A Tampa, Fla., school district has signed an innovative but controversial agreement with Compaq Computer Corp. that will give the district steep discounts on computers. If the agreement proves successful, it could change the way the nation’s major computer manufacturers deal with school systems.

The deal, estimated to be worth more than $50 million, will make Compaq the sole provider of computers and technology services to Hillsborough County Public Schools for a five-year period. It also will allow low-income families to purchase affordable computers for their homes.

“To our knowledge, this is the first time any computer manufacturer has implemented an aggressive educator-parent purchase program, where a percentage of the purchase price will be rebated to the school district,” said Jim Weynand, Compaq’s vice president of government and education markets.

The exclusive agreement will provide the 11th-largest school district in the country with leverage to lower its total cost of ownership through volume discounts. Hillsborough County officials can choose from a variety of Compaq technologies that can be used to build end-to-end solutions—from desktop computers and notebooks to servers and a variety of IT services.

“One of the school board’s priorities is updated and integrated technology. Another is improved internal and external communication. This agreement will help us fulfill both priorities, while greatly enhancing student performance,” said Hillsborough Superintendent Earl Lennard.

According to Director of Technology Earl Whitlock, the contract means Hillsborough will have the lowest pricing on desktops or laptops of any K-12 school system.

“We have a guaranteed percentage rate,” he said. “[Compaq] has established a price point, and that will remain constant. We also have a parent, employee, and student purchase program.” Whitlock explained that Hillsborough will address the digital divide with a one-percent credit for all purchases.

“That money will go into a fund for lower-income students,” he said. The criteria for lower income is still being developed, but it most likely will be for students who qualify for free or reduced-price lunch.

“Through the employees’ and parents’ rebate program, the district can earn credits that can be redeemed for additional Compaq products, professional development, and other resources that will help them maximize their technology investment,” said Weynand.

In addition to volume discounts and the rebate program, Hillsborough County educators say they will benefit from Compaq’s strong commitment to education through lower total cost of ownership for technology. They say having one provider will make hardware easier to repair, maintain, and replace.

“In my estimation, the more we standardize the more we can maintain cost,” said Whitlock.

Compaq officials say the deal was structured to bring the most benefit to both the district and the company.

“This [deal] will help us go in and drive the internet culture in one large district—and it gives us a little bit more maneuverability,” said George Warren, director of K-12 marketing for Compaq. “We can go in and test some exciting and emerging products, and it gives us this long-term relationship so that we can see what works and what does not.”

But not all educators are convinced that a long-term deal like this one truly benefits schools or students.

“With the changes in technology happening so quickly, no school using taxpayer funds should sign anything long-term,” said Chris Mahoney, director of technology for Arkansas’ Lake Hamilton School District. “A long-term commitment could stifle progress and leave the schools stuck paying for higher-priced equipment.”

Rick Bauer, chief information officer for the Hill School in Pennsylvania, agreed that “five years in this business is an eternity.

“The last thing schools should do is lock themselves in to exclusive arrangement in the midst of an industry where there are many discontinuities, interruptive technologies that displace incumbents, and other economies of purchasing through state and federal purchasing groups,” said Bauer.

Mahoney and Bauer agreed they would not implement a similarly exclusive relationship in their own districts.

“I don’t know what incentives the company has to keep prices down and what leverage the schools give away by the exclusive arrangement,” said Bauer, “but not knowing those numbers, I would still be concerned.”

Hillsborough’s Whitlock said the district is not worried about the exclusivity of the contract.

“We are going more web-based in terms of the applications we receive,” he said. “For us, we are really gaining value. We plan to provide training and support via the web.” The district has inserted the ability to make changes as it goes into the deal with Compaq, he added.

“We don’t know what it will be like in five years, but we can adjust and change with it,” said Whitlock.

Long-term exclusive deals between school districts and companies may become more prevalent, according to Compaq’s Warren.

“We will absolutely see more of this type of thing in the future,” he said. “For the most part, people are looking for a leader to help them understand all the things that are out there. If it were easy, they’d go out and set it up themselves.”

Whitlock agreed. “I think other school districts will take a serious look at this in the future, and we are paving new territory,” he said. “In terms of how education manages technology enterprise, it’s important that all those things get linked together.”

Bauer remained skeptical. “As the old saying goes, ‘Trust everyone, but cut the cards.'”

Links:

Hillsborough County Public Schools
http://www.sdhc.k12.fl.us

Compaq in K-12 Education
http://www.compaq.com/education/k12