The yagottabekiddin clause

Last weekend I wrote in a column that the financial terms of the computer deal between the state of Idaho and HP sounded, on a per-computer basis, not so terrible.

I take it back. The terms do turn out to be terrible. Betsy Russell of the Spokesman Review read through the terms of the agreement, and she found this:

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.

I’d had the impression – and probably most Idahoans had – that the contract would include repair, coverage and maintenance on the part of the contractor, who is after all getting paid approaching $200 million. But no. A second-grader drops the computer on the way home from school, Idaho taxpayers pay. A fourth-grader downloads a virus that corrupts the bios, and maybe spreads it to classmates, Idaho taxpayers pay.

Tens of thousands of computers. Liability: Seemingly unlimited. Unbelievable.

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One Comment

  1. fortboise said:

    Your numbers are a bit unbridled. The computers are slated for h.s. students, not 2nd and 4th graders. It’s not “half a million,” unless even more creative arithmetic is in play. $182M/8 years = $23 million-ish/year, and at $300 apiece, that’s 76,000 or so machines. With a 4-year term for the leases, double that over the course of the contract.

    Which is to say that are not plenty of reasons to reject it. If I were one of Idaho’s duped legislators who got talked into getting taxpayers to buy this pig in a poke I would sure be voting “no” on Prop. 3. As a private citizen I certainly will vote no.

    October 30, 2012

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