VITA pays contractor $9,000 over life of a laptop

Virginia will pay its corporate IT partner $9,000 over the five-year life of each laptop computer state employees use, under a $2.3 billion, 10-year contract.

The money covers a range of services and the replacement cost of the computer — a replacement that the contractor would own, said Marcella Williamson, executive director of the independent board that oversees the Virginia Information Technologies Agency.

“Think of it like electricity — the electric bill you pay is based on your actual consumption . . . for recovering the direct and indirect costs to the utility company for providing that service,“ Williamson said.

Meanwhile, the agency said its contractor, Northrop Grumman, has missed another key deadline, this one for “service-level agreements,“ the 193 detailed performance standards for various computer-system functions.

And only one of the 11 agencies in which VITA has said Northrop Grumman hit 90 percent of its target to upgrade equipment and services was among the biggest 20 state agencies with 1,000 or more pieces of equipment, the agency disclosed yesterday. The others were among the smallest agencies in the state, ranging from the War Memorial Foundation to Gunston Hall to the Department of Labor and Industry.

The contract covers 61,000 personal computers, including 13,435 laptops. Northrop Grumman so far has replaced 9,536 laptops.

Virginia taxpayers, through VITA, pay Northrop Grumman $150 per month for each laptop covered by the contract, whether the computer still is owned by the state or is a Northrop Grumman-owned replacement of an older piece of state-owned equipment.

The figure includes $26 a month to cover the cost of replacing a laptop after five years, as well as an $8-a-month fee that goes in part for shipping and procurement expenses. The $26 cost translated to a replacement cost after five years of $1,560.

The most expensive laptop sold by retailer Best Buy sells for a little less than $2,500.

If the contract expires before a laptop is replaced, the state has the option to buy it or lease it from Northrop Grumman.

The rest of the $150-a-month state payment covers technical support, software licenses, network charges, and help-desk services.

In contrast, Henrico County’s bill for the 26,000 laptops it gives middle and high school students comes to $39.33 a month for leasing the computers themselves and all support services. Henrico leases its computers from Dell Marketing L.P. and has kept them for resale at the end of its contracts.

The schools’ needs differ from the state’s, though VITA has not replied to repeated requests for details about its technical specifications for laptops.

Williamson said VITA sets standards and technical requirements for equipment under the contract.

“The contract includes provisions for benchmarking costs and for maintaining ‘best customer’ status to ensure costs remain competitive throughout the life of the agreement,“ she said.

The contract also sets performance standards for services, through 193 “service-level agreements.“

This spring, VITA boasted that Northrop Grumman was carrying out all but two of the agreements.

But the agency said yesterday that the actual number Northrop Grumman was carrying out as of June 30 was 159 out of the 193. The deadline was June 30.

VITA, meanwhile, granted interim approval to Northrop Grumman’s performance on 102, determining that they worked as intended during an initial period of testing and monitoring.

None has won full approval, VITA reported.

The agency also reported it negotiated modifications with Northrop Grumman to ease standards for the help desk and messaging service.

The modifications increased the amount of time the help desk has to answer calls, from 30 seconds to 60 seconds, and the target rate for abandoning calls from no more than 2 percent to no more than 5 percent.

It also cut the standard for part of the statewide e-mail service from no more than one hour of outage a month to no more than two hours a month.

In return, Northrop Grumman cut its charges for 2007 by $900,000. The state paid the company $208 million that year, a Richmond Times-Dispatch review of VITA financial reports showed.