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U.S. State Department withdraws Kindle contract proposal

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Updated with statement from State Department (see below).

The U.S. State Department, which was considering a $16.5-million no-bid contract with Amazon (s AMZN) to provide Kindles, content and services for overseas language programs, has officially withdrawn its proposal, saying it “intends to conduct additional market research and reexamine its requirements for this program.”

Gary Price at Library Journal’s Infodocket blog first discovered the notice about the withdrawal of the contract, which was posted to the State Department’s website August 15 at 4:00 p.m. ET.

A State Department spokesperson provided the following statement:

The Department of State continues to pursue technology that enhances our ability to provide international audiences with relevant, real-time content on U.S. society, culture, and English language learning.  In order to conduct additional market research and further explore technological options for our public diplomacy programs, the Department of State opted on August 15 to end the Request for Proposals for the Amazon Kindle in favor of proceeding with a Request for Information (RFI) process. This action will open to all vendors the opportunity to respond to the Department’s requirements for a mobile learning program.

The contract that the State Department was considering in June would have provided 2,500 Kindle Touches in the first year, preloaded with 50 titles apiece, at a guaranteed $2.29 million, with the option to renew the contract for four more years. The upper limit on the five-year contract was 7,000 Kindles per year. State Department spokesman Philippe Reines suggested to me at the time that many of the books would be in the public domain (i.e., free) and that other services would include preloading content and shipping devices.

If the contract had gone through and was renewed for a total of five years, and if State had purchased a total of 35,000 Kindle Touch 3Gs each priced at $170.10 (a 10 percent discount) during that time, each with a case and adapter valued at $20, that would have left $9,846,500 for content, shipping and “associate costs.”

It appeared that the deal would take place, as Amazon CEO Jeff Bezos and Secretary of State Hillary Clinton announced in June that they would hold a joint press conference to announce the Kindle Mobile Learning Initiative. Then the State Department postponed the press conference to an unspecified later date. It never took place.

The National Federation of the Blind filed a complaint with the State Department saying that any agreement to purchase devices that are inaccessible to the blind is a violation of the law, but it is unclear whether the complaint had any bearing on the deal’s failure.

7 Responses to “U.S. State Department withdraws Kindle contract proposal”

  1. The Amazon Kindle platform may be closed in some ways but is very open in others. The company did start the developers program that led to educational apps for the e-ink e-reader (e.g., ereviewbook, the ultimate quiz, and 24/7 tutor ).

  2. Elizabeth Lang

    Yup. Kindle’s format is closed. You can read other books on it if you know how to convert it to pdf or convert other formats to Kindles, but it places a restrictive barrier against anyone who wants to buy a book from anyone else and port it over to Kindle unless you have some computer knowledge, time to research it, the ability and resources to install programs that will do this for you, which many people don’t. Thus giving Amazon a great advantage. It would have been very convenient…for Amazon. Of course they would bend backwards providing services, even for free, so that the government would help it gain more control over the ereader market. It’s the old con. Lots of flash and free stuff with one hand…but watch out for the other.

  3. Sam Katz

    You’re close here, it’s the epub format that’s open and amazon’s own format that’s closed. most ereaders (ibooks aside) uses epub with adobe drm. apple uses their own drm.

  4. Just reading between the lines here. Looks like to me the reason that the State Dept. withdrew the contract MAY have been (speculation) to check out the “opportunities” inherent in the use of “other” breeds of digital readers. Buying Kindles would limit the users to ebooks published in epub format, wouldn’t it? Whereas, a different reader might be able to utilize ebooks published in differing formats like HTML, etc. Not sure of all of the ramifications there, but with that much money at stake, looks like the SD was prudent to bring in more digital reader vendors, too.

  5. If I’m not misunderstanding the math, the State Department would be buying a maximum of 35,000 units (7,000 x 5 years) for $16.5 million. That is $471 each for a unit that retails for a little over $100. I understand it is preloaded with books but this seems like overkill and should definitely be put out to bid. Also, if the gov’t is giving these away, why can’t they use the cheaper non-touch units?

    • rpm, you should read Laura Owen’s earlier columns on this. The contract was also for a 24/7 dedicated help desk globally for this + the cost of 3G internationally (to be paid by Amazon), the cost of logistics, free replacement of any broken Kindles even if accidental, with free shipping in both directions, and many other requirements and restrictions.