State Dept. Cancels $16.5M Kindle Contract

itwbennett writes "The U.S. Department of State will be canceling a $16.5 million Amazon order that included 2,500 Kindle Touch e-readers, 50 pieces of content, and 'required provision of a secure, centrally managed content distribution and management platform.' The department said that it will be re-examining its requirements for the program. Those requirements had called for a single-function device with text-to-speech, a 'battery life of no less than about 8 hours of continuous reading or approximately 7.5 hours of video playback,' and free Wi-Fi. The Kindle was the only project that met that original set of requirements."

Comments

sucks to be Amazon

[TheRealQuestor]

wonder who they ticked off this time

Re:sucks to be Amazon

[Cute Fuzzy Bunny]

wonder who they ticked off this time

Eh, someone up the food chain realized that they weren't buying ipads, and those are what the cool kids have. Cue the story about them opening a contract with apple to do the same exact thing, only for double or triple the cost.

They're doing that here in California. Our state budget left the rails and took out every major city, and we're letting go of teachers left and right. But we found money to buy 5 ipads for every classroom from one of those buckets where the money can only be spent one way. No integration, no IT strategy...just 5 paperweights with a quiz on them about a book, and you have to transcribe the results from the ipad to a piece of paper when you're done, as there is no rollup.

I just want to know what person sits in what office in the state organization that agreeably says "Oh, you want to donate money to our schools? Yeah, well those ipads would be pretty much useless...feel like funding something critical thats being cut or how about we buy cheaper tablets, get 20 per class instead of 5, and get someone to do a nice integration job with our curriculum?

We missed a prime opportunity last year when HP (a california company) decided to get out of the touchpad business and sold tens of thousands of them for below cost. Someone from the state should have gotten them to donate them, make more so every kid could have one, and build the software and support infrastructure with that. Replace all textbooks and teaching materials with the pad. Give HP tax credits so its worth it for them to take it on. Hell, it took the NFL no time at all to switch from playbooks and lots of pieces of paper to a tablet solution. If they can do it, I'm pretty sure HP and the state of california could have done it.

Spec'd the Kindle

[tomhath]

So the requirements were for a Kindle and only a Kindle? Nice try by someone ready to retire and move to private industry.

Re:Spec'd the Kindle

[MonsterTrimble]

Actually, I see this all the time in the public sector and have done it on countless occasions myself.

The reason Amazon is the only one which meets the specs is because the specs were chosen so only Amazon could meet them. It's how you can exclude a vendor (or vendors) you have no desire of even giving the opportunity to win the quote. This can be because of past history with the company's sales team, poor delivery, poor service, poor quality, and so on. While in a strict lower cost item sense it's bad, it is often not the case when you consider all the other factors. Extra time spent caused by poor quality or poor delivery can often cost far more than the additional money spent on a product which has very good quality and is delivered on time.

Re:Spec'd the Kindle

[jellomizer]

That is common. We go by the joke we called a fare bidding process. Everyone denies it but this is how it works.
The Government finds a vendor they want to use. Once they find the vendor they like, they often get the resumes of the people who will be working, or the product specifications, then they use that to make their bid. Because the Bid has a detail on what they want, it is hard for a competitor to compete with the bid, because every product and service is a little different. Even though they may be able to help solve the same problems.

If you look at lot of these bids, you see things like
Web Site Development
Required Sills:
HTML 10+ years
JavaScript 8+ years
Photoshop 6+ years
ASP.NET 9+ years
FORTRAN 77 4+ years
C++ 12+ years
MUMPS 3+ years

You see bids like that you know they have already picked someone they want to use. The Job doesn't even require FORTRAN or MUMPS or C++ however they may have some in house applications that still run these systems so they add it in their bids, but they have already picked who they want and they know that they have those skills, and they also have similar systems on their side (To show that they have a need for such technology).

They did all the paper work correctly and there isn't any sign of corruption. However they found a way to bypass the fair and competitive bidding process.

Re:Spec'd the Kindle

[deKernel]

Guessing you didn't read the article. No device other than the Kindle met the requirements AND the requrements were quite sane.

Re:Spec'd the Kindle

[zippthorne]

Oddly, The Kindle doesn't meet the requirements, either. The Kindle and Kindle Touch don't do video, and the Kindle Fire doesn't do 3G...

Also, the requirements are not specific to Amazon - B&N has devices which match the requirements as fully as Amazon does, including the 3G download requirement. If they wanted to force Amazon to be the only supplier, they would've had to require that the device allow web browsing over the 3G link.

Re:Spec'd the Kindle

[tomhath]

The goal is lock-in. First purchase is a balancing act, small enough to get through without too much attention, but big enough that any follow-on has to be for the same equipment. Typically the follow-ons are worth several times the initial contract, and are negotiated separately.

That can't be...

[kenh]

A federal procurement contract with a set of requirements that can only be satisfied by one vendor?

Unheard of!

One one thousandth of a penny wise, pound foolish.

[Impy the Impiuos Imp]

> canceling a $16.5 million Amazon order

Yey! The government just reduced its spending by .00037% this year!

It still continues to borrow 9/10ths of a Nimitz-class aircraft carrier every day.

Re:Kindle touch video?

[Shoten]

It said "or," as in "8 hours of continuous reading or approximately 7.5 hours of video playback."

I suspect that the challenge here had to do with procurement rules. It's against the rules to design an RFP or RFQ in such a way that only one vendor can fulfill the requirements. It sometimes happens that the requirements are immutable and the RFP ends up being built that way, but that has to be proven, and I find it difficult to imagine that the Kindle is such a totally mind-blowing device that a Nook, for example, couldn't actually meet their needs as well. (I own a Kindle, and love it, mind you...it's just that the Kindle hasn't been the unapproachable paramount that the iPad is in the tablet market, in my opinion.) So I think someone had a predilection for Kindles, wrote the spec that way, and is now getting bitten by that no-no.

Reconsidered

[guttentag]

The state department realized it was going to cost a lot more than originally expected since they'll have to pay sales tax by the time the shipment is ready.

Re:Let's cheer for No-bid contracts

[sizzzzlerz]

Yeah. I'll be battle-hardened to withstand 20G shock, survive submersion in seawater to 500 feet depth, be rad-hard, and have full-up mil spec documentation. It's yours for $127,343.36 per copy. Do you need the HumVee mounting kit as well?

$6600 per Kindle!

[rollingcalf]

$16.5 million divided by 2500 = $6600.

Even though that includes some content and services on top of the Kindle itself, I don't see how it reaches $6600 per unit without most of it being waste and kickbacks.

Re:$6600 per Kindle!

[aardvarkjoe]

$16.5 million divided by 2500 = $6600.

Even though that includes some content and services on top of the Kindle itself, I don't see how it reaches $6600 per unit without most of it being waste and kickbacks.

Maybe they forgot to select the "free super saver shipping" option.

Re:$6600 per Kindle!

[PPH]

Yeah. You'd think that this was a contract to procure hammers or toilet seats or something like that.

I guess nobody here read the procurement doc

[Anonymous Coward]

Go read it.. SAQMMA12R0272 at fedbizopps.gov some highlights:
"The US Department of State intends to award an indefinite-delivery indefinite-quantity commercial items contract on or about June 19, 2012, on a sole source basis to Amazon Digital Services, Inc. of Seattle WA for the commercial supplies and services described below. The anticipated value is $16,500,000 over the life of the contract, which shall be one base year plus 4 option years."

"The Contractor shall provide 3G services globally. The Contractor is responsible for all costs associated with 3G services globally (i.e., downloading content and access to the Internet Browser)." {Better make sure it works in Ulan Bator}
"The Contractor will supply content to the device delivered under this contract, but shall also support the delivery of content to the following other devices currently utilized by the Department of State: Apple iOS, Android, Amazon Kindle, RIM Blackberry, PC, and MAC"
"The Contractor shall provide a dedicated 24/7 help desk to support inquires from the Department of State and its partners in countries specified in Attachment A."
-------------------
it's not 16M for 2500 kindles.. it's for a package of services, secure distribution channels, etc., The "initial delivery" is for 2500 readers, with options for a lot more, within the 16M total. And a starting batch of 50 documents, which Amazon would have to convert. 1 initial year plus 4 option years, too.

They wanted a locked down platform which could NOT be used as a general purpose computer or have user installed software (knocking out the iPad, jailbroken or not)

Re:I guess nobody here read the procurement doc

[kcitren]

Also, the system is not tied to the Kindle. It needs to be able to push content to iPhones / iPads, Android devices, Blackberries, Windows and Apple PCs over a global 3g network. Hell, the global 3G network is going to cost more than 16M over the life of the contract. According to Amazons 3g coverage maps, they've got the North America, most of Europe covered (except for Belarus), India, Japan, Australia, and a few spots in South America, the Middle East, China, and SE asia.

Nothing sneaky here.

[Dcnjoe60]

Nothing sneaky here with Amazon being the only e-reader selected. From the actual article, the iPad was/is not classified as an e-reader, but is a tablet/computer and the bid was for e-readers. The nook is not mentioned, but the requirement for text to speech would have eliminated it at the time the specs were created. Most other ereaders at the time didn't support that, either.

Now some may want to arugue that it was intentional to only allow the kindle, but a much more likely scenario is that the device selected needs to accomodate people with visual impairment.

Nothing sneaky here with Amazon being the sole provider. On the otherhand, it if they end up buy 2,500 Windows Surface RT at twice the price, then, that should really be looked into. Because, like the iPad, it's not an ereader, either.