70,000 workstations in the first year of the contract.

The department said it could require delivery of up to 200,000 workstations in any single year over a four year period not to exceed the 600,000 maximum. The final four years of the contract includes service and maintenance.

VA plans to buy two models of personal computers -- a standard desktop model and an advanced PC, each equipped with a monitor; the contract also calls for installation, which VA said requires careful logistical planning due to the complex nature of workspaces in department facilities.

Neither VA nor Dell detailed the types of PCs that will be supplied under the new contract, but based on raw numbers, the 2011 contract looks like it offers the department a better deal than the 2007 contract. That $248 million lease contract, which expired in August 2010, called for Dell to provide VA with 300,000 computers, which worked out to $826 per computer, including hardware and services.

The April 2011 contract for 600,000 computers at a ceiling price of $476.6 million works out to $794 per computer, including services. Dell is currently running an online sale on a Vostro model mini-tower desktop PC with a 20-inch monitor, an Intel Core i3 2100 processor and 2 gigabytes of memory for $639, down $277 from its regular price of $916.

VA has another PC deal in the works, outlined in a request for information released in March for a planned Commodity Enterprise Contract to acquire desktop and laptop PCs, routers and storage. Rom Mascetti, deputy assistant secretary for information technology resource management, said last month that the commodity contract would be used as a follow-on to the desktop contract when it expires.

Industry sources speculated that Hewlett-Packard bid on the desktop contract awarded to Dell, but an HP spokesman did not return calls or emails seeking comment.

Neither Dell nor VA responded to queries from Nextgov on the $476.6 million contract.