Contract award for Desktop V is off fast track

The Air Force has given up trying to award the billion-dollar
Desktop V contract without entering into discussions with bidders. The change of plan will
delay the award by at least three months.

Vendors said the move also renews doubts about the feasibility of awarding large PC
buys using the so-called fast-track approach. After delays in planning the buy, the
service set a bid deadline for last July and promised to award in December without
best-and-final offers or vendor discussions.

In a terse statement to bidders on Jan. 8, officials at the Air Force's Standard
Systems Group (SSG) in Montgomery, Ala., said they would conduct discussions with
"all offerors remaining in the competitive range" for the full-and-open portion
of Desktop V.

Officials at SSG said they hope to make an award in April.

The Air Force did not specify which bidders are still in the running, but an SSG
contracting official said all companies were to be notified of their status by last week.
The service plans to award two contracts for the full-and-open portion of Desktop V; 8(a)
vendors will bid for a third, separate contract.

All three winners will then compete for orders, with $1.6 million in orders guaranteed
to each.

The award delay again raises the specter of a gap in the flow of PCs between the end of
Desktop IV and the beginning of Desktop V, which the service initially planned to award
nearly a year ago.

A contract modification last August let the Air Force buy an additional 100,000 PCs
through the Desktop IV contracts held by Government Technology Services Inc. and Zenith
Data Systems Corp. But those contracts expire Feb. 1, and, according to vendor and service
sources, there is a lengthy systems waiting list.

Executives from companies that bid on Desktop V said they were puzzled and disappointed
by the delay. Desktop V was billed as the result of the Air Force's decade-long effort to
improve the speed and efficiency of large PC buys. A key part of that goal, trumpeted
repeatedly at industry briefings last year, was avoiding the pre-award discussions that
can consume months in back-and-forth questions and clarifications.

Industry sources said the Air Force had put itself in a good position to skip
discussions by producing a watertight request for proposals that answered almost every
imaginable industry question in advance.

"This procurement was structured extremely well," one executive said.
"The bidders know exactly what the government wants, and [the Air Force] should have
been able to go forward without discussions."

Ironically, the high quality of the Desktop V RFP and the resulting uniformity of the
proposals might have forced the Air Force to enter discussions, some vendors suggested.

Several bidders said they think the Air Force has picked one winner, but that all the
remaining viable bids are so closely ranked that contracting officials need to hold
discussions with bidders to unearth additional discriminators before picking a second

With the exception of Hughes Data Systems, all the Desktop V bidders are veterans of
the federal PC market and likely offered proposals with tight profit margins within a
relatively narrow price band.

Along with Desktop IV incumbents Zenith Data Systems and GTSI, the bidders include
Sysorex Information Systems Inc., NCR Corp. and Electronic Data Systems Corp.

"When you look at the caliber of these bidders and how few there are," said
an executive from one bidding company, "it's hard to believe [the Air Force] was even
able to make a competitive range determination" to eliminate anyone.

The industry sources also said they expect that any vendor eliminated would almost
definitely protest removal from the competitive range.

"In this group, not making the down-select would be just too embarrassing,"
one executive said. "It's the sort of thing that will get you fired. So people are
going to fight."

Through Desktop V, the Air Force expects to buy up to 360,000 desktop and portable PCs
and servers.

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