US Army’s Consolidated Buy for Computer Hardware
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The US Army in the 21st century is an army on the computer and the network. Whether in a Kabul command post, on a Kandahar patrol, or at a Pentagon desk, the Army relies on desktop and laptop computers to stay connected and access intelligence.
Army laptops and desktops are made by the same companies that supply computers in the commercial marketplace: HP, Dell, Apple, Samsung, and others. To get the best deal on COTS computers, in 2005 the Army instituted the consolidated buy (CB) program, which enables Army customers to get laptops, desktops, and other computer equipment at bulk prices, even if they only purchase one at a time. The program is intended to save the Army money and ensure that computers purchased comply with Army IT technical and security standards. The Army estimates that its CB program has saved it millions of dollars on purchases of computer equipment since 2005.
This article examines the Army’s CB program for buying laptop and desktop computers, printers, and peripherals, and the contracts awarded to implement the program.
Consolidated Buy
In 2005, the Army CIO decided that paying for desktops and laptops on an ad hoc basis was getting too expensive. So it set up the CB program to take advantage of its power as a large customer to get bulk rates for computer hardware.
The CB program is run by the Army’s Computer Hardware, Enterprise Software and Solutions (CHESS) office (formerly the Army Small Computer Program). The program has produced cost savings of $231 million over its lifespan, according to Army estimates.
As a result of the program’s initial success in reducing costs, the Army CIO in a July 30/07 memo [pdf] required that all desktop and notebook computers be purchased through the CB program:
“All desktop and/or notebook computers must be purchased through the [CB program] … Organizations shall use the CB to satisfy their desktop and notebook requirements to the maximum extent possible.”
The CB program originally required computers to be purchased during a 2-month window twice a year – February-March and August-September. However, recent CBs have extended the window to longer periods. For example, the 1st one in 2010 (CB10) lasted from January 11 to March 31, and the 2nd one (CB11) was scheduled for June 14 to September 30.
All desktops and notebooks ordered through the CB are pre-loaded with the latest version of the Army Golden Master (AGM) standard software suite and meet or exceed the minimum requirements of the Army IT standards.
Procurement is streamlined through online ordering on the IT e-mart website. A contracting officer uses the IT e-mart website to compare prices on a desktop or laptop and award the order to the vendor with the lowest prices.
Volume Discounts
Commenting on the benefits the CB program provides to the Army, Michelina (Micki) LaForgia, project director of CHESS, said [pdf]:
“CHESS consolidated buys are unique in offering a balance between product choice and tremendous volume discounts versus a ‘winner take all’ award to a single vendor. Customers are able to access the CHESS website during the CB window (generally from six to eight weeks), view side-by-side comparisons of the models and price offerings of our nine vendors, and make the selection that meets their needs. Prior to implementing the CB, 90 percent of ASCP’s orders were for quantities of 10 or fewer items, so few customers benefitted from volume discounting. With CB, every buyer gets the advantage of the volume discount and pays the same unit price whether ordering one computer or outfitting an installation.”
The CB process works like this. After deciding what the minimum specifications should be for each computer equipment category, the Army’s Information Technology E-Commerce and Commercial Contracting Center (ITEC-4) – CHESS’s contracting activity – requests proposals from vendors. The proposals are evaluated, and products and prices are posted to the CHESS website.
Army customers use the website to compare the CB products. Customers work with their local contracting offices to place their orders. They can also place orders on-line via the CHESS IT e-mart or by ordering directly from the vendor.
As Earle Mundell, with the Army’s Program Executive Office Enterprise Information Systems (PEO EIS), which oversees CHESS, observed:
“The CB affords an opportunity for the smallest organization, even an ‘Army of One,’ to take advantage of its membership in the Army enterprise and receive the same low unit price that the largest Army purchaser receives.”
While all computer hardware is supposed to be acquired through the CB process, there are 3 exceptions: urgent requirements needed to be filled between CB windows, unique computer configurations, and an agreement with a host country outside CONUS. Permission for an exception must be obtained from the Army CIO.
The CB program is used not only by the Army customers, but also by other services as well as the National Guard. In fact, the Army National Guard purchased over 6,000 desktops and laptops through CB in 2009.
Contract Vehicle: ADMC-2
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While the CB program provides the process, contract vehicles provide the means by which equipment is ordered. The primary contract vehicle for computer equipment is the Army Desktop and Mobile Computing-2 (ADMC-2) contract.
In 2006, the Army awarded 9 companies 10-year indefinite delivery, indefinite quantity ADMC-2 contracts for a total value of up to $5 billion. The 9 companies who compete for CB business and their contract numbers are:
- W91QUZ-06-D-0001 – Telos (small business qualifier)
- W91QUZ-06-D-0002 – Dell
- W91QUZ-06-D-0003 – CDW-G
- W91QUZ-06-D-0004 – Hewlett-Packard
- W91QUZ-06-D-0005 – Integration Technologies Group (small business qualifier)
- W91QUZ-06-D-0006 – Transource Computers (small business qualifier)
- W91QUZ-06-D-0007 – Emtec (small business qualifier)
- W91QUZ-06-D-0008 – MPC-G (small business qualifier)
- W91QUZ-06-D-0009 – NCS Technologies (small business qualifier)
These vendors provide computer hardware from a range of manufacturers, including some of the vendors themselves. The list of manufacturers include: Ace, Acer, Apple, Compaq, Dell, Fujitsu, Getac, HP, Itronix, Lenovo, NCS, Panasonic, Transource, Criticom, Polycom, Tandberg, Wyse, Clearcube, Canon, Epson, Lexmark, Xerox, and Samsung.
The list of products that can be purchased through ADMC-2 contract vehicle is extensive:
- desktops
- notebooks/laptops
- all-in-ones
- personal digital assistants
- semi-rugged and rugged devices
- printers
- scanners
- digital cameras
- power supplies
- external storage
- transit cases
- displays (plasma, cathode ray tube, digital light processing, liquid crystal display, HDTV)
- videoconferencing
- related accessories and upgrades
- non-ESI software
Once the order is placed, the vendors have 30 days to deliver the equipment within CONUS and 35 days outside CONUS. Vendors are required to provide a 3-year warranty on desktop and laptop computers.
The Army estimates that as a result of competition engendered through ADMC-2, vendors offer discounts of up to 60% off standard computer prices.
Contract Vehicle: ITES-2H
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Another contract vehicle that the Army uses to procure computer hardware is the Information Technology Enterprise Solutions-2 Hardware (ITES-2H) contract. This is a companion contract to the $20 billion Information Technology Enterprise Solutions-2 Services (ITES-2S) contract, which is the Army vehicle for procuring IT services.
Also run by the CHESS office, ITES-2H provides servers, storage, client, and network solutions via 6 vendor contracts worth a total of $5 billion.
The 6 vendors and their contract numbers are:
- W91QUZ-07-D-0006 – Dell
- W91QUZ-07-D-0007 – IBM
- W91QUZ-07-D-0008 – GTSI
- W91QUZ-07-D-0009 – CDW-G
- W91QUZ-07-D-0010 – Apptis
- W91QUZ-07-D-0011 – WWT
The 6 ITES-2H vendors offer products in 9 hardware areas: RISC/UNIX servers, Intel/AMD servers, clients (workstations, thin clients, etc.), storage, networking equipment (routers, hubs, switches, etc.), network printers, network cabling and connectors, videoconferencing, and power supplies.
The vendors sell products from the following manufacturers: 3Com, Allied Telesys, Cisco, Dell, D-Link, EMC, Enterasys, Epson, Foundry, Hitachi, HP, IBM, NetApp, Polycom, Samsung, and Sun. In addition, Army customers can buy information assurance (IA) products under the contract.
Key Contacts as of June 2010
- Joann Underwood, Contracting Officer, ITEC4, phone: 703-325-3327, DSN 221-3327; email: joann.underwood@us.army.mil
- Joan Pesanello, Consolidated Buy Product Leader, CHESS, phone: 732-427-6784, DSN 987-6784; email: joan.pesanello@us.army.mil
- Patty Bortz, ADMC-2 Senior Program Manager, HP, phone: 703-543-6919; email: patricia.bortz@hp.com
- Marc Abramowitz, ADMC-2 Program Manager, Telos, phone: 703-724-4555; email: marc.abramowitz@telos.com
- Glenn Gardner, ADMC-2 Program Manager, ITG, email: glenn@itgonline.com
Contracts and Key Events
Aug 31/09: CDW-G in Vernon Hills, IL received a $9.9 million firm-fixed-price delivery order under a previously awarded contract (W91QUZ-06-D-0003) for 10,404 general purpose laptops for the operational forces refresh program, which updates aging US military technology. The order was awarded under the ADMC-2 contract.
July 30/07: The Army CIO issues a memo [pdf] requiring that all desktop and notebook computers be purchased through the consolidated buy program.
Feb 9/07: The Army Contracting Command awards 5-year indefinite-delivery, indefinite-quantity Information Technology Enterprise Solutions – 2 Hardware (ITES-2H) contracts to 6 contractors: Dell, IBM, GTSI, CDW-G, Apptis, and WWT. The total value of the 6 contracts could reach $5 billion. Products that can be procured through these contracts include servers, workstations, data storage, networking equipment, network printers, network cabling and connectors, videoconferencing, and power supplies.
April 24/06: The US Army awards 9 companies 10-year indefinite-delivery, indefinite-quantity Army Desktop and Mobile Computing-2 contracts for a total value of $5 billion. Small business qualifiers make up 6 out of the 9 companies: Telos Integration Technologies Group, Transource Computers, Emtec, MPC-G, and NCS Technologies. The other three companies are: Dell, CDW-G, and Hewlett-Packard [pdf].
Additional Readings and Sources
- US Army – CHESS Web site
- Government Computer News – Special Report: CHESS
- Washington Technology – CHESS Contract Report
- Military Information Technology (March 2010) – Smart CHESS Moves
- Government Security News (Jan 15/10) – US Army’s mammoth semiannual computer buy begins
- Federal Computer Week (Jan 4/10) – Army kicks off consolidated buying season
- DID (Aug 31/09) – CDW-G to Supply 10,404 Laptops under ADMC-2 Contract
- Army CHESS Office (August 2009) – Consolidated Buy Presentation [pdf]
- US Army (May 4/09) – Memo: Use of CHESS as the Primary Source for Procurement Commercial IT Hardware and Software [pdf]
- Federal Computer Week (2009) – Touching Every Soldier
- Army CHESS Office (2008) – 2008 Contract Vehicle Guide [pdf]
- US Army News Service (July 28/08) – CHESS consolidated buy period opens for computer products
- US Army (July 12/07) – Army IT Day: Army Small Computer Program [ppt]
- Recharger Magazine (Aug 20/06) – US Army Enlists HP
- DID (April 15/05) – PEO-EIS’ Kevin Carroll: The $36 Billion Dollar Man
