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China-based firm to provide state computers
[December 09, 2005]

China-based firm to provide state computers

(Charleston Gazette, The (WV) (KRT)) Dec. 9--West Virginia government agencies have started to buy computers, monitors and laptops directly from a manufacturer, a change expected to save the state about $2 million a year, state officials announced Thursday.

The state awarded the computer contract this week to China-based Lenovo, which acquired IBM's personal computer division last spring.

For the past 15 years, state agencies bought computers through local dealers. The state spends between $10 million and $15 million a year on office computers.

"We are getting superior machines at a drastically reduced cost," said Kyle Schafer, West Virginia's chief technology officer.

Earlier this year, Schafer decided that state agencies should buy directly from a manufacturer after scrutinizing the prices some agencies were paying for desktop computers and laptops through the existing contract. He checked with his former employer, NiSource Corp., and determined that West Virginia agencies were paying 20 percent more than NiSource for the same computers

In its bid, Lenovo promised to beat the state's old computer prices by 20 percent to 60 percent. Standard desktop computers will cost $548 compared to $956 last year, according to a price sheet. Prices for laptops will drop from $1,869 to $1,164. And state agencies will pay $267 for computer monitors instead of $378.

"It's a significantly better deal," Schafer said. "We're looking at more than $8 million in savings over the next four years. It's double the savings we anticipated."

Lenovo's contract runs for two years with an option to renew for another two years.

The company's executive headquarters are in Purchase, N.Y., with principal operations in Beijing, China. Lenovo employs more than 19,000 people worldwide.

Hewlett-Packard and Dell also bid on the state contract.

As part of Lenovo's contract, Huntington-based computer dealer Ncompass is providing maintenance and warranty service on the state agency computers.

"This continues to leverage West Virginia-based companies," Schafer said.

Some West Virginia computer dealers -- some of whom receive 60 percent of their business from state government -- say the new contract will force them to lay off employees. They expect to lose millions of dollars in state business.

Eventually, state agencies will be allowed to order new computers electronically. Orders are expected to be processed within 24 hours and shipped within days.

With the old contract, state agencies sometimes had to wait 30 days before new computers arrived.

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