Thursday, February 19, 2009
This is almost too delicious.
A longtime Xerox partner has to take on a newbie Xerox dealer.
The Newbie looses the bid. The Newbie plays the "he didn't play fair" card. Ends up representing all that is wrong in copier sales.
This article from the Westport News, written by Frank Luongo, explains it all better than I could.
Rejected copier bidder protests contract choice
By Frank Luongo
In losing the bidding competition for the Westport school system's new contract for photocopier management services, CBS/Xerox (CBS) of Newington has described the outcome as fiscally flawed.
"It is without question that this is an irresponsible financial decision to the taxpayers of the Town of Westport, the Westport Board of Education (BOE), as well as the respective teachers, faculty and students," CBS President Wilson Vega expressed in a formal protest on Dec. 18 to Assistant Superintendent for Business Nancy Harris.
Vega said that the school system would be paying $137,168 more over the term of the contract than the CBS bid would have cost, based on what he said would be an annual higher cost of $34,292 in the ACT agreement.
ACT President Gregory Gondek said in a telephone interview Wednesday that the net cost of leasing replacement machines for a 60-month term, together with a run of 5,000,000 copies at a $.0090 cost-per-copy, would be $45,000 per quarter, after a credit to the school system of $3,208 each quarter for the machines replaced.
A review of the bid documents shows that CBS, which is owned by Xerox, had proposed quarterly payments over the course of a 48-month equipment lease, ranging from $39,074 to $39,873, depending on the option chosen, based on a quarterly volume of 5,008,251 copies at a $.0042 cost per copy.
In answering CBS's protest on Dec. 22, Harris did not respond to Vega's claim about the higher costs of ACT's services, but said that his letter "incorrectly" assumed that the "photocopy management services were awarded on the basis of which bidder bid the lowest price."
Rather, Harris said, the school system's request for proposals (RFP) for copier services had made it clear that the BOE at its "sole discretion" would make the award based on a range of considerations "in addition to price.
The BOE, in fact, did not "review or approve the bid responses," according to Marjorie Cion, the executive assistant to the superintendent, who confirmed by e-mail, after consultation with Superintendent of Schools Elliott Landon, that the school board did not take up the copier contract matter at a meeting in public or in executive session.
In a "certificate of fact" for the law firm that represents the school system, Shipman and Goodwin, Landon said that the copier-contract agreement had been "duly authorized and approved" by the action of the school board, authorizing him and Harris "to sign contracts on behalf of the Board of Education."
The certificate notes that there is "no action or other proceeding pending" that could impede the enforcement of the agreement except the CBS protest.
On the basis of Landon's certification and a meeting with CBS on Jan. 6, Shipman and Goodwin said in letter to CBS on Jan. 8 that "the board's decision to award the contract to Advanced Copy Technologies is final. The board deems this matter to be closed."
Cion said in an e-mail message that, according to Landon, Shipman and Goodwin's description of the board's role uses legal "terms of art" to convey the point that Landon and Harris had acted under a BOE authorization for them to sign contracts, not that the board had "decided to award" the contract.
The signing authorization, which eliminates the need for a direct BOE review and approval of contracts, was contested several years ago in a copier-contract dispute over the transfer of the school system's copier services also from a Xerox company to ACT, which has now had its services extended.
In the new contract dispute, Harris maintains that CBS did not satisfy the RFP requirement that the vendor supply only newly manufactured, "latest model" equipment with no "recycled, reconditioned, remanufactured or used parts."
Harris said in the Jan. 8 letter that CBS's response to the RFP "discloses" that the company's proposed equipment "contains recycled components."
CBS had tried to counter that contention, according to a letter from Vega on Dec. 30, by saying that its Xerox machines are new, but "as with most manufactured products today, there are some elements of recycling in order to meet government standards as well as to be environmentally responsible."
"All office product manufacturers have adopted the policy of using recycled parts as a way of reducing their carbon footprint," Vega said, including Lanier/Ricoh, which manufactures ACT's copier machines.
Gondek denied that the machines his company uses have recycled components. He said that he has visited Lanier/Ricoh plants and has seen only totally new copiers, although he acknowledged that the manufacturer does recycle toner cartridges and printer drums.
Harris said that CBS had also failed to prove that it has been a "factory authorized dealer for the products being proposed for a minimum of three years," as she wrote to CBS, pointing out that CBS has been owned by Xerox only since May of 2007, which, she said, fails to meet the school system's service-experience test in its RFP.
In answering that objection, Vega relied on the good reputation of the Xerox product, its standing as a Fortune 500 company and the fact that CBS is currently servicing Xerox products in the public schools of Greenwich, Darien, East Windsor, Guilford, Madison, Old Saybrook Ridgefield, Trumbull, Watertown, Weston and Wilton.
Click to email me.
Labels: The Market