Wichita Falls teachers run off 30 million copies on WFISD copy machines every year, and with the district’s new online CSCOPE curriculum expanding, that number of copies is expected to rise to 35 million next year.
So WFISD Purchasing Director Janet Powell knew her purchase contract for several dozen new copy machines had never been more important.
But the deal that started out as one of the best deals she’d ever landed soon turned into the biggest fiasco of her 15-year purchasing career when vendor Konica Minolta backed out of its agreement just days after the deal had been sealed.
After seeing the competition’s bids, Konica offered a different, higher bid.
It felt like a bait-and-switch to her, Powell told board members — a tactic of offering an unrealistically low price to create interest and buy-in and then switching to a more reasonable offer at the last minute.
Konica Minolta’s decision to withdraw its original bid prompted Powell to advise WFISD board members to rescind the awarded bid and make a claim on the bid bond — a career first. The bid bond provides insurance to the district of 5 percent of the contract in case the deal sours.
In a school board special session Tuesday, Powell told board members the trust had been breached with Konica Minolta and urged the district to now tap its second-best bid from vendor Benchmark Xerox to provide copiers and maintenance for the next three- to five-year contract. Board members approved the new bid unanimously.
Konica Minolta vice president Richard Langlotz admitted to the Times Record News in a telephone interview that a “horrible mistake” was made by a rogue employee who didn’t follow directions, which caused Langlotz to have to retract a bid for the first time ever.
He said he’d never had a situation even remotely close to this, but denied it was a bait-and-switch. “I deeply regret that she feels that way,” he said. “That hurts.”
So how did a bid to buy 54 copiers turn into the biggest drama in the careers of both WFISD’s Powell and Konica Minolta’s Langlotz?
For Powell, the arrangement crafted with Konica Minolta sounded like a spectacular deal from the beginning.
It included 59 machines at a purchase price of $468,939, remarkably less than the district’s last contract price several years ago of $535,000 for just 33 machines.
But even more incredible, the maintenance price for all the copiers — which is where the true expense comes in the world of copy machines, Powell said — was quoted at $69,000 annually, $71,000 less each year than the former contract of $140,000 annually.
Knowing that teachers were copying more than ever and the number of copies was expected to rise, Powell wanted a deal that included an “all-you-can-eat” maintenance charge — a flat rate that wouldn’t change if the number of copies continued to escalate.
The savings in maintenance on this new contract of $71,000 annually for up to five years was so staggering to Powell that she found herself asking the Konica Minolta sales rep — and his manager and his supervisor and his supervisor’s supervisor — if they were sure that number was correct.
“This wasn’t my first rodeo,” Powell said.
She scheduled eight meetings with multiple Konica representatives, always asking if they were certain about the maintenance bid.
In fact, she asked it so often that she felt she was being obnoxious.
But all her questions brought solid responses. “Konica said they were not typically in the school business. They thought this was the way to break in to schools,” Powell said. “They gave us good feedback.”
After Powell recommended the bid to board members, who unanimously supported it in a vote May 17, Powell was approached by a company rep soon afterward who said they made a mistake on the copier price. They suggested minimal changes in the machines for a cost difference of just $343 more, which was acceptable to Powell.
“But the next day, the Konica vice president came in and said they’d made a mistake,” Powell said, “and they couldn’t hold with the maintenance cost. They gave us a new number.”
Instead of the $69,000 annual maintenance fee that Powell was so happy with, they quoted an annual cost of $114,000 per year, $44,000 more each year for a total increase of $220,000 over the contract life — still a deal that Langlotz said he thought was “outrageously good.”
Still, he regretted backing out of the original deal.
“I felt horrible,” Langlotz said. A rogue employee had not followed directions given to him as the bid was being created, he said, and, like dominoes, the mistake rippled throughout the contract.
The bid also was somewhat unusual because it offered a flat fee for maintenance, he said.
“Janet put together one of the best processes for acquiring copiers that I had seen,” Langlotz said. “The issue with this bid had nothing to do with that. It was an employee making a very unfortunate decision.”
That employee was disciplined, but remains with his company, he said.
The bid turned out to be the most aggressive bid he’d ever written, Langlotz said. Even after discovering the mistake, he tried to fix it. “I bent over backwards to make it right,” he said. “Certainly there are things more important than money at this point.”
But staying true to the original bid would have crippled the company in West Texas and Wichita Falls, especially, he said. “We already had this deal subsidized from our parent company in Japan to the tune of hundreds of thousands of dollars. Another $220,000 is really big money,” he said.
He countered the original offer with another good one, he said.
But trust was breached, Powell said.
“To wait that long to tell us they’d made a mistake was unacceptable,” she said.
Knowing they needed a solid relationship with a copier vendor for the next three to five years, Powell opted to call in the bid bond and accept the second lowest copier bid from Benchmark Xerox, whose machines had also been tested on the campuses and performed similarly well.
Now, WFISD will pay $375,116 for 54 machines — buying five fewer and saving $93,823 over the original Konica deal. The annual maintenance cost will now be $129,600 each year, $60,600 more each year for a total five-year increased cost of $303,000.
In the end, Powell said, she was reminded about the truth of the age-old advice: “If it sounds too good to be true, it probably is.”
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