US State Department cancels no-bid Kindle contract
updated 06:54 pm EDT, Thu August 16, 2012
Contract worth up to $16.5 million over 5 years up for bid
Prior to payment and delivery, the US State Department has torpedoed its $16.5 million contract with Amazon, proposed in June, for Kindle e-book readers. The contract is headed to a normal Request for Information process, rather than the no-bid award that Amazon was initially selected to fulfill. The program was intended for use in overseas language programs, and any device chosen would have to support wireless connectivity, central management, text-to-speech, long battery life and a number of other requirements.
In response to the multi-million dollar contract cancellation, a State Department spokesperson said that additional research and other technological options would be pursued to "open to all vendors the opportunity to respond to the Department’s requirements for a mobile learning program." The previous contract would have provided a minimum of 2,500 Kindle Touch units in the first year, preloaded with 50 titles for $2.29 million, with options to purchase up to 7,000 Kindles per year, and a renewal option for four additional years.
Electronista spoke with a State Department representative regarding the cost-per-unit on the previous contract, and was told that the "excessive cost was only one factor" behind the choice to open the contract back up for bids, citing "recent advances in technology and some upcoming devices altering the equation somewhat."
The document justifying the no-bid contract points out that the Department considered other e-readers from Barnes & Noble, Sony, and Kobo, finding that they lacked text-to-speech and global free Wi-Fi, and that they did not match the Kindle's battery life. The document also notes that the Department considered Apple's iPad, as the device met many of the necessary requirements. The iPad, though, was ultimately rejected the first time through the process, as its additional features were found to constitute a security risk and it lacked the requisite battery life and centrally managed platform for registration and content delivery other than the iTunes store.
The contract calls for the awardee to make available a discrete US Government-curated distribution and management platform whereby the Department will push content to its employees' devices as well as units provided for educational purposes. The vendor ultimately chosen will also be required to provide 3G services globally for the department, as well as an exclusive, private online document repository.
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It sounds to me as though the State Department is looking to get its hands on some Microsoft ZunePads. I'm willing to bet that State Department wants to stay with everything Windows. Rumors have it is that the ZunePad RT is going to be relatively cheap and if Microsoft's hardware partners start producing them in quantity, the prices should go even lower.
What's odd is that if Apple had a cancellation of an order like that, the share price would have dropped on the rumor. However, Amazon's share price is still soaring like nothing happened. That was like the loss of a sure thing.