As users debate the pros and cons of Microsoft Windows 95, Air
Force Desktop IV contractors have a more pressing debate under way: Must they foot the
bill to supply the new operating system for hundreds of thousands of existing federal PCs?
Desktop IV stipulates free software upgrades for all systems installed during its life.
However, Microsoft Corp. calls Windows 95 a "migration" to a 32-bit platform,
which leaves the definition of an upgrade open to interpretation.
Many government contracting officers consider Win95 a new version of an older program.
Vendors say it's not and argue that the cost of putting it on more than 300,000 systems
sold under Desktop IV could set them back more than $27 million.
It's not certain how many Desktop IV users would install Win95 even if it were free.
Many lack the 8M of RAM that is a practical prerequisite. But the Air Force has taken the
position that the upgrade should be available at no cost under the terms of the contract.
Friction among the government, the vendors and Microsoft has been building for six
months, with little progress in negotiations.
"We think Windows 95 offers new functionality and is a shift to the 32-bit
architecture," said Phil Lavery, district manager for Microsoft's federal business.
"The 32-bit code presents a new platform, and there is a lot of functionality that's
different from the 16-bit architecture."
Lavery would not comment on negotiations with the Desktop IV vendors. Likewise,
officials at the Air Force Standard Systems Center in Montgomery, Ala., confirmed that
negotiations are under way but would say no more. SSC awarded the contracts and
"If we had to upgrade everyone, it would be a heavy hit for us," said Patrick
Gallagher, a spokesman for Zenith Data Systems Corp., one of the two Desktop IV
contractors. "It's not what we see as a natural upgrade, it's completely different.
It's like upgrading MS-DOS to Windows NT or DOS to Unix."
Gallagher said ZDS is trying to try to compromise on who will get Windows 95 and
whether it will be for free. Since August 1993, ZDS has sold more than 180,000 Desktop IV
computers, each eligible for software upgrades.
"This should have been worked out by Halloween," he said. "We're having
a tough time negotiating this one."
Compounding the problem, vendor agreements with Microsoft do not cover Win95, so ZDS
and the other contractor, Government Technology Services Inc., could be forced to pay
nearly full price for the product.
"Usually we don't pay for upgrades; we pay a lump sum to the company and then get
the upgrades," Gallagher said. "But while Microsoft's ads all say Windows 95 is
an upgrade, they're telling us it's not, and they're not including it in our contract. We
would have to pay for the operating system and then give it away."
GTSI has sold about 154,000 systems to the government under Desktop IV. The company has
been in an economic downswing for more than a year, recently laying off 10 percent of its
employees. To provide free Windows 95 upgrades now would aggravate the financial problems.
"We're still talking with the government about it," said spokesman Carter
Cromley. "Windows 95 is not an upgrade, and we don't think we should be responsible
for sending it out."
Although several Air Force officials said they have tested Windows 95 and like it,
Gallagher said he doesn't believe there's much demand for the new OS on existing machines.
"We usually ship upgrades automatically, but I know a large number of end users
said they didn't want it," Gallagher said, citing Scott Air Force Base, Ill., as an
Scott officials "thought upgrading would be too much trouble," he said.
"It would be a logistical nightmare for us."