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Contract: State must pay if laptops are damaged, lost or stolen

Here's a surprising feature of the state's new $182 million, eight-year contract with Hewlett-Packard for laptop computers for high school students: The company will retain title to the computers, and the state, which will just be renting them, will be liable for all risk of loss, including damage or theft. The contract, in Attachment 1 on Page 5, says, “Lessee,” which in this case is the state, “shall bear the entire risk of loss with respect to any asset damage, destruction, loss, theft, or governmental taking, whether partial or complete.” If a laptop is damaged, the state must have it repaired at state expense - within 60 days. If one is lost or stolen, the state would have to pay H-P for it.

The amount the state would have to pay would be the “casualty value,” which would be, “All amounts due to date of payment plus the remaining payments for the balance of the Schedule term plus $35.” The schedule term? Four years. The state has contracted to pay $292.77 per unit per year, with each unit on a four-year replacement schedule; that means over the four years, the state will pay $1,171 per unit.

State Department of Education spokeswoman Melissa McGrath said the state doesn't expect much in the way of such losses. “In speaking with other schools and the state of Maine that have fully implemented one-to-one programs, they estimate just about 1 percent of devices a year, if even that, must be replaced or repaired outside the warranty,” she said. “We do not believe Idaho will be any different.”

H-P, in the contract, agrees to provide a full manufacturer's warranty on the laptops for four years. An example: If the hard drive went out in the third year, they'd replace it. But they wouldn't cover accidental loss, damage or theft. In fact, H-P writes in its proposal that it “strongly recommends” an optional one-year accidental damage protection service that it provides for new laptops at a cost of $17 apiece. That's not covered by the contract, however. Neither is an optional service that would cover “No-Fault Replacement Service” for the computers. Schools or districts could purchase that additional service at a price of $4,750 for 10 incidents, according to the contract.

The contract includes a provision that H-P will provide extra units - 3 percent beyond those ordered - for “hot-spare replacement units.” That would allow a student whose computer stops working to get an immediate replacement, while the non-working one goes in for repair. But that's only for items covered by the manufacturer's warranty. “Those not covered under the four-year warranty would be in addition to the contract,” McGrath said.
  


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Betsy Z. Russell covers Idaho news from The Spokesman-Review's bureau in Boise.

Named best state-based political blog in Idaho for 2013 by The Fix

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