California Awards $116M In Hardware Contracts

The contracts were awarded under the California Strategic Sourcing Initiative, a move by the state to centralize its IT purchases and drive down prices. As a result of the new contracts, the state received price reductions ranging from 15 percent on peripherals to 46 percent on printers, state officials said.

The government expects to spend $53 million over the next year to buy desktop PCs from Gateway, Irvine, Calif., and from a consortium put together by Hewlett-Packard, Insight Enterprises, and Western Blue, a Sacramento, Calif.-based solution provider.

The state also plans to spend $22 million on notebook PCs from IBM and Gateway. A spokesperson for the state said the deal was signed before the sale of IBM's PC Division to Lenovo, so IBM will essentially be a reseller of Lenovo notebook PCs.

The HP, Western Blue and Insight team won contracts worth about $8 million for peripherals and $25 million for printers, while Gateway won the sole contract for monitors, worth about $9 million.

An important part of the contract is state requirements that at least 25 percent of the business go through small businesses and at least 5 percent through disabled veterans business enterprises (DVBEs), said Vin Riera, vice president of Gateway's government sector.

"The state asks that we recognize the importance of small businesses and DVBEs," Riera said.

Much of the rest of the Gateway part of the contracts will be sold direct to the state, unless some partners can meet the value-added requirements of the government, Riera said. "Gateway can't provide the networking, cabling and so on that the state needs," he said.

For Gateway, the contracts represent its first major business with California state agencies. "We are the only vendor to sell the full portfolio into the state," Riera said.