The public-relations official from Dell clearly was not pleased. His company had only recently landed a multimillion-dollar, three-year contract to lease several thousand desktop computers to the Lake County Schools in Florida, and suddenly the news coverage was anything but uplifting, at least from Dell’s perspective.
“$3M Dell contract doesn’t compute,” read the snappy headline in the July 11 edition of the Orlando Sentinel, which went on to report that county school board members were “seething” over a claim that “the deal nearly stuck the district with 5,400 incompatible machines.” The article was published on the internet, and a summary and link to the Sentinel story appeared briefly as an “Around The Web” item at eSchool News Online.
There was a big problem with the article, according to Dean Kline, the Dell spokesman. He says it wasn’t accurate, fair, or balanced. Instead, he maintains, the Sentinel’s account was an outgrowth of some “mudslinging” by HP, which had just lost out to Dell after having been the school district’s primary computer vendor for the previous six years.
The newspaper quoted an HP district manager, Tony Cossio, as having told a school board meeting earlier that week that his company had not been allowed to submit a bid for computers with a less-expensive Windows operating system like one that Dell had priced, and that the school district’s contract had been awarded without sealed bids.
Assertions like those, however, while seemingly accurate as far as they go, may not adequately explain all the ins and outs of a competitive process such as the one that occurred in Lake County, and the statements may thus be misleading or subject to misinterpretation. That’s the opinion, in fact, of Lake County school officials, who are preparing for an audit of the process in the next few weeks as a result of a school board decision that preceded the Sentinel article.
According to the Sentinel, Cossio said the school district’s handling of the process amounted to “a very cute way of making sure one vendor was put in a more favorable light over another vendor.”
Ken Osman III, the district’s chief technology officer, has a contrary view. “The bottom line,” he says, “is that the [Sentinel] article gave the impression that we procured a bunch of computers on a lease that were not going to be usable on our network, and that is absolutely not true. And that we did so knowingly. And neither thing is true.”
Osman adds: “The computers are all usable on the network, they’re all ready to go, and they’re all duly licensed to do so. And we always had a plan to make them viable.”
Efforts this week to obtain direct comments about the situation from HP were unsuccessful.
For their part, school officials in Lake County expect the coming audit to show that they did nothing improper during the process that led to the contract with Dell. Osman says he’s “very confident” about that.
Meanwhile, a continuing controversy over how the matter has been handled in Lake County poses questions for school authorities in many other jurisdictions, as well, and at a time when technology purchases are becoming an increasingly important–and expensive–part of the education scene. For example, to what extent are school districts well advised, even when not required by law or government regulation, to base competitive contract decisions on sealed bids? And what procedures are necessary to ensure that the process is verifiably fair to all parties?
In Lake County, Robb Lewis, head of project management in the school district’s Educational Technology Services Department, stresses that state regulations in Florida allow school officials to do what his district did in this instance–make a major contract decision after informally soliciting quotes from competing companies, rather than formally asking for sealed bids. Florida has more stringent rules for large purchases than for leasing arrangements such as the one in Lake County.
In one informal solicitation, Lewis wrote to a vendor last spring: “We are looking at the possibility of changing PC providers for our student computers. Please provide a quote for the build specification below and include installation and imaging. Your quote should be for an identical system, and should be your best price. I need your response by close of business tomorrow….”
Complicating the picture is how the computers were to be provided by Dell and HP, among other companies whose quotes were invited by the Lake County Schools. At first, companies were asked for prices that included the professional edition of the Windows XP operating system, which–unlike the less-costly home edition of XP–is compatible with the Lake County network.
But according to Lewis, a quote from Dell that district officials initially cited in comparison with one from HP mistakenly used a home-edition price from Dell instead of the higher professional-edition price. “This was a mistake,” Lewis acknowledges, because it ended up comparing “apples to oranges.”
Even so, he says, Dell’s actual pricing with XP-professional was still lower per unit than was HP’s comparable figure–a three-year cost of $650 from Dell versus $679. District officials ultimately opted for an adjusted Dell price of $613 per unit, which included $568 based on XP-home plus $45 for a Microsoft Office agreement.
Did HP get a fair shake? Lake County administrators say Yes, the Sentinel’s July 11 article implied No, and the school board wants to find out for certain.
Jimmy Conner, an influential member of the school board who introduced a motion that called for the audit, says HP was “never given the opportunity to bid on the XP-home version.”
“How fair is that?” Conner asks. “You don’t change the specs after you’ve picked your company.” He also asserts that Dell itself covered part of the cost for its proposal after the school board “refused to pay for it.”
Conner says he does not wish to prejudge the audit’s outcome but expects the findings to be “clear.”
Outside observers may wonder what to make of the Lake County experience, aside from the fact that it has included a public spat between two of the world’s top technology companies.
Denise K.Schneider, a Florida procurement specialist who says the Sentinel’s July 11 report made her “want to ask questions,” also sees a lesson for school officials in other parts of the country. They must be certain, she says, not only of what their state government’s guidelines are for purchases and leases, but also of their own school board’s policies, as well as any relevant federal regulations.
Schneider is a procurement administrator in Florida’s Orange County Public Schools and vice president of the Florida Association of Public Purchasing Officers. She says she doesn’t know first-hand what occurred in Lake County, but she speculates that similar controversies can arise simply because competition produces losers as well as winners. “A lot of times,” she says, “it’s vendors crying because they didn’t get the contract.”
Lake County Schools