<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 4, 1997
REGISTRATION STATEMENT NO. 333-19635
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
DUNN COMPUTER CORPORATION
(Name of small business issuer as specified in its charter)
--------------------------
<TABLE>
<S> <C> <C>
DELAWARE 54-1424654 5060
(State of Incorporation) (IRS Employer I.D. No.) (Primary Standard Industrial
Classification Code No.)
</TABLE>
1306 SQUIRE COURT
STERLING, VIRGINIA 20166
(703) 450-0400
(Address and Telephone Number of Principal Executive Offices
and Principal Place of Business)
------------------------------
THOMAS P. DUNNE, PRESIDENT
DUNN COMPUTER CORPORATION
1306 SQUIRE COURT
STERLING, VIRGINIA 20166
(703) 450-0400
(Name, address and telephone number of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
JAY M. KAPLOWITZ, ESQ. MICHAEL P. WEINER, ESQ.
ARTHUR S. MARCUS, ESQ. STARK & STARK, P.C.
GERSTEN SAVAGE KAPLOWITZ, 993 Lenox Drive
FREDERICKS & CURTIN, LLP Lawrenceville, New Jersey 08648
101 East 52nd Street (609) 896-9060
New York, New York 10022
(212) 752-9700
</TABLE>
--------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: /X/
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT BEING OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES BEING REGISTERED REGISTERED PER SECURITY OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock(2)............................. 1,150,000 $5.00 $5,750,000 $1,742.42
Underwriter's Warrants...................... 1 $.001 $10 $ (4)
Common Stock(3)............................. 100,000 $6.50 $650,000 $196.97
Total Registration Fee...................... $1,939.39
</TABLE>
(1) Pursuant to Rule 457, estimated solely for the purpose of calculating the
registration fee.
(2) Includes shares issuable upon exercise of the Underwriter's over-allotment
option being sold by certain Stockholders of the Company.
(3) Consists of Common Stock issuable upon the exercise of the Underwriter's
Warrants.
(4) Pursuant to Rule 457(g), no fee is paid for the registration of such
securities.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
DUNN COMPUTER CORPORATION
CROSS REFERENCE SHEET SHOWING LOCATION
IN PROSPECTUS OF INFORMATION
REQUIRED BY ITEMS OF FORM SB-2
<TABLE>
<CAPTION>
REGISTRATION STATEMENT ITEM AND HEADING PROSPECTUS CAPTION
- ----------------------------------------------------------------- ------------------------------------------------------
<C> <S> <C>
1. Front of Registration Statement and Outside Front
Cover Page of Prospectus............................ Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus.......................................... Inside Front and Outside Back Cover Pages
3. Summary Information and Risk Factors.................. Prospectus Summary; Risk Factors
4. Use of Proceeds....................................... Use of Proceeds
5. Determination of Offering Price....................... Cover Page; Underwriting
6. Dilution.............................................. Dilution
7. Selling Security Holders.............................. N/A
8. Plan of Distribution.................................. Cover Page; Underwriting
9. Legal Proceedings..................................... Business
10. Directors, Executive Officers, Promoters and Control
Persons............................................. Management
11. Security Ownership of Certain Beneficial
Owners and Management............................... Principal Stockholders
12. Description of Securities............................. Description of Securities
13. Interest of Named Experts and Counsel................. Legal Matters; Experts
14. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities...... Management
15. Organization Within Last 5 Years...................... Prospectus Summary; Business
16. Description of Business............................... Prospectus Summary; Business
17. Management's Discussion and Analysis or
Plan of Operations.................................. Management's Discussion and Analysis of Financial
Condition and Results of Operations
18. Description of Property............................... Business
19. Certain Relationships and
Related Transactions................................ Certain Transactions
20. Market for Common Equity and
Related Stockholder Matters......................... Description of Securities; Risk Factors
21. Executive Compensation................................ Management
22. Financial Statements.................................. Financial Statements
23. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure................................ Not Applicable
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 4, 1997
PROSPECTUS
DUNN COMPUTER CORPORATION
1,000,000 SHARES OF COMMON STOCK
Dunn Computer Corporation (the "Company") hereby offers 1,000,000 shares
(the "Shares") of common stock, $.001 par value (the "Common Stock"), at an
initial public offering price of $5.00 per share (the "Offering"). The Offering
price of the Shares was established by negotiation between the Company and
Network 1 Financial Securities Corp. (the "Underwriter"), and does not
necessarily bear any direct relationship to the Company's assets, book value per
share or other generally accepted criteria of value. For a discussion of the
factors considered in determining the initial public Offering price of the
Shares, see "Underwriting."
Prior to this Offering there has been no public market for the Common Stock,
and there can be no assurance that any such market for the Common Stock will
develop after the closing of the Offering or that, if developed, it will be
sustained. The Common Stock will be quoted on the National Association of
Securities Dealers Automated Quotation National Market System ("NMS") under the
proposed symbol "DNCC." Upon completion of the Offering, the Company's officers
and directors will own 80% of the Company's issued and outstanding Common Stock
and will be able to control the outcome of any matters subject to a stockholder
vote.
SEE "RISK FACTORS" ON PAGE 8 FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
DISCOUNTS AND PROCEEDS TO
PRICE TO PUBLIC COMMISSIONS(1) COMPANY(2)
<S> <C> <C> <C>
Per Share................................................ $5.00 $.50 $4.50
Total(3)................................................. $5,000,000 $500,000 $4,500,000
</TABLE>
(1) Does not include additional consideration to be received by the Underwriter
in the form of (i) a non-accountable expense allowance equal to 3% of the
gross offering proceeds (of which $35,000 has been paid), (ii) any value
attributable to the Underwriter's Warrants ("Underwriter's Warrants")
entitling the Underwriter to purchase up to 100,000 shares of Common Stock
at a price per share equal to 120% of the initial public offering price, and
(iii) a management and financial consulting agreement for a period of
twenty-four months for an aggregate consideration of $60,000 payable in full
on the closing of the Offering. In addition, the Company has agreed to
indemnify the Underwriter against certain liabilities under the Securities
Act of 1933, as amended (the "Act"). See "Underwriting."
(2) Before deducting expenses of the Offering (including the non-accountable
expense allowance of $150,000) payable by the Company estimated at $475,000
($497,500 if the over-allotment option granted by the Company's current
stockholders described below is exercised in full).
(3) The Company's current stockholders who are members of management of the
Company (the "Selling Stockholders") have granted the Underwriter an option
exercisable within 45 days of the date of this Prospectus (the
"Over-Allotment Option") to purchase from such Selling Stockholders up to
150,000 additional shares of Common Stock on the same terms set forth above
solely to cover over-allotments, if any. The Company will not receive any of
the proceeds from any such sale of shares of Common Stock by the Selling
Stockholders. If the Underwriter exercises this option in full, the total
price to the public, Underwriting Discounts and Commissions and proceeds to
the Company and the Selling Stockholders will be $5,750,000, $575,000,
$4,500,000 and $675,000, respectively. See "Underwriting."
The Shares are being offered by the Underwriter, subject to prior sale, on a
"firm commitment" basis subject to receipt and acceptance of the Shares by the
Underwriter and subject to approval of certain legal matters by their counsel.
The Underwriter reserves the right to withdraw, cancel or modify the Offering
and to reject any order in whole or in part. It is expected that delivery of
certificates evidencing the Shares will be made against payment therefore at the
offices of the Underwriter on or about , 1997.
[LOGO]
, 1997
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND MUST BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND THE CONSOLIDATED FINANCIAL
STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS.
REFERENCES HEREIN TO THE "GOVERNMENT" ARE TO THE FEDERAL GOVERNMENT OF THE
UNITED STATES AND ITS DEPARTMENTS, AGENCIES AND OFFICES. UNLESS OTHERWISE
INDICATED, ALL INFORMATION INCLUDED IN THIS PROSPECTUS ASSUMES NO EXERCISE OF
THE OVER-ALLOTMENT OPTION. IN ADDITION, ALL REFERENCES IN THIS PROSPECTUS TO THE
"COMPANY" REFERS TO THE COMPANY AND ITS WHOLLY-OWNED SUBSIDIARY DUNN COMPUTER
CORPORATION, A VIRGINIA CORPORATION.
THE COMPANY
Dunn Computer Corporation ("Dunn" or the "Company") manufactures custom
computer systems for the Government and selected commercial accounts. Dunn
markets its products directly to the Government as a prime contractor or
indirectly as a sub-contractor to other federal contractors. In 1995 and 1996,
the Company's revenues attributable to Government sales directly and indirectly
through Government subcontracts were approximately 89% and 68%, respectively.
The Company supplies systems under its own label or the customer's brand name.
The Company's products include Intel based computer systems, notebook computers,
and high performance local area and Internet servers configured to meet customer
specifications. The Company also provides related services to its customers,
including integration and staging services, configuration control, upgrading
existing systems and world-wide warranty support. The Company does not provide
specialized or proprietary products to the Government. All Government contracts
have standard termination clauses which allow the Government to terminate the
contracts for convenience. The Government has not prematurely terminated any
contracts with the Company during the Company's ten year history.
PRODUCTS
The Company manufactures and assembles a full line of Intel based desktop
personal computers, client servers, and notebook computers. The Company recently
introduced a line of high end fileservers based on the newest Pentium Pro
processors and a high end Pentium notebook computer. The Company believes,
although there can be no assurance, that these two product lines will be two of
the fastest growing areas in the marketplace during the next three years.
DESKTOPS
The Company manufactures a high performance line of Pentium desktop personal
computers that are used as standalone and/or network computers. The systems
incorporate the newest Intel technology and can accommodate all the Intel
Pentium processors including the newest Pentium MMX. The Company's computers
have been tested by several computer publications, including Federal Computer
Week, and have been awarded (August 1996) by Federal Computer Week the
prestigious "Best Buy" as the "fastest Pentium ever tested." The Company strives
to keep ahead of the competition by constantly testing and incorporating the
latest technology into its products.
The Company is presently marketing an "All in One" desktop computer that
incorporates a 17" monitor, stereo speakers, microphone, Internet connection,
television tuner, and full Pentium computer. The system is packaged in a single
chassis with all the computer parts in a removable drawer for ease of upgrade
and maintenance. The Company believes that initial reaction to the "All in One"
has been very positive. The Company further believes that the "All in One"
product will have applications in the Government and with commercial customers
outside of the Government. The Company's "All in One" marketing strategy is
designed to appeal to both the Government and the commercial markets. To date,
the Company has not had significant sales of the "All in One."
3
<PAGE>
FILESERVERS
The Company has entered the lucrative high end file server market by
introducing a custom line of fault tolerant fileservers based on Intel Pentium
Pro (P6) Processors. The Company believes the fileservers will have application
to the commercial and Government markets. The Company markets a single, dual and
quad version of the processors. All of such processors are Microsoft Windows NT,
Novell, Banyan, and Token Ring compatible. The file servers offer the latest in
technology which the Company believes will provide it with a significant
price/performance advantage over its competitors, such as Hewlett Packard (HP)
and Compaq. The Company is presently providing servers to Lockheed Martin
Federal Systems, Inc. ("Lockheed") for the multi-billion dollar worldwide
Defense Messaging System (DMS). DMS is intended to be the largest private
messaging network in the world supporting approximately 2,000,000 users. The
Lockheed contract is a year to year contract that can be renewed for up to five
years. The contract, which was recently renewed, is automatically renewed if not
terminated.
NOTEBOOKS
The Company manufactures, on a brand name basis, a state-of-the-art notebook
with a 12.1" active matrix screen, 8 speed CD-ROM, built-in-stereo sound,
infrared communication, and many other advanced features. The system is
assembled and configured in the United States by the Company and meets the
Federal Government's stringent Buy American and Trade Agreements Act
requirements. The Company plans to market the Notebook product in both the
commercial and Government markets.
THE MARKET
GOVERNMENT
The Company markets to a wide array of Government organizations including
the Department of Defense, civilian agencies such as the Health Care and Finance
Administration ("HCFA") and the Judicial branch of the Government. The Office of
Management and Budget ("OMB"), submitted to Congress in January 1997, a
Government information technology ("IT") budget of nearly $26 billion. In
addition, the Electronic Industries Association, a major industry trade
association, estimates that Government agencies that are not required to report
their information technology expenditures, including the intelligence community,
will spend an additional $20 billion during the Government's fiscal 1997 on such
technology. There can be no assurance that the Company will receive any of the
budgeted funds. The Company believes that while Government down sizing has
decreased the number of federal employees, there has been an increase in the
demand for productivity tools, such as computers. In fact, President Clinton's
recently submitted budget provides for a slight increase in IT spending in the
upcoming year.
The Company believes that its historical focus on the Government has
provided it with the following advantages: (i) significant inventory risk is
eliminated because inventory is procured to satisfy firm fixed price contracts;
(ii) Government products are built to order allowing the Company to take
advantage of the latest in technology and market prices; (iii) a significant
reduction in bad debts due to the stability of the Government; (iv) a reduction
in selling and marketing expenses and (v) ability to manufacture products that
meet federal laws concerning Buy American and Trade Agreement Acts. In addition,
historically, prices of computer parts such as memory, processors, and computer
hard disks have decreased over time which allows the Company to increase gross
profits over the term of a contract. Since the Company selects its parts to
satisfy a specific contract, customization can be easily accomplished. The
Company believes that it is well-positioned to meet its objective of providing
responsive and high-quality performance products and services to a growing
market.
The Government, although perceived as difficult to understand and work with,
offers the educated supplier unique opportunities. The Company's management
includes experienced and highly trained federal contractors and computer
specialists. The Company believes that its management's understanding of the
subtleties of this unique market provides it with a significant advantage in the
Government arena.
4
<PAGE>
COMMERCIAL
Although the Company will continue to serve the Government market, the
Company intends to pursue and increase its commercial market penetration. In
1996, commercial customers represented 32% of the Company's revenues. The
Company believes that its products and expertise is directly applicable to the
commercial market and plans to make investments in commercial marketing and
sales. The Company believes that its "All in One" desktop computer and fault
tolerant server products are ideally suited for the commercial market. The
Company also believes that the successful marketing of these new products will
create additional sales for its existing products.
The Company will market its server products through systems software
companies that currently port applications from mainframe computers to
client/server networks. These companies offer Fortune 1000 companies a turnkey
solution to their IT problems. The Company believes that sales of its file
servers will give the Company the opportunity to sell these customers its
Desktop systems which can be utilized in the network. The Company believes that
it will also develop customer relationships that can be utilized to market other
existing products such as notebooks.
The Company also intends to market its "All in One" product to resellers
that concentrate on the legal and educational markets. The system combines a
computer, fax, stereo and television "All in One." The system has been designed
to take advantage of the recently announced Intel Pentium 200MMX processor. The
Pentium 200MMX is a multi-media CPU which is up to 20% faster than the
conventional Pentium 200.
The Company plans to develop a capability to provide commercial enterprises
with turnkey office automation computer solutions. The Company will expand its
hardware expertise to include software application solutions. It is the
Company's goal to be a total solution supplier to its customers providing client
servers, desktop workstations, network access, and application software. In
addition, it will be the Company's goal to offer complete remote help desk
support via its planned remote diagnostic and support system. The Company
believes fast changing computer technology and Internet technologies will
provide opportunities for technology solution providers. The Company intends to
design and install a turnkey system for a fixed price in the time frame required
by its customers. The Company will work closely with the client to design a
system that meets the needs of the client within its budget. All systems will be
implemented with commercial off the shelf hardware and software.
GENERAL
The Company was incorporated on January 3, 1997, in the State of Delaware,
and is the parent company of Dunn Computer Corporation, a Virginia corporation
which was incorporated on July 27, 1987. In January 1997, all of the
stockholders of the Virginia corporation exchanged their capital stock for
shares of Common Stock of the Delaware corporation. See "Certain Transactions."
The Company's principal executive offices are located at 1306 Squire Court,
Sterling, Virginia 20166 and its telephone number is (703) 450-0400. The
Company's web address is WWW.dunncomp.com.
5
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Securities Offered........... 1,000,000 shares of Common Stock. See "Description of
Securities."
Common Stock Outstanding
Prior to Offering(1)....... 4,000,000 shares of Common Stock.
Common Stock to be
Outstanding After the
Offering(1)(2)............. 5,000,000 shares of Common Stock.
Use of Proceeds.............. The net proceeds to the Company from the sale of the Shares
are estimated to be approximately $4,025,000, after
deducting commissions and expenses of the Offering estimated
at $975,000. The Company intends to use the net proceeds of
this Offering for improvements in its manufacturing
capabilities, selling and marketing, and for working capital
and general corporate purposes. See "Use of Proceeds."
Risk Factors................. An investment in the Shares is speculative and involves a
high degree of risk and should not be purchased by anyone
who cannot afford the loss of his or her entire investment.
See "Risk Factors" and "Dilution."
Proposed Nasdaq National
Market Symbol(3)........... Common Stock--DNCC
</TABLE>
- ------------------------
(1) Does not include an aggregate of 600,000 shares of Common Stock reserved for
issuance upon the exercise of options available for future grant under the
Company's stock option plan (the "Plan") 295,000 of which have been granted.
See "Management--Stock Option Plan."
(2) Does not include 100,000 shares of Common Stock issuable upon exercise of
the Underwriter's Warrants. See "Underwriting."
(3) The proposed symbol does not imply that a liquid and active market will
develop or be sustained for the securities upon completion of the Offering.
6
<PAGE>
SUMMARY FINANCIAL DATA
(In thousands, except per share data)
The summary financial information set forth below is qualified by and should
be read in conjunction with the Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER THREE MONTHS ENDED
31, JANUARY 31,
-------------------- --------------------
<S> <C> <C> <C> <C>
1995 1996 1996 1997
--------- --------- --------- ---------
STATEMENT OF INCOME DATA
Revenues.............................................................. $ 7,491 $ 18,099 $ 6,345 $ 5,505
Gross profit.......................................................... 1,445 3,996 1,529 1,306
Income from operations................................................ 479 2,024 889 872
Net income............................................................ 243 1,239 513 546
Earnings per share(1)................................................. $ .06 $ .31 $ .13 $ .13
Weighted average number of shares outstanding(1)...................... 4,050 4,050 4,050 4,100
</TABLE>
<TABLE>
<CAPTION>
AT OCTOBER 31, AT JANUARY 31,
-------------------- --------------------------
<S> <C> <C> <C> <C>
1995 1996 1997 AS ADJUSTED(2)
--------- --------- --------- ---------------
BALANCE SHEET DATA
Working capital....................................................... $ 512 $ 1,872 $ 2,428 $ 6,453
Total assets.......................................................... 3,647 5,275 5,299 9,324
Long-term debt........................................................ -- -- -- --
Total liabilities..................................................... 3,047 3,335 2,814 2,814
Stockholders' equity.................................................. 600 1,939 2,485 6,510
</TABLE>
- ------------------------
(1) Computed on the basis described in Note 2 of Notes to Dunn Computer
Corporation's consolidated financial statements included herein.
(2) Gives effect to the sale of the securities offered hereby.
7
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS, IN
ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH INVESTMENTS IN THE SHARES OF COMMON STOCK OFFERED HEREBY. THIS PROSPECTUS
CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THOSE SET FORTH BELOW AND ELSEWHERE IN THIS PROSPECTUS. AN INVESTMENT
IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
DEPENDENCE ON THE GOVERNMENT MARKET. Approximately 89% and 68% of the
Company's revenues in fiscal 1995 and 1996 were derived from contracts or
subcontracts with the Government. The Company believes that the success and
development of its business will continue to be largely dependent upon its
ability to participate in Government contract programs. Accordingly, the
Company's financial performance may be directly affected by changes in
Government contracting policies. Among the factors that could materially
adversely affect the Company's Government contracting business are budgetary
constraints, changes in fiscal policies or available funding, changes in
Government programs and requirements, including curtailment of the Government's
use of technology services firms, the adoption of new laws or regulations,
technological developments and general economic conditions. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Fiscal
1996 Compared with Fiscal 1995."
The Company derives significant revenues from sales made pursuant to certain
major procurement programs awarded in the ordinary course of business. These
include its General Services Administration Schedule ("GSA Schedule") and
related contracts. The GSA Schedule is an indefinite quantity, indefinite
delivery contract which is negotiated by the General Services Administration
with selected vendors that can be used by any Government agency to procure that
particular vendor's equipment. The Company's current GSA Schedule is a
three-year contract which may be renewed for an additional three years with the
mutual consent of the Company and the General Services Administration. The
Company's inability to renew or replace its GSA Schedule or other contracts
could have a material adverse effect on the Company. Many Government contracts
specify maximum amounts that Government clients can purchase under the contract
("total contract capacity"). Such total contract capacity is not indicative of
revenues which may be realized under the contract.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS. The Company's results of
operations have varied from quarter to quarter as a result of many factors,
including uneven purchasing patterns under its GSA Schedule and IDIQ contracts,
as well as changes in policy or budgetary measures that adversely affect
government contracts in general, the condition of the microcomputer products
Government market, shifts in demand for microcomputer products and industry
announcements of new products or upgrades. In the Company's fiscal year ended
October 31, 1996, the quarterly revenues were $6.3 million in the first quarter,
$5.1 million in the second quarter, $1.6 million in the third quarter and $5.1
million in the fourth quarter. By comparison, in the Company's fiscal year ended
October 31, 1995, 89% of the revenues were earned in the first and fourth
quarters. In the first quarter of fiscal 1997, the Company's revenues were
$5,505,000. No assurance can be given that these quarterly variations will not
occur in the future. The Company's planned operating expenditures are based on
sales forecasts. If revenues do not meet the Company's expectations in any given
quarter, it could have a material adverse effect on operating results. In
addition, the quarterly fluctuations may cause the market price of the Common
Stock to fluctuate when the Company's quarterly operating results are announced.
RELIANCE ON MANUFACTURERS AND DISTRIBUTORS. The Company acquires products
for resale both directly from manufacturers and indirectly through distributors.
During the fiscal year ended October 31, 1996 and the three months ended January
31, 1997, the Company purchased 13% and 10%, respectively of its components from
Decision Support Systems, Inc. In the event that the Company is unable to
continue to purchase certain components from Decision Support Systems, Inc. in
the future, the Company believes that alternative suppliers are readily
available without material impact to the Company's ability to fulfill its
customers' orders. The Company did not purchase more than 10% of its components
from any other
8
<PAGE>
supplier. The Company does not have supply agreements with the majority of its
suppliers. The discontinuation of a necessary component by a subcontractor or
supplier may be a significant negative development for the Company if an
appropriate alternate source can not be located. Certain of the products offered
by the Company are subject to manufacturer allocation which limits the number of
units of such products available to manufacturers, including the Company.
Certain manufacturers and distributors provide the Company with substantial
incentives in the form of discounts, and rebates. A reduction in or
discontinuance of such incentives could have a material adverse effect on the
Company.
DEPENDENCE ON CO-CONTRACTORS. In recent years, the Government has made use
of fewer, but larger-scale procurements to meet its information technology
requirements. This has led to an increase of teaming agreements among providers
of information technology services and products in order to make use of the
greater resources of such co-contractors to fulfill the requirements of the
larger procurements. The inability of the Company to enter into successful
teaming agreements with other Government contractors could materially adversely
affect the Company's ability to compete successfully for future government
procurements. In addition, approximately 0%, 18%, 0% and 5% of the Company's
total revenues in fiscal 1995 and 1996 and the three month periods ended January
31, 1996 and 1997, respectively, were derived from subcontracts with prime
contractors on Government contracts. Under these subcontracts, the Company may
be adversely affected if the prime contractor fails to perform satisfactorily or
is unable or unwilling to meet its obligations to the Company.
DEPENDENCE ON KEY PERSONNEL. The Company's future success will depend to a
significant extent on the efforts of key management personnel, including Thomas
P. Dunne, Chief Executive Officer, John D. Vazzana, Executive Vice President,
and other key personnel. The Company is in the process of entering into
employment agreements with Mr. Dunne and Mr. Vazzana. The loss of one or more of
these key employees could have a material adverse effect on the Company's
business. The Company is in the process of obtaining key-man life insurance
policies in the amount of $1,000,000 on each of the lives of Mr. Dunne and Mr.
Vazzana. In addition, the Company believes that its future success will depend
in large part upon its continued ability to attract and retain highly qualified
management, technical and sales personnel. There can be no assurance that the
Company will be able to attract and retain the qualified personnel necessary for
its business.
INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS. It is common in the computer
industry for companies to assert patent, copyright and other intellectual
property rights against other companies. Although there are no such claims
pending against the Company, if a claim were made, the Company would evaluate
such claim and, when appropriate, seek a license to use the protected technology
in its products. The Company could be placed at a disadvantage if competitors
were to obtain licenses with lower royalty fee payments or other terms more
favorable than those received by the Company. If the Company or its suppliers
were unable to obtain licenses necessary to use the protected technology in the
Company's products, the Company may be forced to market products without certain
protected technological features. The Company could also incur substantial costs
to redesign its products around other parties' protected technology or to defend
patent or copyright infringement actions against the Company. If any of the
Company's products were found to infringe protected technology, the Company
could be enjoined from further use of that technology in its products and could
be required to pay damages. The Company's inability to obtain such licenses on
competitive terms or a finding of infringement against the Company could have a
material adverse effect on the Company.
PROPRIETARY INFORMATION AND TECHNOLOGICAL CHANGE. The Company believes that
its business is dependent on its technical and organizational knowledge,
practices and procedures, and that the future success of the Company is based,
in part, on its ability to keep up to date with new technological breakthroughs
and incorporate such changes in its products and services. Also, the Company has
a proprietary interest in certain of its work products' methodologies and
know-how. Although the Company seeks to protect its proprietary information by
confidentiality agreements with its employees, there can be no assurance that
these measures will prevent the unauthorized disclosure or use of the Company's
technical knowledge, practices or procedures or that others may not
independently develop similar knowledge, practices or
9
<PAGE>
procedures. In addition, the Government acquires certain proprietary rights to
software programs and other products that result from the Company's services
under Government contracts or subcontracts. The Government may disclose such
information to third parties, including competitors of the Company. In the case
of subcontracts, the prime contractors also may have certain rights to such
programs and products. Any of these factors could reduce the Company's ability
to maximize the competitive value of its proprietary information.
GOVERNMENT CONTRACTING RISKS. Government contracts, by their terms,
generally can be terminated at any time by the Government, without cause, for
the convenience of the Government. If a Government contract is so terminated,
the Company may only be entitled to receive compensation for the services
provided or costs incurred at the time of termination and a negotiated amount of
the profit on the contract to the date of termination. In addition, all
Government contracts require compliance with various contract provisions and
procurement regulations. Certain provisions of the Company's GSA Schedule call
for long-term fixed pricing, mandatory maintenance response times, and
liquidated damages. Although the Company does not believe that such provisions
have had a negative effect on its operations to date, there can be no assurance
that such provisions will not have an adverse effect in the future. The adoption
of new or modified procurement regulations could materially adversely affect the
Company or increase its cost of competing for or performing Government
contracts. Any violation of these regulations could result in the termination of
the contracts, imposition of fines, and/or debarment from award of additional
Government contracts. The termination of any of the Company's significant
contracts or the imposition of fines, damages, or suspension from bidding on
additional contracts would have a material effect on the Company. Further, all
Government contract awards are subject to protest by competitors. See
"Business-- Government Contracts."
Upon the completion of a contract's initial term, the renewal may be
subjected to a competitive rebidding process. There can be no assurance that the
Company will win on any particular bid or prevail in any ensuing legal protest.
Furthermore, with respect to GSA Schedule and Indefinite Delivery, Indefinite
Quantity ("IDIQ") contracts, there can be no assurance that price levels will
not be reduced. The Company's failure to win a significant dollar volume of such
contracts could materially adversely affect the Company.
HIGHLY COMPETITIVE INDUSTRY. The markets for the Company's products and
services are highly competitive. Competitive pressures have intensified as the
rate of growth in the United States general computer market has slowed and
general purpose microcomputer manufacturers have attempted to enter the
Government market. The Company competes with a large number of systems
integrators, manufacturers, and resellers. Most of these competitors have
significantly more financial resources and are larger than the Company. The
Company believes that competitive factors include quality of services, technical
qualifications, past contract performance, geographic presence, price and the
availability of key professional personnel. The inability to procure new
contracts and retain existing contracts would result in a reduction of Company
revenue and could have a material adverse effect on the Company's results of
operations. In addition, because the markets for the Company's products and
services are competitive, the Company may experience downward pressure on gross
and operating profits as a percentage of revenues. The Company believes that it
is likely that these competitive conditions and the commensurate pressure on
margins will continue in the future. There can be no assurance that the Company
will continue to compete successfully against existing or new competitors that
may enter markets in which the Company operates. See "Business--Competition."
INDUSTRY CONSOLIDATION AND PRICE REDUCTIONS. The microcomputer products
Government market is undergoing significant change. Certain systems integrators
are combining operations or acquiring or merging with other integrators to
increase efficiency. This industry consolidation could result in short-term
price-cutting. Decreased prices of microcomputers and related products may
require the Company to sell a greater number of products to achieve the same
level of net revenues and gross profit. Such a trend could make it more
difficult for the Company to continue to increase its net revenues and income.
In addition, if the industry's rate of growth were to decrease further, it could
have a material adverse effect on the
10
<PAGE>
Company's operating results. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
RAPID CHANGES IN PRODUCT STANDARDS AND RISK OF INVENTORY OBSOLESCENCE. The
microcomputer products market is characterized by rapid technological change and
the frequent introduction of new products and product enhancements. The Company
has sought to minimize its inventory exposure through a variety of inventory
control procedures and policies, including automated "just-in-time" management
and vendor price protection programs. Historically, the Company has purchased
inventory to fulfill existing orders. However, in order to satisfy customer
demand, to obtain greater purchasing discounts, and to fill commercial orders,
the Company expects to carry increased inventory levels of certain products in
the future. The Company attempts to anticipate and react to new product
introductions and to mitigate its exposure to losses from inventory
obsolescence. There can be no assurance that such efforts will be successful or
that unexpected new product introductions will not have a material adverse
effect on the demand for the Company's inventory. See "Business--Purchasing."
CONTROL BY EXISTING STOCKHOLDERS. Upon the completion of this Offering, the
Company's management will collectively beneficially own 80% (77% if the
Underwriter's over-allotment option is exercised in full) of the Company's
outstanding Common Stock. Because of their beneficial stock ownership, these
stockholders will be in a position to continue to elect the members of the Board
of Directors and decide matters requiring stockholder approval. See "Principal
Stockholders."
NO PRIOR PUBLIC MARKET. Prior to this Offering, there has been no public
market for the Common Stock. Accordingly, there can be no assurance that an
active trading market will develop and be sustained upon the completion of this
Offering. The initial public Offering price of the Common Stock has been
determined by negotiations between the Company and the Underwriter. See
"Underwriting" for a discussion of the factors to be considered in determining
the initial public Offering prices. The stock market has, from time to time,
experienced extreme price and volume fluctuations which often have been
unrelated to the operating performance of particular companies. Although it has
no obligation to do so, the Underwriter intends to engage in market-making
activities or solicited brokerage activities with respect to the purchase or
sale of Common Stock in the Nasdaq National Market. However, no assurance can be
given that the Underwriter will continue to participate as a market-maker in the
securities of the Company or that other broker/dealers will make a market in
such securities which may adversely impact the liquidity of the Shares.
Regulatory developments and economic and other external factors, as well as
period-to-period fluctuations in financial results, may also have a significant
impact on the market price of such securities.
IMMEDIATE AND SUBSTANTIAL DILUTION. This Offering involves an immediate and
substantial dilution to investors. Purchasers of shares of Common Stock in the
Offering will incur an immediate dilution of $3.70 per share in the net tangible
book value of their investment from the initial public offering price, which
dilution amounts to approximately 74% of the initial public offering price per
Share. Investors in the Offering will pay $5.00 per Share, as compared with an
average cash price of $.03 per share of Common Stock paid by existing
stockholders. See "Dilution."
BROAD DISCRETION IN APPLICATION OF PROCEEDS; UNSPECIFIED
ACQUISITIONS. Approximately 75% of the net proceeds of this Offering will be
applied to working capital and general corporate purposes. In addition, the
Company may utilize a portion of the net proceeds of this Offering currently
allocated to working capital for potential acquisitions. As of the date of this
Prospectus, the Company has not identified any particular acquisition targets.
Stockholders of the Company may have no opportunity to approve specified
acquisitions or to review the financial condition of any potential target.
Accordingly, management of the Company will have broad discretion over the use
of proceeds. See "Use of Proceeds."
NEED FOR ADDITIONAL FINANCING. The Company believes that the proceeds of
the Offering will, together with revenues from operations, be sufficient to
finance the Company's working capital requirements for a period of at least 12
months following the completion of this Offering. In addition, a part of the
Company's strategy is to acquire companies with related and complementary
businesses, although the
11
<PAGE>
Company has not presently identified any specific acquisitions. The continued
expansion and operation of the Company's business beyond such 12 month period
and its ability to make acquisitions may be dependent upon its ability to obtain
additional financing. There can be no assurance that additional financing will
be available on terms acceptable to the Company, or at all. In the event that
the Company is unable to obtain such additional financing as it becomes
necessary, the Company may not be able to achieve all of its business plans. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
SHARES ELIGIBLE FOR FUTURE SALE. Of the 5,000,000 shares of Common Stock of
the Company to be outstanding upon completion of this Offering, 4,000,000 shares
shall be "restricted securities," which are owned by "affiliates" of the
Company, as those terms are defined in Rule 144 promulgated under the Act.
Absent registration under the Act, the sale of such shares is subject to Rule
144, as promulgated under the Act. All of the "restricted securities" are
eligible for resale under Rule 144. In general, under Rule 144, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company, who has beneficially owned restricted shares of Common Stock for at
least two years (which time period becomes one year commencing April 29, 1997)
is entitled to sell in a brokerage transaction, within any three-month period, a
number of shares that does not exceed the greater of 1% of the total number of
outstanding shares of the same class, or if the Common Stock is quoted on NASDAQ
or a stock exchange, the average weekly trading volume during the four calendar
weeks preceding the sale. Rule 144 also permits a person who presently is not
and who has not been an affiliate of the Company for at least three months
immediately preceding the sale and who has beneficially owned the shares of
Common Stock for at least three years (which time period becomes two years
commencing April 29, 1997) to sell such shares without regard to any of the
volume limitations as described above. All of the Company's existing
stockholders are affiliates of the Company. In addition, such affiliates have
agreed not to sell or otherwise dispose of any of their shares of Common Stock
now owned or issuable upon the exercise of currently exercisable warrants for a
period of six months from the date of its Prospectus, without the prior written
consent of the Underwriter. No prediction can be made as to the effect, if any,
that sales of shares of Common Stock or the availability of such shares for sale
will have on the market prices of the Company's securities prevailing from time
to time. The possibility that substantial amounts of Common Stock may be sold
under Rule 144 into the public market may adversely affect prevailing market
prices for the Common Stock and could impair the Company's ability to raise
capital in the future through the sale of equity securities. See "Shares
Eligible for Future Sale."
NO DIVIDENDS AND NONE ANTICIPATED. To date, no dividends have been declared
or paid on the Common Stock, and the Company does not anticipate declaring or
paying any dividends in the foreseeable future, but rather intends to reinvest
profits, if any, in its business. Investors should, therefore, be aware that it
is unlikely that any dividends will be paid on the Common Stock in the
foreseeable future. See "Dividends."
NASDAQ ELIGIBILITY AND MAINTENANCE REQUIREMENTS; POSSIBLE DELISTING OF
COMMON STOCK FROM NASDAQ NATIONAL MARKET SYSTEM; RISKS OF LOW-PRICED
STOCKS. Prior to this Offering, there has been no established public trading
market for the Company's Common Stock and there is no assurance that a public
trading market for the Company's securities will develop after the completion of
this Offering. If a trading market does in fact develop for the securities
offered hereby, there can be no assurance that it will be sustained.
The Company has been approved for listing of the Common Stock on the NASDAQ
National Market System upon the Effective Date. The Commission has approved
rules imposing criteria for listing of securities on the NASDAQ National Market
System, including standards for maintenance of such listing. In order to qualify
for initial quotation of securities on the NASDAQ National Market System, an
issuer, among other things, must have at least $4,000,000 in net tangible
assets, $3,000,000 in market value of the public float and a minimum bid price
of $5.00 per share. For continued listing, an issuer, among other things, must
have $1,000,000 in net tangible assets, $1,000,000 in market value of securities
in the public float and a minimum bid price of $1.00 per share. If the Company
is unable to satisfy the NASDAQ
12
<PAGE>
National Market System's maintenance criteria in the future, its Common Stock
may be delisted from the NASDAQ National Market System. In such event, the
Company would seek to list its Common Stock on the NASDAQ Small Capitalization
Market; however, if it was unsuccessful, trading, if any, in the Company's
Common Stock, would thereafter be conducted in the over the counter market in
the so-called "pink sheets" or the NASD's "Electronic Bulletin Board." As a
consequence of such delisting, an investor would likely find it more difficult
to dispose of, or to obtain quotations as to, the price of the Company's Common
Stock.
PENNY STOCK REGULATION. In the event that the Company is unable to satisfy
the maintenance requirements for the NASDAQ National Market and its Common Stock
falls below the minimum bid price of $5.00 per share for the initial quotation,
the Company would seek to list its securities on the NASDAQ Small Capitalization
Market. If it was unsuccessful, trading would be conducted on the "pink sheets"
or the NASD's Electronic Bulletin Board. In the absence of the Common Stock
being quoted on NASDAQ, or the Company's having a minimum of $2,000,000 in
stockholders' equity, trading in the Common Stock would be covered by Rule 15g-9
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), for non-NASDAQ and non-exchange listed securities. Under such rule,
broker-dealers who recommend such securities to persons other than established
customers and accredited investors must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement to
a transaction prior to sale. Securities are exempt from this rule if the market
price is at least $5.00 per share.
The Commission adopted regulations that generally define a penny stock to be
any equity security that has a market price of less than $5.00 per share,
subject to certain exceptions. Such exceptions include an equity security listed
on NASDAQ, and an equity security issued by an issuer that has (i) net tangible
assets of at least $2,000,000, if such issuer has been in continuous operation
for three years, (ii) net tangible assets of at least $5,000,000, if such issuer
has been in continuous operation for less than three years, or (iii) average
revenue of at least $6,000,000 for the preceding three years. Unless an
exception is available, the regulations require the delivery, prior to any
transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the risks associated therewith.
If the Company's Common Stock were to become subject to the regulations
applicable to penny stocks, the market liquidity for the Common Stock would be
severely affected, limiting the ability of broker-dealers to sell the Common
Stock and the ability of purchasers in this Offering to sell their Common Stock
in the secondary market. There is no assurance that trading in the Common Stock
will not be subject to these or other regulations that would adversely affect
the market for such securities.
PREFERRED STOCK. The Company's Certificate of Incorporation authorizes the
issuance of 2,000,000 shares of "blank check" Preferred Stock with such
designations, rights and preferences as may be determined from time to time by
its Board of Directors. Accordingly, the Company's Board of Directors is
empowered, without further approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting or other rights that could adversely affect the
voting power or other rights of the holders of the Common Stock. The Company has
no current plans to issue any shares of Preferred Stock; however, in the event
of issuance, the Preferred Stock could be used, under certain circumstances, as
a method of discouraging, delaying or preventing a change in control of the
Company. See "Description of Securities."
UNDERWRITER'S WARRANTS AND REGISTRATION RIGHTS. In connection with this
Offering, the Company has agreed to sell to the Underwriter, for $10, the
Underwriter's Warrants which entitles the Underwriter to purchase up to 100,000
shares of Common Stock. The Underwriter's Warrants are exercisable at $6.00
(120% of the Offering Price) per share of Common Stock for a period of four
years commencing one year from the date of this Prospectus. The exercise of the
Underwriter's Warrants may adversely affect the Company's ability to obtain
equity capital, and, if the Common Stock issuable upon the exercise of the
Underwriter's Warrants is sold in the public market, may adversely affect the
market price of the Common Stock. The Underwriter has been granted certain
"piggyback" and demand registration rights for a period of five years from the
date of this Prospectus with respect to the registration under the Act of the
securities directly issuable upon exercise of the Underwriter's Warrants. See
"Underwriting."
13
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Common Stock offered
hereby, after deducting underwriting discounts and commissions and other
expenses of this Offering are estimated to be $4,025,000.
The Company currently intends to utilize the net proceeds of the Offering as
follows:
<TABLE>
<S> <C> <C>
Improving manufacturing capabilities(1)................. $ 500,000 12.42%
Expansion of marketing activities(2).................... 500,000 12.42%
Working capital and general corporate purposes,
including possible acquisitions(3).................... 3,025,000 75.16%
--------- ---------
Total................................................... $4,025,000 100.00%
--------- ---------
--------- ---------
</TABLE>
- ------------------------
(1) Includes the purchase of rollers, testers and other production equipment.
The Company intends to apply for ISO 9000 certification after the Offering.
See "Business -- Facilities."
(2) Includes the cost of advertising in selected Government and commercial
publications and increased attendance at trade shows and developing a
marketing campaign aimed at the commercial market.
(3) Although the Company has not identified any definite acquisition candidate,
the Company intends to use a portion of the proceeds of the Offering to fund
acquisitions.
The foregoing represents the Company's estimate of the allocation of the net
proceeds of the Offering, based upon the current status of its operations and
anticipated business needs. It is possible, however, that the application of
funds will differ considerably from the estimates set forth herein due to
changes in the economic climate and/or the Company's planned business operations
or unanticipated complications, delays and expenses, as well as any potential
acquisitions that the Company may consummate, although no specific acquisition
has been identified. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations." Any reallocation of the net proceeds will
be at the discretion of the Board of Directors of the Company.
Pending application, the net proceeds will be invested principally in United
States government securities, short-term certificates of deposit, money market
funds or other short-term interest-bearing investments.
The Company estimates that the net proceeds from this Offering will be
sufficient to meet the Company's liquidity and working capital requirements for
a period of 12 months from the completion of this Offering. In the event that
the Company consummates any acquisition, although no specific acquisition has
been identified, such funds will be derived from the funds currently allocated
to working capital or from revenues generated from the Company's operations.
There can be no assurance that the Company will generate sufficient revenues for
such acquisitions.
DIVIDEND POLICY
The Company has never paid or declared dividends on its Common Stock. The
payment of cash dividends, if any, in the future is within the discretion of the
Board of Directors and will depend upon the Company's earnings, its capital
requirements, financial condition and other relevant factors. The Company
intends, for the foreseeable future, to retain future earnings for use in the
Company's business.
14
<PAGE>
CAPITALIZATION
The following table sets forth the actual capitalization of the Company at
January 31, 1997, and as adjusted to give effect to the sale of the 1,000,000
shares of Common Stock offered hereby and to the application of the net proceeds
therefrom, at the assumed initial public Offering price of $5.00 per share. See
"Use of Proceeds."
<TABLE>
<CAPTION>
AS OF JANUARY 31, 1997
--------------------------
<S> <C> <C>
ACTUAL AS ADJUSTED
------------ ------------
Stockholders' equity:
Preferred Stock, $.001 par value; 2,000,000 shares authorized,
no shares issued and outstanding on an actual and as adjusted
basis......................................................... $ -- $ --
Common Stock, $.001 par value; 20,000,000 shares authorized,
4,000,000(1) shares issued and outstanding on an actual basis,
5,000,000(1)(2) shares issued and outstanding on an as
adjusted basis................................................ 4,000 5,000
Additional paid-in capital...................................... 111,857 4,135,857
Retained earnings............................................... 2,369,149 2,369,149
------------ ------------
Total stockholders' equity........................................ $ 2,485,006 $ 6,510,006
------------ ------------
------------ ------------
</TABLE>
- ------------------------
(1) Does not include 600,000 shares of Common Stock reserved for issuance
pursuant to the Company's Stock Option Plan. See "Management--Incentive
Stock Option Plan."
(2) Does not include 100,000 shares of Common Stock issuable upon exercise of
the Underwriter's Warrants. See "Underwriting."
15
<PAGE>
DILUTION
At January 31, 1997 the net tangible book value of the Company was
$2,485,006 or $.62 per share of Common Stock based on 4,000,000 shares of Common
Stock outstanding. The net tangible book value per share represents the amount
of the Company's total assets less total liabilities, divided by the number of
shares of Common Stock outstanding. After giving effect to the receipt of the
net proceeds (estimated to be approximately $4,025,000) from the sale of the
shares of Common Stock offered hereby at an assumed initial public Offering
price of $5.00 per share, the proforma net tangible book value of the Company at
January 31, 1997 would be $6,510,006 or $1.30 per share of Common Stock. This
would result in dilution to the public investors (i.e. the difference between
the estimated initial public Offering price per share of Common Stock and the
net tangible book value thereof after giving effect to this Offering) of
approximately $3.70 per share. The following table illustrates the per share
dilution:
<TABLE>
<CAPTION>
PER SHARE OF
COMMON STOCK
--------------------
<S> <C> <C>
Assumed initial public Offering price........................................... $ 5.00
Net tangible book value at January 31, 1997................................... .62
Increase in proforma net tangible book value attributable to new investors.... .68
--
Proforma net tangible book value after this Offering............................ 1.30
---------
Proforma dilution of net tangible book value to the new investors............... $ 3.70
---------
---------
</TABLE>
The following table sets forth as of January 31, 1997, with respect to the
Company's existing stockholders and investors in this Offering, the number of
shares of Common Stock acquired from the Company, the percentage of ownership of
such shares of Common Stock, the total consideration paid, the percentage of
total consideration paid, and the average price per share paid by the existing
stockholders and by the investors in this Offering:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------------- ------------------------- AVERAGE PRICE
NUMBER PERCENT NUMBER PERCENT PER SHARE
---------- ----------- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C>
Existing stockholders............ 4,000,000 80% $ 115,857 2.3% $ .03
New investors.................... 1,000,000 20% 5,000,000 97.7% 5.00
---------- --- ------------ -----
Total...................... 5,000,000 100% $ 5,115,857 100.0% $ 1.02
---------- --- ------------ ----- -----
---------- --- ------------ ----- -----
</TABLE>
16
<PAGE>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The following selected financial data should be read in conjunction with the
consolidated financial statements and the notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere herein. The statement of income data set forth below with
respect to the fiscal years ended October 31, 1995 and 1996 and the balance
sheet data as of October 31, 1996 is derived from and is referenced to the
audited consolidated financial statements of the Company included elsewhere in
this Prospectus. The statement of income data set forth below with respect to
the fiscal years ended October 31, 1993 and 1994 and the balance sheet data as
of October 31, 1993, 1994 and 1995 is derived from audited consolidated
financial statements of the Company not included in this Prospectus. The
statement of income data set forth below with respect to the fiscal year ended
October 31, 1992 and the balance sheet data as of October 31, 1992 is derived
from unaudited consolidated financial statements of the Company not included in
this Prospectus. In the opinion of management, the unaudited consolidated
financial statements include all adjustments, consisting of normal recurring
adjustments, that the Company considers necessary for the fair presentation of
its financial position and results of its operations for that period. In the
opinion of the Company's management, the interim financial data reflect all
adjustments necessary to present fairly the results of operations for the three
months ended January 31, 1996 and 1997 and the Company's financial position at
January 31, 1997. These adjustments are of a normal, recurring nature. The
results of operations of the interim periods are not necessarily indicative of
results that may be expected for a year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED OCTOBER 31, JANUARY 31,
----------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues.................................... $ 2,544 $ 5,812 $ 4,429 $ 7,491 $ 18,099 $ 6,345 $ 5,505
Costs of revenues........................... 2,088 4,858 3,444 6,046 14,103 4,816 4,199
--------- --------- --------- --------- --------- --------- ---------
Gross profit................................ 456 954 985 1,445 3,996 1,529 1,306
Selling, general and administrative......... 349 761 1,005 966 1,972 640 434
--------- --------- --------- --------- --------- --------- ---------
Income from operations...................... 107 193 (20) 479 2,024 889 872
Other income (expense)...................... (1) (1) (32) 8 (9) (55) 8
--------- --------- --------- --------- --------- --------- ---------
Net income (loss) before income taxes....... 106 192 (52) 487 2,015 834 880
Provision for income taxes.................. 35 65 (11) 244 776 321 334
--------- --------- --------- --------- --------- --------- ---------
Net income (loss)........................... $ 71 $ 127 $ (41) $ 243 $ 1,239 $ 513 $ 546
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Earnings (loss) per share(1)................ $ .03 $ .04 $ (.01) $ .06 $ .31 $ .13 $ .13
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Weighted average number of shares
outstanding(1)............................ 2,850 2,850 3,209 4,050 4,050 4,050 4,100
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
AT JANUARY
AT OCTOBER 31, 31,
----------------------------------------------------- -------------
1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital....................................... $ 187 $ 351 $ 340 $ 512 $ 1,872 $ 2,428
Total assets.......................................... 1,058 1,149 2,503 3,647 5,275 5,299
Long-term debt........................................ 57 75 23 -- -- --
Total liabilities..................................... 797 804 2,046 3,047 3,335 2,814
Stockholders' equity.................................. 261 345 457 600 1,939 2,485
</TABLE>
- ------------------------
(1) Computed on the basis described in Note 2 of Notes to Dunn Computer
Corporation's consolidated financial statements included herein.
17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company has been in operation since July 1987. The Company manufactures
custom computer systems which are marketed primarily to the Government and
selected commercial accounts. The Company secures its contracts by bidding
directly as a prime contractor in response to Government "Request for Proposals"
("RFPs") or as a sub-contractor with other federal contractors. The Government
is budgeted to spend over $26 billion on IT products and services in 1997. The
Company plans to expand its operations by acquiring other companies. Although
specific acquisition candidates have not been identified, the Company expects
that a portion of any acquisition price will be paid with shares of the
Company's Common Stock, and a portion may be paid with the proceeds of this
Offering. The Company believes that it will be better able to do this when its
Common Stock is publicly traded. The Company's strategy is to become a leading
supplier of IT to the Government. Below is a common-size income statement for
the Company for the years ended October 31, 1992, 1993, 1994, 1995 and 1996 and
for the three months ended January 31, 1996 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED OCTOBER 31, JANUARY 31,
----------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues..................................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Costs of revenues............................ 82.06% 83.58% 77.76% 80.71% 77.92% 75.91% 76.28%
--------- --------- --------- --------- --------- --------- ---------
Gross profit................................. 17.94% 16.42% 22.24% 19.29% 22.08% 24.09% 23.72%
Selling, general and administrative.......... 13.71% 13.09% 22.69% 12.90% 10.90% 10.08% 7.88%
--------- --------- --------- --------- --------- --------- ---------
Income from operations....................... 4.23% 3.33% -0.45% 6.39% 11.18% 14.01% 15.84%
Other income (expense)....................... -0.05% -0.02% -0.72% 0.11% -0.05% -0.86% 0.14%
Net income (loss) before income taxes........ 4.18% 3.31% -1.17% 6.50% 11.13% 13.15% 15.98%
Provision for income taxes................... 1.38% 1.12% 0.24% 3.26% 4.28% 5.06% 6.07%
--------- --------- --------- --------- --------- --------- ---------
Net income................................... 2.80% 2.19% -0.93% 3.24% 6.85% 8.09% 9.91%
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 1997 COMPARED TO THREE MONTHS ENDED JANUARY 31,
1996
Revenues for the quarter ended January 31, 1997 were $5,505,350 as compared
to $6,344,973 for the quarter ended January 31, 1996, a 13.2% decline. In the
first quarter of fiscal 1996, the Company earned an aggregate of approximately
$3.3 million from two new contracts. The Company did not anticipate or receive
any revenue in fiscal 1997 from either of the contracts. The loss of revenues
from these contracts was partially offset by revenues of approximately $2.7
million from increased sales under its GSA and US Courts contracts.
Gross profit for the fiscal 1997 first quarter was 23.72% compared to 24.09%
for the first quarter of 1996.
Selling and marketing expenses increased $101,193 in 1997. As a percentage
of revenues, selling and marketing expenses increased from 1.27% to 3.3%. The
increase reflects the costs of additional personnel and marketing expenses. The
Company expects this modest increase to continue, especially as it expands its
marketing efforts to the commercial market.
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General and administrative expenses declined by $307,294 from $559,413 to
$252,119. General and administrative expenses represented 8.82% of revenues in
the first quarter of Fiscal 1996 as compared to 4.58% in the same period of
fiscal 1997. The reduction in such expenses can be attributed to a reduction of
incentive compensation to the senior management of the Company. Under the
employment contracts which will take effect on the Effective Date, fiscal 1997
incentive compensation will not be as high as it was in fiscal 1996.
As a percentage of selling, general and administrative expenses, executive
compensation represented 67.5% and 27.7% for the three month period ended
January 31, 1996 and the three month period ended January 31, 1997,
respectively.
Income from operations declined $16,753 in the first quarter of 1997 when
compared to the first quarter of 1996. As a percentage of revenues, income from
operations increased from 14.01% to 15.84%. The dollar decline is attributable
to the decline in revenues. The increased percentage is a result of the changes
in the general and administrative expenses.
Interest expense for the first quarter of 1997 was $0 as compared to $57,227
in 1996. Other income increased $4,828 in 1997. The reduction in interest
expense and the increase in other income are both as a result of the Company's
cash position.
Income tax expenses as a percentage of taxable income decreased from 38.50%
for 1996 to 38% for 1997. Tax expense increased by $12,700 because of the
increase in taxable income. Income tax as a percentage of revenue increased from
5.06% to 6.07% because while total revenue declined income before income taxes
increased.
As a result, the Company's net income increased from $513,213 in the first
quarter of fiscal 1996 to $545,815 in the first quarter of 1997. Net income as a
percentage of revenues increased from 8.09% of revenues to 9.91% of revenues.
FISCAL YEAR ENDED OCTOBER 31, 1996 COMPARED TO FISCAL YEAR ENDED OCTOBER 31,
1995
Revenues for fiscal 1996 were $18,098,638, a 141.6% increase over 1995
revenues of $7,491,452. This increase is due to four significant new contracts.
See "Business--Market." Three of the contracts are with commercial companies
that sell to the US Government. Revenues in fiscal 1996 from these four
contracts were $1,588,000, $2,883,000, $3,074,000, and $2,412,000 respectively.
Revenues in fiscal 1996 also increased from the Company's existing contract with
the US Courts.
Gross profit for fiscal 1996 was 22.1% of revenues compared to 19.3% in
fiscal 1995. The improvement can be attributed to increased volume discounts for
material and a reduction in warranty expense. Warranty expense decreased because
of a reduction in the failure rate and more efficient movement of replacement
parts. Management believes this trend will continue because of the quality of
the components used in the Company's systems. Gross profit increased
approximately $2,551,224 as a result of increased revenues.
Selling and marketing expenses increased $321,361 in fiscal 1996 over 1995.
As a percentage of revenues, selling and marketing expenses increased from 2.1%
to 2.6%. The increase is attributable to increased personnel and advertising.
Future increases in selling and marketing expenses are expected as the Company
implements its marketing strategy.
General and administrative expenses increased $684,933 from fiscal 1995 to
1996. The increase is a result of increased personnel cost necessitated by the
expansion of the Company's business. General and administrative expenses as a
percentage of revenues declined from 10.8% to 8.3% because certain personnel and
associated costs did not increase at the same rate as revenues.
19
<PAGE>
As a percentage of selling, general and administrative expenses, executive
compensation represented 49.7% and 52.2% for the year ended October 31, 1995 and
the year ended October 31, 1996, respectively.
Income from operations increased to $2,023,746 in 1996 compared to $478,816
in 1995, an increase of 322.7%. As a percentage of revenues, income from
operations increased to 11.2% in 1996 from 6.4% in fiscal 1995. The increase in
income from operations primarily resulted from increased sales volume and gross
profit margins and declining general and administrative expenses as a percentage
of revenues.
Interest expense increased $31,679 in fiscal 1996 from $26,246 to $57,925.
Interest expense increased because of the requirement for additional working
capital created by the increase in sales during the first six months of fiscal
1996. As a percentage of revenues in fiscal 1996, interest expense was .3%.
Other income (principally interest income) increased from $34,512 in fiscal 1995
to $49,343 in fiscal 1996.
Income tax expense increased from $244,000 to $776,000 due to the increase
in net income. Income taxes as a percentage of revenues increased from 3.26% in
fiscal 1995 to 4.28% in fiscal 1996. The percentage increase was caused by
improvement in the Company's profit margins and a reduction in selling, general
and administrative expenses as a percentage of revenues.
As a result, the Company's net income grew by 409.8% to $1,239,164 in fiscal
1996 when compared to $243,082 in 1995. Net income as a percentage of sales was
6.8% in 1996 and 3.2% in 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically met its cash flows needs through cash generated
by operations and its bank credit arrangement.
The Company has generated positive cash flows in each of the last two fiscal
years and in the quarter ended January 31, 1997. In 1995, the Company had a
positive cash flow of $205,753 from operations. The principal source of cash was
from net income of $243,082, an increase in accounts payable and accrued
expenses of $962,335, and an increase in income taxes payable of $223,582. Net
income increased principally because of increased revenues. Payables and accrued
expenses increased because of the increased volume of business. Income taxes
payable increased because of the timing difference between recognizing the
expense and paying income taxes. The principal use of cash was the increase of
accounts receivable of $734,660 and the increase in inventory of $515,426.
Accounts receivable increased because of the increase in volume of business.
Inventory increased because of the increase in volume and the purchase of
inventory required to fill orders early in fiscal 1996. Cash flow from investing
activities was reduced by $15,617 as a result of the purchase of capital
equipment, approximately $12,000 was spent on production equipment and $3,000
was spent on leasehold improvements. Financing activities reduced cash flow an
additional $162,271, $194,809 was used to reduce bank debt and $32,538 was
generated by the repayment of a loan by an officer and director of the Company,
which loan bore no interest. See "Certain Transactions." Net cash flow generated
after all activities was $27,865.
In 1996, the Company had positive cash flows of $1,081,977 from operations.
The principal sources of cash were net income of $1,239,164, an increase in
payables and accrued expenses of $278,552, a decrease in inventory of $211,763,
and an increase in income taxes payable of $260,947. The reasons for the
increase in net income are discussed in Results of Operations--Fiscal year ended
October 31, 1996 and October 31, 1995. Payables increased because of the
increase in volume. Income taxes payable increased because of the timing
difference between recognizing the expense and paying income taxes. Inventory
declined because the Company's inventory position was unusually high the
previous year. The principal use of cash was the increase in accounts receivable
of $951,553. The increase was caused by the increase in sales volume. In fiscal
1995, the Company turned its receivables 4.1 times as compared to 6.7 times in
fiscal 1996. The Company used $171,040 of its investing cash flow, to purchase
$21,040 of capital equipment, which consisted of $18,000 for a new phone system
and $3,040 for miscellaneous leasehold improvements and production equipment. In
addition, the Company made a stock investment of $150,000 in WIZnet, an
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Internet related company. See "Certain Transactions." The Company intends to
utilize approximately $500,000 of the proceeds of this Offering to improve its
manufacturing capabilities, including the purchase of rollers, testers and other
production equipment. The Company also utilized a net of $152,231 in financing
activities. In addition, the Company repaid $252,231 of outstanding bank debt
and received a payment of $100,000 from an officer and director of the Company
for the payment of Common Stock. See "Certain Transactions." When reflecting all
transactions, the Company had a net increase in cash and cash equivalent of
$758,726.
In the first quarter of fiscal 1997, the Company generated $1,385,346 from
operating activities. Cash was provided principally by the reduction of accounts
receivable of $1,782,772 and net income of $545,815. Cash was utilized
principally to increase inventory by $339,822 and decrease accounts payable and
income taxes payable by $344,813 and $136,150, respectively. The Company had no
investing activities during the first quarter of fiscal 1997.
In April 1996, the Company entered into a secured revolving credit
arrangement with Signet Bank in Falls Church, Virginia (the "Bank") for a credit
line of up to $2,000,000 that is due on demand and bears interest at prime plus
3/4%. All borrowings are collateralized by the assets of the Company. In
addition, the Company's principal stockholders have personally guaranteed the
bank line of credit. Under the line of credit, the Company is required to
maintain a net worth of $1,250,000. In December 1996, the Company drew down
$200,000 from its line of credit for working capital. The Company repaid such
amount in January 1997 and as of the date hereof has no outstanding borrowings
under this line. The Company intends to maintain this arrangement with the Bank
or a similar agreement with another Bank.
The Company is guarantor on $1,000,000 of mortgage debt for a partnership
owned and controlled by the President and Vice-President of the Company. The
mortgage debt is for the facilities currently occupied by the Company. See
"Certain Transactions."
The Company has, and continues to have, a dependence upon a few major
customers for a significant portion of its revenues. This dependence for
revenues has not been responsible for any unusual fluctuations in operating
results on an annual basis in the past. Management does not believe this
concentration will generate annual fluctuations in operating results in the
future. Orders from these customers can create significant fluctuations from
quarter to quarter. In fiscal 1995, 85% of the Company's revenue was derived
from two customers. In fiscal 1996, approximately 77% of its revenue was derived
from five customers. In addition, approximately 18% of fiscal 1996 revenues and
5% of the first quarter of fiscal 1997 revenues were derived from sub contracts
with prime contractors on Government contracts. Management intends to continue
its efforts to expand the customer base so that the loss of any one customer
would not have a material effect on the Company's operations.
The General Services Administration contract has had a significant effect on
the Company's business, representing in excess of $3,300,000 in orders. The
Company expects that this contract will generate significant revenues in 1997
and beyond. The current contract expires in March 1999. In addition to the GSA
Schedule, the Company has contracts with Lockheed, the U.S. Federal Courts, the
Health Care Finance Administration and the Social Security Administration.
The Lockheed contract is to provide computer network servers for the
Worldwide Defense Messaging System. Lockheed is the prime contractor on the DMS
contract, which is a five year contract with an initial value of approximately
$1.5 billion. The Company generated revenues of $3,074,000 in fiscal 1996 from
the Lockheed contract. This was the Company's largest single source of revenue
in fiscal 1996, accounting for approximately 17% of the Company's revenues. The
contract is a year to year contract that can be renewed for up to five years.
The contract was recently renewed. The Company anticipates, although there can
be no assurance, that revenues from this contract for fiscal 1997 and beyond
will be significant.
The contract with the U.S. Federal Courts is to provide microprocessor based
microcomputer systems and components, operating system software as well as other
peripheral devices and interfaces. The initial
21
<PAGE>
value on the contract was in excess of $15 million. To date, the Company has
generated revenues of approximately $6,300,000. The Company's contract with the
U.S. Federal Courts terminates in September 1998. The Company expects to
generate significant revenues from the U.S. Court's contract in fiscal 1997 and
1998.
The contract with HCFA is to provide state-of-the art microcomputer
workstations, peripherals, software, maintenance and support services. There was
no initial value given to the contract because it is an indefinite
quantity/indefinite delivery contract. To date, the Company has generated
revenues of approximately $11,100,000. The Company's contract with HCFA
terminates in September 1997. The Company expects to generate significant
revenues from the HCFA contract in fiscal 1997.
In March 1997, the Company entered into a contract with the Social Security
Administration (the "SSA") to provide Multimedia workstations, as well as other
peripheral devices and interfaces. As part of the agreement, SSA placed an order
for approximately $1.6 million of goods from the GSA Schedule which the Company
intends to deliver within 30 days. The anticipated value of the contract is
approximately $6.4 million, although there are no minimum or maximum purchase
requirements. The Company's contract with the SSA terminates in March 1999. The
Company expects to generate significant revenues from the SSA contract in fiscal
1997 and 1998.
The Company will receive net proceeds of this Offering in an amount
estimated to be approximately $4,025,000 (or approximately 80% of the estimated
gross proceeds of $5,000,000 to be received before payment of applicable
underwriting discounts and commissions and certain other expenses of the
Offering). The Company believes that the proceeds of the Offering coupled with
income from operations will fulfill the Company's working capital needs for at
least 12 months following the Offering. As the Company continues to grow, bank
borrowings, other debt placements and equity offerings may be considered, in
part or in combination, as the situation warrants.
A vendor of the Company has filed a lawsuit against the Company concerning a
disputed payable in the amount of $124,200. While the ultimate outcome of these
matters is not known, the Company intends to vigorously dispute the claim. The
Company believes it has made an adequate provision for this claim in the
consolidated financial statements as of October 31, 1996 which are included
elsewhere in this Prospectus.
RECENT PRONOUNCEMENTS
In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation" which is effective for the
Company's 1997 consolidated financial statements. SFAS No. 123 allows companies
to account for stock-based compensation under either the new provisions of SFAS
123 or the provisions of APB No. 25, but requires pro forma disclosure in the
footnotes to the consolidated financial statements as if the measurement
provisions of SFAS No. 123 had been adopted. At this time, the Company intends
to account for its stock based compensation in accordance with the provisions of
APB No. 25. As such, the implementation of SFAS No. 123 will not materially
impact the financial position or results of operations of the Company.
The Company has adopted the provisions of SFAS 121. The adoption of SFAS 121
has had no material effect on the financial statements of the Company.
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BUSINESS
GENERAL
Dunn Computer Corporation ("Dunn" or the "Company") manufactures custom
computer systems for the Government and selected commercial accounts. Dunn
markets its products directly to the Government as a prime contractor or
indirectly as a sub-contractor to other federal contractors. The Company
supplies systems under its own label as well as the customer's brand name. The
Company's products include Intel based computer systems configured to meet
customer specifications, private label systems, notebook computers and high
performance network client servers. The Company also provides related services
to its customers, including integration and staging services, configuration
control, upgrading existing systems and world-wide warranty support.
MARKET
GOVERNMENT
The Company markets to a wide array of Government organizations including
the Department of Defense, civilian agencies including the Health Care Finance
Administration ("HCFA") and the Judicial branch of the Government. The
Government alone represents 13% of U.S. spending on IT. The Office of Management
and Budget ("OMB") submitted to Congress in January 1997, a Government
Information Technology ("IT") budget of $26 billion. In addition, the Electronic
Industries Association, a major industry trade association, estimates that
Government agencies that are not required to report their information technology
expenditures, including the intelligence community, will spend an additional $20
billion in the Government's fiscal 1997 on such technology. The Company believes
that while the Government down sizing has decreased the number of federal
employees, there has been a corresponding increase in the demand for
productivity tools, such as computers. In fact, President Clinton's recently
submitted budget provides for a slight increase in IT spending in the upcoming
year.
Driving the growth in spending is the ongoing migration to an "electronic
government" called for in the National Performance Review. This trend has
necessitated closer federal, state, and local IT relationships to deliver
state-of-the art "service to the citizen" in the social services, safety,
transportation, environment and tax areas, while still accomplishing the
Government's goal to adopt computer networking technology to interconnect
personal computers into resource-sharing work groups referred to as "local area
networks." In order to perform these tasks, the Government is moving away from
centralized data processing. Instead, more micros, workstations and networks are
being bought to increase efficiency and improve productivity at every level.
Mid-level managers, such as functional managers and departmental specifiers,
have now been empowered to buy a specific vendor's technology.
Congress recently passed the Information Technology Reform Act (the "ITRA")
which took effect on August 8, 1996. The ITRA will have a profound effect on the
way Government procures computers and related products and services in the
future. The changes were made in an effort to reduce costs and expedite the IT
procurement process. The most sweeping changes were (1) the repeal of the Brooks
Act which had given the General Services Administration ("GSA") sole authority
for purchasing IT and, (2) the change in the GSA schedule from a single year
small purchase contracting program to a multi-year, Indefinite Delivery,
Indefinite Quantity ("IDIQ") contract with no limit on the value of purchases.
Prior to the new legislation, the GSA was responsible for overseeing all IT
purchases as well as assuring fair and open competition. The new legislation has
reduced GSA's role to negotiating and awarding GSA contracts to qualified IT
vendors. GSA is paid a 1% commission on contract revenues for providing this
service. The commission is paid by the vendor.
Although the legislation changes may seem minor or merely a technical
adjustment to those not familiar with IT procurement by the Government, the
Company believes that the new law will have far reaching effects in the
procurement process. The Company was awarded a new GSA contract that is valid
through March 31, 1999. The new GSA schedule will provide the Company a
procurement contract vehicle to market its products to the Government. In the
past, the Company was forced to market only through the very competitive
"Request for Proposals" ("RFP") process. IT purchases can now be directed to a
particular vendor or the competition can be limited to selected vendors holding
GSA contracts. The Company believes that its classification as a small business
(under 1000 employees) is an added advantage
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when pursuing Government contracts. The Government in many cases will give
preferential treatment or limit competition to small businesses. Since being
awarded the contract in April 1996, the Company has received GSA contract orders
totaling over $3,300,000. For the previous three years, ending March 31, 1996,
the Company had received less than an aggregate of $5,000 in GSA schedule
orders. The Company believes the GSA schedules to be an important part of its
sales and marketing strategy in the upcoming years. It should also be noted that
many states are in the process of allowing for the procurement of IT products
and services from the Federal GSA schedule. The Company plans to make
investments to expand its marketing and sales efforts to take advantage of these
changes in the federal market as well as the state market. See "Use of
Proceeds."
In addition to the GSA schedule, the Company has contracts with Lockheed,
the U.S. Federal Courts, the Health Care Finance Administration and the Social
Security Administration.
The Lockheed contract is to provide computer network servers for the
Worldwide Defense Messaging System. Lockheed is the prime contractor on the DMS
contract, which is a five year contract with an initial value of approximately
$1.5 billion. The Company generated revenues of $3,074,000 in fiscal 1996 from
the Lockheed contract. This was the Company's largest single source of revenue
in fiscal 1996, accounting for approximately 17% of the Company's revenues. The
contract is a year to year contract that can be renewed for up to five years.
The contract was recently renewed. The Company anticipates, although there can
be no assurance, that revenues from this contract for fiscal 1997 and beyond
will be significant.
The contract with the U.S. Federal Courts is to provide microprocessor based
microcomputer systems and components, operating system software as well as other
peripheral devices and interfaces. The initial value on the contract was in
excess of $15 million. To date, the Company has generated revenues of
approximately $6,300,000. The Company's contract with the U.S. Federal Courts
terminates in September 1998. The Company expects to generate significant
revenues from the U.S. Court's contract in fiscal 1997 and 1998.
The contract with HCFA is to provide state-of-the art microcomputer
workstations, peripherals, software, maintenance and support services. There was
no initial value given to the contract because it is an indefinite
quantity/indefinite delivery contract. To date, the Company has generated
revenues of approximately $11,100,000. The Company's contract with HCFA
terminates in September 1997. The Company expects to generate significant
revenues from the HCFA contract in fiscal 1997.
In March 1997, the Company entered into a contract with the Social Security
Administration (the "SSA") to provide Multimedia workstations, as well as other
peripheral devices and interfaces. As part of the agreement, SSA placed an order
for approxiamtely $1.6 million of goods from the GSA Schedule which the Company
intends to deliver within 30 days. The anticipated value of the contract is
approximately $6.4 million, although there are no minimum or maximum purchase
requirements. The Company's contract with the SSA terminates in March 1999. The
Company expects to generate significant revenues from the SSA contract in fiscal
1997 and 1998.
Washington, DC, Maryland, and Virginia accounted for 68% of the Government's
IT spending in fiscal year 1995. The Company believes that its location within
this area of concentration provides it with an advantage over its competitors in
securing Government contracts. The Company also believes that it is able to
realize significant cost savings due to its location.
COMMERCIAL MARKET
Although the Company will continue to serve its Government market, the
Company intends to increase its penetration of the commercial market. In 1996,
commercial customers represented 32% of the Company's revenues. The Company
believes that its "All in One" desktop computer and fault tolerant server
products are ideally suited to the commercial market. The Company also believes
that the successful marketing of these new products will create additional sales
for its existing products.
The Company intends to market its new line of server products through
systems software companies that currently port applications from mainframe
computers to client/server networks. These companies offer Fortune 1000
companies a turn key solution to their IT problems. The Company believes that
sales of its file servers will give the Company the opportunity to sell these
customers its Desktop systems which can
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be utilized in the network. The Company believes that it will also develop
customer relationships that can be utilized to market other existing products
such as its notebook computers.
The Company also intends to market its "All in One" product to resellers
that concentrate in the legal and educational markets. The system combines a
computer, fax, stereo and television "All in One". The system has been designed
to take advantage of the recently announced Intel Pentium 200MMX processor. The
Pentium 200MMX is a multi-media CPU which is up to 20% faster than the
conventional Pentium 200.
PRODUCTS
The Company manufactures and assembles a full line of Intel based desktop
personal computers, client servers, and notebook computers. The Company has
entered into the high end fileserver and notebook markets. The Company recently
introduced a line of high end fileservers based on the newest Pentium Pro
processors and a high end Pentium notebook computer. The Company believes,
although there can be no assurance, that these two product lines will be two of
the fastest growing areas in the marketplace during the next three years.
DESKTOPS
The Company manufacturers a high performance line of Pentium desktop
personal computers that are used as standalone and/or network computers. The
systems incorporate the newest Intel technology and can accommodate all the
Intel Pentium processors. The Company's desktops have been tested against
leading national competitors such as Dell Computer and Digital Equipment by
several computer publications, including Federal Computer Week. In August 1996
the Company received the "BEST BUY" award by Federal Computer Week as the
"fastest Pentium ever tested". The award was based on performance, price, and
support. The Company strives to keep ahead of the competition by constantly
testing and incorporating the latest technology into its products.
The Company is presently marketing an "all in one" desktop computer that
incorporates a 17" monitor, stereo speakers, microphone, Internet connection,
television tuner, and full Pentium computer. The system is packaged in a single
chassis with all the computer parts in a removable drawer for ease of upgrade
and maintenance. The Company believes that initial reaction to the "All in One"
has been very positive. The Company further believes that the "all in one"
product will have applications in the Government and commercial market. The
Company is currently developing its "All in One" marketing strategy to appeal to
both the Government and the private markets. To date, the Company has not had
significant sales of the "All in One."
FILESERVERS
The Company has entered the lucrative high end file server market by
introducing a custom line of fault tolerant fileservers based on Intel Pentium
Pro (P6) Processors. The Company markets a single, dual and quad version of the
processors. All of such processors are Microsoft Windows NT, Novell, Banyan, and
Token Ring compatible. The new servers will offer the latest in technology which
the Company believes will provide it with a significant price/performance
advantage over its competitors, such as Hewlett Packard ("HP") and Compaq. The
Company believes that Compaq and HP are realizing significant margins in the
server market. The Company is presently providing servers as a subcontractor for
Lockheed on the multi-billion dollar worldwide Defense Messaging System ("DMS").
DMS is intended to be the largest private messaging network in the world
supporting approximately 2,000,000 users.
NOTEBOOKS
The Company manufacturers, on a brand name basis, a state-of-the-art
notebook with a 12.1" active matrix screen, 8 speed CD-Rom, built-in stereo
sound, infrared communication, and many other advanced features. The system is
assembled and configured in the United States by Dunn and meets the Federal
Governments stringent Buy American and Trade Agreements Act requirements. The
Company plans to market the Notebook product in both the commercial and
Government markets.
25
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STRATEGY
GOVERNMENT
The Company is an experienced Government contractor with significant
proposal and program management expertise. The Company primarily pursues
Government business by targeting two types of contracts, Indefinite Delivery and
Indefinite Quantity (IDIQ), and GSA Schedule business contracts. The Company has
determined that the Government market offers unique and significant
opportunities for a custom computer manufacturer. Acting as a prime or
subcontractor allows the Company to utilize its core expertise in Government
contracting and custom assembly manufacturing. The Company believes that it has
the ability to quickly react to the product requirements and the terms and
conditions of the Government contracts. By aggressively targeting the Government
market, primarily concentrating on the Company believes that it has certain
business advantages over mass market manufacturers such as Dell, Compaq,
Gateway, IBM, etc. which generally design and manufacture standard systems
targeted at a broader market while the Company designs and manufactures systems
specifically in response to Government requirements.
The Company anticipates, although there can be no assurance, that the
Government IT market will continue to grow even as the Government down sizes.
The Company's client/server products, although custom configured, are used in
everyday office tasks as productivity tools. The Government is on its third
generation of personal computers and is a well educated user of technology. In
many ways, the Government leads industry in the adaptation and use of modern
technology tools such as personal computers. Based upon its general knowledge of
the computer industry, the Company believes that the Government typically
upgrades its information technology every two to three years.
The Government, although perceived as difficult to understand and work with,
offers the educated supplier unique opportunities. The Company's management
includes experienced and highly trained federal contractors and computer
specialists. The Company believes that its management's understanding of the
subtleties of this unique market provides the Company with a significant
advantage in penetrating and making profits in the Government arena.
By historically focusing primarily on the Government market while offering a
wide variety of horizontal computer applications, management believes the
Company has benefitted from the following advantages:
SIGNIFICANT INVENTORY RISK IS ELIMINATED BECAUSE INVENTORY IS PROCURED
TO SATISFY FIRM FIXED PRICE CONTRACTS. The computer industry's volatile
inventory such as memory and processors are purchased to satisfy specific
contract requirements. Competitors like Compaq and IBM generally purchase or
commit to inventory significantly in advance to meet its forecasted or
historical requirements.
THE COMPANY'S PRODUCTS ARE BUILT TO CONTRACT ORDER ALLOWING THE COMPANY
TO TAKE ADVANTAGE OF THE LATEST IN TECHNOLOGY AND MARKET PRICES. Typically,
the Government requires delivery 30 days after ordering which allows the
Company to purchase the latest technology at the then prevailing prices
while not incurring any extra expenses for ordering the technology on a rush
basis. The Company believes that, by purchasing the latest technology, it is
able to offer the "best of the breed" products.
RECEIVABLE COLLECTIONS AND BAD DEBT ARE SIGNIFICANTLY REDUCED DUE TO THE
STABILITY OF THE GOVERNMENT. The Government is a reliable payer who by law
(Prompt Payment Act) must pay interest to suppliers after 30 days. In the 9
years the Company has been in business, it has not experienced a bad debt
from the Government.
LESS MARKETING EXPENSES DUE TO CONSOLIDATED MARKET. Although the
Company intends to increase its marketing efforts after the Offering, the
Company, as compared with its competitors, can allocate less advertising
dollars to reach its buyers. Print advertising in the two main IT
periodicals will reach nearly 100% of the Government market. Travel is
greatly reduced because the Company's headquarters are located in the
Washington DC area.
CUSTOMIZATION OF PRODUCTS CAN BE ACCOMPLISHED EASILY BECAUSE PRODUCTS
ARE PURCHASED TO SATISFY A SPECIFIC CONTRACT. The Company's parts are
selected specifically with customization, upgrade, and
26
<PAGE>
serviceability goals. The Company's systems which are configured for the
Government, unlike most competitors' systems, are intentionally not designed
for the mass market but rather for ease of modification, upgrade and repair.
Further, in the event that the Company develops an improved product or
wishes to change the price of one or several of its products, the GSA
Schedule has a built in mechanism which allows the Company to amend the
contract several times per year.
HISTORICAL PRICE DECREASES IN COMPUTER PARTS, SUCH AS MEMORY,
PROCESSORS, AND COMPUTER HARD DISKS ALLOW THE COMPANY TO INCREASE PROFIT
MARGINS OVER THE LIFE OF THE CONTRACT. During the life of a contract, the
Company has the opportunity to modify the contract with the latest
technology offering the Government lower prices and more power while
increasing profit margins. Although the Government uses multi-year fixed
price contracts, it is impossible to predict future technology changes and
pricing. Therefore the Government normally puts a "technology enhancement or
refresh clause" in all computer contracts. The clause encourages suppliers
to keep the contract refreshed with the latest technology.
COMMERCIAL
In 1996, commercial customers represented 32% of the Company's revenues. The
Company intends to initially focus its expansion on sales of its "All in One"
desktop computer and fault tolerant server products which it believes are
ideally suited to the commercial market. The Company believes that it can market
many of its other products to purchasers of its "All in One" and fault tolerant
server products.
The Company's strategy is to provide commercial enterprises with turnkey
office automation computer solutions. The Company believes that by offering
customers a turnkey system for a fixed price in a specific time frame it can
differentiate itself from its competitors and increase its penetration of the
commercial market. The Company intends to devote a portion of its marketing
resources to the commercial market. See "Use of Proceeds."
MARKETING AND SALES
The Company uses an in-house sales force and program managers to market its
products and services. Although Dunn markets nationally, the Company's marketing
efforts are concentrated in the Washington DC metropolitan area. The Washington
metropolitan area (DC, VA, MD) accounts for 68% of all Government computers
procured. The Company's sales to the Government result primarily from:
(1) Prime Contractor - directly submitting a proposal in response to a
government Request for Proposal (RFP).
(2) Sub-contractor - acting as a sub-contractor to a government prime
contractor.
(3) GSA Schedule - direct marketing of products from the Company's GSA
product catalogue.
The Company believes that marketing will become increasingly important in
light of the new procurement legislation and plans to begin a major brand
recognition advertising campaign in two federal publications. The campaign will
emphasize performance, value, and past experience. New products such as servers
and the "All in One" system will be featured. The Company believes that its
ability to offer state-of-the art products, past experience and an established
customer base will prove to be an advantage now that Government customers can
purchase large quantities of products from their GSA contract.
AGGRESSIVE, TARGETED MARKETING. The Company believes targeting vertical
markets such as the federal and state Governments is the most effective approach
to the successful sale of its products. The federal Government is a computer
literate, price conscious customer. The Company believes the Government
represents a very attractive segment of the microcomputer direct marketing
industry because it tends to demand leading edge, high performance technology
products. The Company intends to generate increased sales opportunities in the
Government market through print media advertisements placed regularly in leading
federal computer publications, such as Federal Computer Week and Government
Computer News. The Company intends to expand its commercial business by
targeting specific industries such as the legal market and providing turnkey
solutions. The Company intends to generate sales opportunities through print
media advertisements placed regularly in leading vertical computer publications.
The Company's
27
<PAGE>
advertisements feature testimonials, value-pricing, detailed product
descriptions, and full color photographs.
BUILDING CUSTOMER LOYALTY. The Company strives to build a strong
relationship with its customers. The Company believes that a key to building
customer loyalty is a team of knowledgeable and responsive account executives
and technical and support staff. The Company assigns each customer a trained
account executive, to whom subsequent calls to the Company will be directed. The
Company believes that these strong one-on-one relationships improve the
likelihood that the customer may consider the Company for future purchases.
Product support technicians are available 24 hours per day 7 days a week.
BEST OF THE BREED TECHNOLOGY. The Company intends to continue to provide
its customers with the latest technology at the lowest cost. The Company
believes that the discipline learned in providing federal customers with the
best technology at the lowest cost can be applied effectively in the commercial
marketplace.
UTILIZATION OF EMERGING MARKETING TECHNOLOGIES. The Company intends to
exploit emerging electronic commerce technologies and believes that both the
Government and commercial customers will continue to expand and utilize these
technologies. Internet and on-line computer services are being used by the
Government and many companies to advertise opportunities as well as reference
vendor information. The Company maintains a web site on the Internet wherein its
GSA catalogue and products can be referenced. In addition, the Company provides
the capability for customers to download updated software and drivers that
become available. The Company intends to place its catalogs on diskette and
CD-ROM. The Company believes that its targeted customer base will have a greater
acceptance of these interactive services because its customers tend to have a
greater familiarity with technology products and services.
The Company's marketing strategy to penetrate the commercial market includes
developing the capability to provide businesses with turnkey office automation
computer solutions. The Company intends to expand its hardware expertise to
include software application solutions. It is the Company's goal to provide its
customers with a full range of products including client servers, desktop
workstations, network access, and application software. In addition, it will be
the Company's goal to offer complete remote help desk support via its planned
remote diagnostic and support system. The Company believes fast changing
computer technology and Internet technologies will provide opportunities for
technology solution providers. The Company intends to design and install a
turnkey system for a fixed price and a set date of completion. The Company
intends to work closely with the client to design a system that meets the needs
of the client with a set budget. All systems will be implemented with commercial
off the shelf hardware and software.
SERVICE AND SUPPORT
The Company believes that its dedication to prompt, efficient customer
service and technical support are important factors in customer retention and
overall satisfaction.
TOLL-FREE TECHNICAL SUPPORT. The Company provides toll-free technical
support to its customers 365 days a year. Product support technicians assist
customers with questions concerning compatibility, installation, determination
of defects and general questions of product use. The product support technicians
authorize on-site service or Return Material Authorization ("RMA") to the
Company for warranty service. The Company generally provides for a one-year RMA
warranty on its products, although some customers require a three-year on-site
service warranty. The Company makes service calls to its customers in the
Washington, D.C. area and maintains arrangements with national service
organizations to provide repair services outside the area.
SPECIALTY COMMUNICATIONS. Company employees use the Internet network to
enhance customer support and interbusiness correspondence. Customers can utilize
the Internet to contact their sales, customer service and technical support
representatives via text-based messages which are promptly returned.
28
<PAGE>
COMPETITION
GOVERNMENT MARKET
The Company believes that unique terms and conditions and technical
specifications of Government customers typically preclude national brand
companies (IBM, Compaq, Dell Computer, AST, Apple, etc.) from being successful
in responding to Government RFPs. Certain provisions of Government contracts
(i.e. long-term fixed prices, mandatory maintenance response times, liquidated
damages, etc.) make it difficult for and often not in the best interests of high
volume mass market companies to pursue. Many of these national brand companies,
for a variety of reasons, have not focused on the Government market, however,
there can be no assurance they will not do so in the future.
Although the Company has significant competition from local and remote
companies, it believes that its record and past performance provides it with an
advantage in competing for Government work. There has been a consolidation in
the industry as a result of acquisitions and the failure of many firms. The
competition has settled into a small group of competitors mostly in the
Washington area, some of whom are not manufacturers but rather systems
integrators. The Company believes that the Government's selection criteria for
vendor selection consists of price, quality, familiarity with the vendor, and
size and financial capability of the vendor. In particular, the Company believes
that the Government focuses on the reasonableness of its order quantity with
respect to a specific vendor's capabilities. The Government has recently made
past performance in federal contracting a significant criteria in vendor
selection. Management believes that the Company has never previously performed
in a manner which might be viewed negatively in future selections by the
Government.
The following companies are direct competitors of the Company in the
Government market:
<TABLE>
<CAPTION>
COMPANY TYPE
- --------------------------------------------------- ---------------------------------------------------
<S> <C>
BTG, Inc., Fairfax, VA System Integrator
Winn Laboratories, Inc. Manassas, VA Manufacturer
International Data Products Corp. (IDP) Rockville, Manufacturer
MD
Sysorex Information Systems, Inc., Winchester, VA Systems Integrator
Cordant, Inc., Fairfax, VA Systems Integrator
Zenith Data Systems, Inc., IL Manufacturer
</TABLE>
COMMERCIAL MARKET
The microcomputer products industry is highly competitive. Pricing is very
aggressive in the industry and the Company expects pricing pressures to continue
to intensify. The microcomputer products industry is also characterized by rapid
changes in technology and consumer preferences, short product life cycles and
evolving industry standards.
Microcomputers are marketed through several distribution channels including
direct marketing, traditional microcomputer retailers, computer superstores,
consumer electronic and office supply superstores and other resellers. There are
many manufacturers of microcomputers, substantially all of which have greater
financial, marketing and technological resources than the Company. The Company
competes with manufacturers such as Compaq Computer Corporation, Dell Computer
Corporation, Gateway 2000, IBM and Packard Bell Computer Corporation. There can
be no assurance that the Company will in the future be able to compete
effectively against existing competitors, especially companies who have
historically focused their energies on the commercial market. The principal
elements of competition are product reliability and quality, customization,
price, customer service, technical support and product availability. In
addition, the Company believes by offering commercial customers turnkey office
automation computer solutions it can differentiate itself from its competitors.
29
<PAGE>
FACILITIES
The Company operates in a 35,000 square foot facility in Loudoun County,
Virginia. The facility is owned and operated by C&T Partnership, an entity
comprised of Thomas Dunne, the Company's President, and his wife Claudia Dunne,
the Company's Vice President. In addition, the mortgage on the facility is
guaranteed by the Company. See "Certain Transactions." The Company presently
utilizes approximately 20,000 square feet of the facility. The remaining 15,000
square feet are occupied by two non-affiliated tenants with concurrent leases
terminating in May of 1998. It is anticipated that the Company will occupy the
vacated space. The existing space in the facility can produce approximately
35,000 systems per year on a single shift basis. The Company's lease rate is
$8.74 per square foot, including facility maintenance. The Company's lease
expires in 1999, but it has an option to renew for an additional five years.
The Company's goal is to increase production capacity to 200,000 units per
year. The Company believes this can be accomplished in the existing facility on
a three shift basis. The Company intends to have its facility certified for the
International Quality Standard ISO 9000, which requires it to meet certain
stringent requirements established in Europe, but adopted throughout the world,
to ensure that facilities' manufacturing processes, equipment and associated
quality control systems will satisfy specific customer requirements. The Company
believes that the ISO 9000 quality standard will become a significant factor in
the Government, market and the commercial market. The Company believes that by
obtaining ISO 9000 certification, it will benefit them in the commercial market.
The Company estimates that it will take approximately 18 months to obtain ISO
9000 certification, but there can be no assurance such certification will be
obtained.
PATENTS, TRADEMARKS AND LICENSES
The Company does not maintain a traditional research and development group,
but works closely with microcomputer product suppliers and other technology
developers to stay abreast of the latest developments in microcomputer
technology. While the Company does not believe that its continued success will
depend upon the rights to a patent portfolio, there can be no assurance that the
Company will continue to have access to existing or new technology for use in
its products.
The Company conducts its business under the trademarks and service marks
"Dunn Computer Corporation". The Company has a copyright on its corporate logo.
The Company believes its trademarks and service marks have significant value and
are an important factor in the marketing of its products.
Because most software used on Dunn Computer Corporation-configured computers
is not owned by the Company, the Company has entered into software licensing
arrangements with several software manufacturers, including Microsoft
Corporation.
USE OF TRADENAMES AND PRODUCT NAMES
The following trademarks or tradenames are used in this Prospectus to
identify the entities claiming the marks or names of their products: "Apple" for
Apple Computer, Inc., "AST" for AST Research Inc., "Compaq" for Compaq Computer
Corporation, " "Dell Computer" for Dell Computer Corporation, "IBM" for
International Business Machines Corporation, "Intel" and "Pentium" for Intel
Corporation, "Microsoft," "MS-DOS" and "Microsoft Windows" for Microsoft
Corporation, " "Novell" for Novell, Inc.
EMPLOYEES
As of January 31, 1996, the Company employed 31 persons, of whom three are
employed in executive capacities, seven are engaged in sales and marketing, two
are engaged in administrative capacities, and nineteen (19) are engaged in
operations. None of the Company's employees is covered by a collective
bargaining agreement. The Company considers its relationship with its employees
to be good.
LEGAL PROCEEDINGS
In fiscal 1996, Pulsar Data Sytems, a vendor, commenced an action against
the Company in the Circuit Court for Loudoun County, Virginia. The Plaintiff
seeks refund of approximately $124,200 in connection with a rebate offered by
the manufacturer of certain products purchased from Plaintiff by the Company.
The Company is vigorously contesting the action, both factually and legally, and
has asserted a counter claim contending that the disputed money rightfully
belongs to the Company.
The Company is not aware of any other legal proceedings.
30
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning the Directors
and Executive Officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------------ --- ------------------------------------------------
<S> <C> <C>
Thomas P. Dunne................................. 54 Chairman, Chief Executive Officer, and President
John D. Vazzana................................. 53 Executive Vice President, Chief Financial
Officer, Director
Claudia N. Dunne................................ 37 Vice President, Director
VADM E. A. Burkhalter, Jr., USN................. 68 Director
Daniel Sinnott.................................. 62 Director
</TABLE>
The term of office of each Director is until the next annual meeting of
shareholders and until a successor is elected and qualified or until the
Director's earlier death, resignation or removal from office. Executive officers
hold office until their successors are chosen and qualify, subject to earlier
removal by the Board of Directors. Set forth below is a biographical description
of each director and executive officer of the Company based on information
supplied by each of them.
THOMAS P. DUNNE has been Chairman, Chief Executive Officer and President of
the Company since he founded the Company in 1987. From 1982-1987, Mr. Dunne was
the Director of Sales for Syntrex Corporation, a corporation that supplies
computer hardware and software to the legal profession. Prior thereto, Mr. Dunne
spent 12 years with Perkin Elmer Corporation, a Delaware corporation, where he
held several positions, including Director of North American Sales. Mr. Dunne
also served in the United States Army for two years where he was a Senior
Instructor with the Army Electronics Command. Mr. Dunne is married to Ms.
Claudia Dunne, the Vice President of the Company.
JOHN D. VAZZANA has been the Executive Vice President and Chief Financial
Officer of the Company and a Director since 1994. From 1992-1994, Mr. Vazzana
was the CEO of Hitchler Industry, a manufacturer of plastic lumber made from
recycled plastic. From 1986-1992, Mr. Vazzana was CEO of NRM Steelastic, a
company which he founded which was engaged in the manufacture of capital
equipment for the tire industry. In January 1992, NRM Steelastic filed for
bankruptcy protection primarily as a result of the loss of a significant portion
of its business due to the on-set of the Persian Gulf War. Specifically, NRM had
manufactured significant customized tire equipment for sale to the Iraqi
government, which inventory the Company was unable to sell due to its customized
nature. The corporate bankruptcy has not been discharged to date. Prior thereto,
Mr. Vazzana was Executive Vice President for C3, Inc., a federal computer
systems integrating company which he joined in 1974.
CLAUDIA N. DUNNE, a co-founder of the Company, has been Vice President and a
Director of the Company since its inception. From 1985-1987, Ms. Dunne was
Federal Proposal Manager for Syntrex, Inc. From 1983-1985, Ms. Dunne was
Proposal Manager for Harris & Paulson, a company which, like Syntrex, Inc., sold
minicomputers and proprietary time and accounting software for law firms. Ms.
Dunne is married to Mr. Thomas Dunne, the President of the Company.
VICE ADMIRAL E. A. BURKHALTER, JR., has been a director of the Company since
January 1997. Mr. Burkhalter is currently the President of Burkhalter
Associates, Inc. a consulting firm providing services in the areas of
international and domestic strategy, management policy and technology
applications for both government and industry. Mr. Burkhalter is also currently
a member of the Director of Central Intelligence (DCI) Military Advisory Panel
and serves as an advisor to the Defense Intelligence Agency. He is also an
Officer and Director of the Navy Submarine League. Mr. Burkhalter has served as
an International Director for the Armed Forces Communications and Electronics
Association (AFCEA) and as Director of the Security Affairs Support Association
(SASA). Mr. Burkhalter spent 40 years as a member of the United States Navy,
during which time he held several positions, including Director of Strategic
Operations for the Chairman of the Joint Chiefs of Staff, commanding officer of
a nuclear submarine followed by command of a submarine division and squadron.
During the second half of Mr. Burkhalter's Naval career, he served principally
in intelligence assignments, including senior positions in Naval Intelligence,
The Defense Intelligence Agency, and as Director of the Intelligence Community
Staff.
31
<PAGE>
Upon retirement, he was senior military officer assigned to duty in the U.S.
Intelligence Community and directed the principal coordinating body for all U.S.
intelligence activities. As the Director of the Intelligence Community Staff for
four years, he had direct responsibilities for the integration of all aspects of
National and Military Intelligence, Space Programs and working relationships
with the Assistant Secretary of Defense for C3 I Systems, which included the
management of the Defense Reconnaissance Support Program Office. Mr. Burkhalter
has chaired a 20-person advisory panel for the Defense Advanced Research
Projects Agency concerning advanced space technology and light satellite
initiatives. He served on a review of antisubmarine warfare sponsored by the
U.S. Congress. He also chaired an interagency task force for then Vice President
George Bush which studied issues related to the prevention of terrorists and
narcotics traffickers from crossing U.S. borders. He is currently the Chairman
of the Attorney General's Policy Advisory Panel for Law Enforcement Technology.
Mr. Burkhalter is a 1951 graduate of the U.S. Naval Academy.
DANIEL SINNOTT has been a member of the Board since January 1997. Mr.
Sinnott is currently President and Chief Executive Officer of Worldwide Internet
Solutions Network, Inc. ("WIZnet"). WIZnet is a worldwide leader in electronic
commerce and the creator of "The Purchasing ExtraNet" with a multi national
customer base. WIZnet provides electronic catalogs and adaptive recognition
search technology and links buyers and sellers via secure mail. Mr. Sinnott has
been serving as CEO of WIZnet since 1995. In 1992 Mr. Sinnott was a founder of
SINNOTT BRUNO & Company. The company is a management consulting firm providing
advisory services to executive and management organization that are in the
emerging or transition stages of development. The firm offers confidential,
objective evaluation of business opportunities and/ or problems, alternative
solutions and assistance in implementation. Mr. Sinnott was full time with the
firm from 1992 until joining WIZnet. In 1995, the Company purchased shares of
Common Stock of WIZnet for an aggregate of $150,000. See "Certain Transactions."
From 1979 to 1992, Mr. Sinnott was the founder, President and CEO of Syntrex.
Syntrex designed manufactured and marketed small computers designed for the
legal market. Due to the rapid development of the personal computer, the Company
was sold to Phoenix Technologies in 1992 in a chapter 11 restructuring. Prior to
joining Syntrex, Mr. Sinnott founded Interdata Incorporated which developed,
designed and manufactured the first 32-bit mini-computer. Interdata Incorporated
was subsequently acquired by Perkin Elmar. Prior to joining Interdata, Mr.
Sinnott was involved in designing the 8400 analogue computer which was
instrumental in the Apollo program.
The Underwriter has the right, during the three year period following the
effective date of this Offering, to designate one director to serve as a member
of the Company's Board of Directors and the Company will use its best efforts to
elect such individual.
COMMITTEES OF THE BOARD
The Company's Board of Directors has an Audit Committee, comprised of the
two outside Directors, and a Compensation Committee, comprised of the two
outside directors and Thomas P. Dunne.
COMPENSATION OF DIRECTORS
The Company has not paid and does not presently propose to pay compensation
to any director for acting in such capacity, except for nominal sums for
attending Board of Directors meetings and reimbursement for reasonable expenses
in attending those meetings. As an incentive, each outside Director will be
granted a stock option for 20,000 shares of Common Stock at an exercise price
which management believes approximates their fair market value. On January 6,
1997, Mr. Burkhalter, an outside director, was granted a stock option to
purchase 10,000 shares of Common Stock at $4.15 per share. The grant was
increased to 20,000 on January 14, 1997. Also on January 14, 1997, the Company
granted Daniel Sinnott, an outside director of the Company, a stock option to
purchase 20,000 shares of Common Stock at $4.15 per share. The Company believes
the $4.15 price to be the fair market value at the time of the grant.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
paid by the Company during each of the last two fiscal years to the Company's
Chief Executive Officer and to each of the Company's executive officers who
earned in excess of $100,000.
32
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -------------------
--------------------------------- NUMBER OF
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS GRANTED
- ---------------------------------------------------------------- --------- ---------- ---------- -------------------
<S> <C> <C> <C> <C>
Thomas P. Dunne................................................. 1995 $ 240,000 275,000
Chairman, Chief Executive Officer 1996 $ 240,000 $ -0-
and President
John D. Vazzana................................................. 1995 $ 240,000 275,000
Executive Vice President, Chief 1996 $ 240,000 $ -0-
Financial Officer, Director
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has entered into three year employment agreements with each of
Messrs. Vazzana and Dunne effective on the date of this Prospectus. Both
agreements provide for a $240,000 annual salary and a bonus at the discretion of
the Company's Board of Directors. The bonus may not exceed 5% of the Company's
pre-tax income for the preceding fiscal year; or $250,000. The agreements
contain confidentiality provisions and covenants not to compete with the Company
for a period of one year following the term of the agreements.
INCENTIVE STOCK OPTION PLAN
Under the Company's Incentive Stock Option Plan (the "Plan"), options to
purchase a maximum of 600,000 shares of Common Stock of the Company (subject to
adjustments in the event of stock splits, stock dividends, recapitalizations and
other capital adjustments) may be granted to employees, officers and directors
of the Company and other persons who provide services to the Company. As of the
date of this Prospectus, 295,000 of such options have been granted at an
exercise price of $4.15. 232,500 of such options were granted on January 6, 1997
and 62,500 were granted on January 14, 1997. As of the date of this Prospectus,
none of these options have been exercised. The options to be granted under the
Plan are designated as incentive stock options or non-incentive stock options by
the Board of Directors which also has discretion as to the persons to be granted
options, the number of shares subject to the options and the terms of the option
agreements. Only employees, including officers and part time employees of the
Company, may be granted incentive stock options. Officers and directors who
currently own more than 5% of the outstanding stock are not eligible to
participate in the Plan.
The Plan provides that options granted thereunder shall be exercisable
during a period of no more than ten years from the date of grant, depending upon
the specific option agreement, and that, with respect to incentive stock
options, the option exercise price shall be at least equal to 100% of the fair
market value of the Common Stock at the time of the grant.
RETIREMENT PLANS
The Company established a discretionary contribution plan effective November
1, 1994 (the "401(k) Plan") for its employees who have completed three months of
service with the Company. The 401(k) Plan is administered by the Company and
permits pre-tax contributions by participants pursuant to Section 401(k) of the
Code up to the maximum allowable contributions as determined by the Code. The
Company may match participants' contributions on a discretionary basis. In
fiscal year 1995 and 1996, the Company contributed $.25 for each $1.00
contributed by the employees.
During the fiscal year ended October 31, 1995, the Company established a
defined benefit plan covering substantially all salaried employees (the "Pension
Plan"). The Pension Plan benefits are based on years of service and the
employee's compensation. The Company contributes, on an annual basis, amounts
sufficient to meet the minimum funding requirements set forth in the Employee
Retirement Income Security Act of 1974 ("ERISA"). Contributions are intended to
provide not only for benefits attributed to service to date, but also for those
expected to be earned in the future. The assets of the Pension Plan are invested
in money markets and corporate debt and equity instruments. The Company
contributed an aggregate of approximately $135,000 for the Pension Plan years
ending October 31, 1995 and 1996, which amount met the minimum funding
requirements under ERISA.
33
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information, as of the date hereof,
and as adjusted to give effect to the Offering and the transactions contemplated
thereby, with respect to the beneficial ownership of the Common Stock by each
beneficial owner of more than 5% of the outstanding shares thereof, by each
director, each nominee to become a director and each executive named in the
Summary Compensation Table and by all executive officers, directors and nominees
to become directors of the Company as a group, both before and after giving
effect to the Offering.
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING
COMMON STOCK
BENEFICIALLY OWNED
NUMBER OF SHARES OF ------------------------------
NAME AND ADDRESS OF COMMON STOCK BEFORE AFTER
BENEFICIAL OWNER BENEFICIALLY OWNED OFFERING(2) OFFERING(3)
--------------------------------- ------------------- --------------- -------------
<S> <C> <C> <C>
Thomas P. Dunne (1)................................................ 2,800,000(4) 70% 56%
John D. Vazzana (1)................................................ 1,200,000 30% 24%
Claudia N. Dunne (1)............................................... 2,800,000(5) 70% 56%
VADM E.A. Burkhalter (1)........................................... 20,000(6) * *
Daniel Sinnott (1)................................................. 20,000(6) * *
All Executive Officers and Directors as a Group (5) persons........ 4,000,000(7) 100% 80%
</TABLE>
- ------------------------
* less than 1%
(1) The address of each of such individuals is c/o Dunn Computer Corporation,
1306 Squire Court, Sterling, Virginia 21066
(2) Calculated based upon 4,000,000 shares outstanding prior to the Offering and
does not give effect to 600,000 shares of Common Stock which are reserved
for issuance under the Plan.
(3) Assumes 5,000,000 shares outstanding after the Offering without giving
effect to the exercise of the Over-Allotment Option or the Underwriter's
Warrants.
(4) Includes 560,000 shares of Common Stock held by Claudia Dunne, the Company's
Vice President, and Mr. Dunne's wife, of which Mr. Dunne disclaims
beneficial ownership.
(5) Includes 2,240,000 shares of Common Stock held by Thomas Dunne, the
Company's President and CEO, and Ms. Dunne's husband, of which Ms. Dunne
disclaims beneficial ownership.
(6) Represents shares of the Company's Common Stock underlying stock options
granted pursuant to the Plan.
(7) Does not include 40,000 shares of Common Stock underlying options which are
held by the Company's two outside directors.
34
<PAGE>
CERTAIN TRANSACTIONS
The Company leases its facility from C&T Partnership, an entity owned and
controlled by Thomas and Claudia Dunne, both affiliates of the Company. The
lease agreement terminates in October 1999, but provides for a five year renewal
at the Company's option. Rent expense under this lease was $144,000 and $154,000
for the years ended October 31, 1995 and 1996, respectively. In addition, the
$1,000,000 mortgage on the facility, which has a 25 year term, and bears
interest at 2% over prime is guaranteed by the Company. The Company has been
advised that all payments with respect to the mortgage are current. For
additional terms of the lease and a description of the facility, see
"Business--Facilities."
On January 14, 1997, the Company issued options to purchase an aggregate of
62,500 shares of the Company's Common Stock to six affiliates of the Company,
four of whom are employees of the Company but are not officers or directors, and
two of whom are outside directors. The options vest over a period of 4 years and
are exercisable at $4.15 per share. The Company believes that the exercise price
is a fair estimate of the fair market value of the stock as of the date of grant
and as such there is no compensation expense to be recognized. The options
expire on January 13, 2002.
On January 6, 1997 and January 14, 1997, the Company issued options to
purchase an aggregate of 295,000 shares of the Company's common stock to 21
affiliates of the Company, 19 of whom are employees of the Company but are not
officers or directors, and 2 of whom are outside directors. The options vest
over a period of 4 years and are exercisable at $4.15 per share. The Company
believes that the exercise price is a fair estimate of the fair market value of
the stock as of the date of grant and as such there is no compensation expense
to be recognized. The options expire in January 2002.
On January 6, 1997, the Company entered into a share exchange agreement (the
"Share Exchange Agreement") with Dunn Computer Corporation, a Virginia
corporation, whereby such Virginia corporation became a wholly-owned subsidiary
of the Company. Pursuant to the Share Exchange Agreement, the Company exchanged
its stock on a 2,799.160251 for 1 basis with the holders of stock of the
Virginia corporation.
In April 1996, the Company entered into a line of credit agreement with a
bank whereby the Company could borrow up to $2,000,000. Outstanding borrowings
bear interest at prime plus three-fourths of one percent. The line of credit is
secured by the assets of the Company. In addition, the principal stockholders of
the Company have personally guaranteed the line of credit.
In November 1995, the Company loaned Thomas Dunne, the President of the
Company, approximately $30,000, such loan bore no interest. The principal and
accrued interest on the loan was repaid by Mr. Dunne in October 1996.
In July, 1994, John Vazzana, an officer of the Company, acquired an
aggregate of 428.7 shares of the Virginia corporation's Common Stock for an
aggregate consideration of $100,000. The Company believes that the price paid
represented the fair market value, based on the Company's net worth, at the time
of the purchase. These shares were exchanged for 1,200,000 shares of the
Company's Common Stock pursuant to the Share Exchange Agreement.
In 1995, the Company made a stock investment of $150,000 in WIZnet, an
Internet related company. Daniel Sinnott, a director of the Company is the
President and Chief Executive Officer of WIZnet. Mr. Sinnott was not a director
of the Company at the time of the investment. The Company believes that the
transaction was fair and reasonable.
Future transactions with affiliates will be on terms no less favorable than
could be obtained from unaffiliated parties and will be approved by a majority
of the independent and/or disinterested members of the Board of Directors.
35
<PAGE>
DESCRIPTION OF SECURITIES
The following is a description of all material terms and features of the
securities of the Company, but does not purport to be complete and is subject in
all respects to applicable Delaware law and to the provisions of the Company's
articles of incorporation ("Articles of Incorporation") and bylaws (the
"Bylaws"), and the Underwriting Agreement between the Company and the
Underwriter, copies of all which have been filed with the Commission as Exhibits
to the Registration Statement of which this Prospectus is a part.
GENERAL
The Company is authorized by its Articles of Incorporation to issue an
aggregate of 20,000,000 shares of Common Stock, $.001 par value per share, and
2,000,000 shares, $.001 par value, of preferred stock (the "Preferred Stock").
Immediately prior to this Offering, an aggregate of 4,000,000 shares of Common
Stock are issued and outstanding. No shares of the authorized Preferred Stock
are issued and outstanding. All outstanding shares of Common Stock are of the
same class, and have equal rights and attributes.
PREFERRED STOCK
The Company is authorized by its Articles of Incorporation to issue a
maximum of 2,000,000 shares of Preferred Stock, in one or more series and
containing such rights, privileges and limitations, including voting rights,
dividend rates, conversion privileges, redemption rights and terms, redemption
prices and liquidation preferences, as the Board of Directors of the Company
may, from time to time, determine. No shares of Preferred Stock have been
issued, and the Company has no present plans to issue any Preferred Stock.
The issuance of shares of Preferred Stock pursuant to the Board's authority
described above could decrease the amount of earnings and assets available for
distribution to holders of Common Stock, and could otherwise adversely affect
the rights and powers, including voting rights, of such holders and may have the
effect of delaying, deferring or preventing a change in control of the Company.
The Board of Directors does not currently intend to seek stockholder approval
prior to any issuance of authorized but unissued Preferred Stock, unless
required by law.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of stockholders of the Company. In addition, such
holders are entitled to receive ratably such dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available therefor, subject to the payment of preferential dividends with
respect to any shares of Preferred Stock that may be outstanding from time to
time. In the event of the dissolution, liquidation or winding up of the Company,
the holders of Common Stock are entitled to share ratably in all assets
remaining after payment of all liabilities of the Company, subject to the prior
distribution rights of the holders of any Preferred Stock that may be
outstanding at that time. All outstanding shares of Common Stock are, and when
issued, the shares of Common Stock offered hereby will be, fully paid and
nonassessable.
The holders of Common Stock do not have any subscription, redemption or
conversion rights, nor do they have any preemptive or other rights to acquire or
subscribe for additional, unissued or treasury shares. Accordingly, if the
Company were to elect to sell additional shares of Common Stock following this
Offering, persons acquiring Common Stock in this Offering would have no right to
purchase additional shares, and as a result, their percentage equity interest in
the Company would be reduced.
The holders of Common Stock do not have cumulative voting rights.
Accordingly, the holders of more than half of the outstanding shares of Common
Stock can elect all of the Directors to be elected in any election, if they
choose to do so. In such event, the holders of the remaining shares of Common
Stock
36
<PAGE>
would not be able to elect any Directors. The Board is empowered to fill any
vacancies on the Board created by the resignation, death or removal of
Directors.
Upon completion of this Offering (but without giving to the exercise of the
Over-Allotment Option, the Underwriter's Warrants or any outstanding stock
options), the Company's executive officers and directors will beneficially own
approximately 80% of the outstanding shares of Common Stock, and will be in a
position to control the voting results of certain actions required or permitted
to be taken by stockholders of the Company, including the election of directors.
However, as no voting agreement exists among these executive officers and
directors, each is able to vote as he or she may desire on any issue affecting
the Company.
DELAWARE ANTI-TAKEOVER LAW
Section 203 of the Delaware General Corporation Law (the "Delaware
anti-takeover law") generally prohibits a publicly held Delaware corporation
from engaging in a "business combination" with an interested stockholder for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (i) the corporation has elected in its
original certificate of incorporation not to be governed by the Delaware
anti-takeover law (the Company has not made such an election), (ii) prior to
such date the Board of Directors of the corporation approved either the business
combination or the transaction in which the person became an interested
stockholder, (iii) upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the outstanding voting stock of the corporation excluding shares
owned by directors who are also officers of the corporation and by certain
employee stock plans, (iv) on or after such date the business combination is
approved by the Board of Directors of the corporation and by the affirmative
vote of at least 66 3/4% of the outstanding voting stock of the corporation that
is not owned by the interested stockholder, or (v) the majority of the
corporation's stockholders adopt an amendment to the corporation's certificate
of incorporation electing not to be governed by the Delaware anti-takeover law,
such amendment not being effective for 12 months following its adoption and not
applicable to any business combination between the corporation and a stockholder
who became an interested stockholder after its adoption. A "business
combination" generally includes mergers, asset sales and similar transactions
between the corporation and the interested stockholder, and other transactions
resulting in a financial benefit to the stockholder. An "interested stockholder"
is a person who, together with affiliates and associates, owns 15% or more of
the corporation's voting stock or who is an affiliate or associate of the
corporation and, together with his affiliates and associates, has owned 15% or
more of the corporation's voting stock within three years.
PERSONAL LIABILITY OF DIRECTORS
The Delaware General Corporation Law permits Delaware corporations to
eliminate or limit the personal liability of a director to the corporation for
monetary damages arising from certain breaches of fiduciary duties as a
director. The Company's Certificate of Incorporation includes such a provision
eliminating the personal liability of directors to the Company and its
stockholders for monetary damages for any breach of fiduciary duty as a
director, except (i) any breach of a director's duty of loyalty to the Company
or its stockholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) for any
transaction from which the director derived an improper personal benefit; or
(iv) for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General Corporation Law.
Directors are also not insulated from liability for claims arising under the
federal securities laws. The foregoing provisions of the Company's Certificate
of Incorporation may reduce the likelihood of derivative litigation against
directors for breaches of their fiduciary duties, even though such an action, if
successful, might otherwise have benefitted the Company and its stockholders.
37
<PAGE>
The Company's Certificate of Incorporation also provides that the Company
shall indemnify its directors, officers and agents to the fullest extent
permitted by the Delaware General Corporation Law. The Company does not have
directors' and officers' liability insurance but may secure such insurance in
the future. Furthermore, the Company may enter into indemnity agreements with
its directors and officers for the indemnification of and advancing of expenses
to such persons to the fullest extent permitted by law.
TRANSFER AGENT
The Transfer Agent for the Common Stock of the Company is Continental Stock
Transfer & Trust Company.
SHARES ELIGIBLE FOR FUTURE SALE
Upon the consummation of this Offering, the Company will have 5,000,000
shares of Common Stock outstanding. In addition, the Company has reserved for
issuance 600,000 shares upon the exercise of options eligible for grant under
the Company's Stock Option Plan, 295,000 of which have been granted. Of the
shares of Common Stock to be issued and outstanding after this Offering, the
1,000,000 shares of Common Stock offered hereby (plus any additional shares sold
upon exercise of the Over-Allotment Option) will be freely tradeable without
restriction or further registration under the Act, except for any shares
purchased or held by an "affiliate" of the Company (in general, a person who has
a control relationship with the Company) which will be subject to the
limitations of Rule 144 adopted under the Act ("Rule 144"). The remaining
4,000,000 shares of Common Stock are "restricted securities" as that term is
defined under Rule 144, and may not be sold unless registered under the Act or
exempted therefrom. All of the foregoing shares are now eligible to be sold in
accordance with the exemptive provisions and the volume limitations of Rule 144.
In general, under Rule 144, as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an "affiliate" of
the Company, (or persons whose shares are aggregated), who for at least two
years (one year commencing April 29, 1997) has beneficially owned restricted
securities acquired directly or indirectly from the Company or an affiliate of
the Company in a private transaction is entitled to sell in brokerage
transactions within any three-month period, a number of shares that does not
exceed the greater of (i) 1% of the total number of outstanding shares of the
same class, or (ii) if the stock is quoted on the NASDAQ National Market System,
the average weekly trading volume in the stock during the four calendar weeks
preceding the day notice is given to the Securities and Exchange Commission with
respect to such sale. A person (or persons whose shares are aggregated) who is
not an affiliate and has not been an affiliate of the Company for at least three
months immediately preceding the sale and who has beneficially owned restricted
securities for at least three years (two years commencing April 29, 1997) is
entitled to sell such shares pursuant to subparagraph (k) of Rule 144 without
regard to any of the limitations described above.
All of the Company's directors and executive officers, (who hold in the
aggregate 4,000,000 shares), have agreed not to sell, offer to sell or otherwise
dispose of any shares of the Company's Common Stock until 180 days from the date
of this Prospectus, except pursuant to gifts or pledges in which the donee or
pledgee agrees to be bound by such restrictions, without the prior written
consent of the Underwriter. These agreements are enforceable only by the parties
thereto, and are subject to rescission or amendment at any time without approval
of other stockholders.
Sales of the Company's Common Stock by certain of the present stockholders
in the future, under Rule 144, may have a depressive effect on the price of the
Company's Common Stock.
38
<PAGE>
UNDERWRITING
The Company has agreed to sell, and the Underwriter has agreed, subject to
the terms and conditions of the Underwriting Agreement, to purchase from the
Company on a firm commitment basis, 1,000,000 shares of Common Stock.
The Underwriter has advised the Company that it proposes to offer the
1,000,000 shares of Common Stock to the public at the public Offering price set
forth on the cover page of this Prospectus and that it may allow to selected
dealers who are members of the National Association of Securities Dealers, Inc.
("NASD"), concessions of not in excess of $ per share of Common Stock of
which not more than $ per share of Common Stock may be re-allowed to
certain other dealers. After the initial public Offering, the public Offering
price, concessions and reallowances may be changed by the Underwriter.
The Underwriting Agreement provides further that the Underwriter will
receive a non-accountable expense allowance of 3% ($35,000 of which has been
previously paid) of the aggregate public Offering price of the shares of Common
Stock sold hereunder (including any shares of Common Stock sold pursuant to the
Over-Allotment Option) (which allowance amounts to $150,000 or $172,500 if the
Over-Allotment Option is exercised in full).
The Company's existing stockholders have granted to the Underwriter the
Over-Allotment Option, which is exercisable for a period of 45 calendar days
after the closing of the Offering, to purchase up to an aggregate of 150,000
additional shares of Common Stock at the public Offering price, less
underwriting discounts and commissions, solely to cover over-allotments, if any.
The Company has agreed to sell to the Underwriter for $10 the Underwriter's
Warrants to purchase 100,000 shares of Common Stock. The Underwriter's Warrants
will be non-exercisable for one year after the date of this Prospectus.
Thereafter, for a period of four years, the Underwriter's Warrants will be
exercisable at $6.00 per share of Common Stock. The Underwriter's Warrants are
not transferable for a period of one year after the date of this Prospectus,
except to officers and partners of the Underwriter and to members of the selling
group and their officers and partners. The Company has also granted certain
registration rights to the holders of the Underwriter's Warrants.
For the life of the Underwriter's Warrants, the holders thereof are given,
at nominal cost, the opportunity to profit from a rise in the market price of
the Company's Common Stock with a resulting dilution in the interest of other
stockholders. Further, the holders may be expected to exercise the Underwriter's
Warrants at a time when the Company would in all likelihood be able to obtain
equity capital on terms more favorable than those provided in the Underwriter's
Warrants.
The Company has agreed to retain the Underwriter as a financial consultant
to the Company for a period of 24 months after the Offering for an aggregate fee
of $60,000 payable in full upon consummation of the Offering. As the Company's
financial consultant, the Underwriter will provide investment banking services
to the Company as well as seek out strategic transactions on behalf of the
Company and furnish advice to the Company in connection with any such
transactions.
The Company has agreed, for a period of one year after the date of this
Prospectus, not to issue any shares of Common Stock or Preferred Stock or any
warrants, options or other rights to purchase Common Stock or Preferred Stock
without the prior written consent of the Underwriter. Notwithstanding the
foregoing, the Company may issue shares upon exercise of any warrants or options
outstanding on the date hereof or to be outstanding upon completion of the
Offering pursuant to the terms thereof, and may issue shares reserved for
issuance under the 1997 Option Plan. The Company has also agreed to cause the
Company's current stockholders owning all of the Common Stock outstanding as of
the date hereof to enter into written agreements with the Underwriter pursuant
to which such stockholders shall agree not to sell any of their shares for a
period of six months after the date of Prospectus without the prior written
consent of the Underwriter.
39
<PAGE>
The Underwriting Agreement provides for reciprocal indemnification between
the Company and the Underwriter against liabilities in connection with the
Offering, including liabilities under the Act.
The Company has agreed, if requested by the Underwriter at any time within
three years after the closing of the Offering, to nominate and use its best
efforts to elect a designee of the Underwriter as a director of the Company or,
at the Underwriter's option, as a non-voting advisor to the Company's Board of
Directors. Such designee may be a director, officer, partner, employee or
affiliate of the Underwriter. The person to be designated by the Underwriter has
not been identified to date.
The initial public Offering price of the shares of Common Stock offered has
been determined by negotiation between the Company and the Underwriter. Factors
considered in determining the Offering price of the shares of Common Stock
offered hereby included the business in which the Company is engaged, the
Company's financial condition, an assessment of the Company's management, the
general condition of the securities markets and the demand for similar
securities of comparable companies.
The foregoing is a brief summary of all of the material provisions of the
Underwriting Agreement, the Underwriter's Warrants and other agreements referred
to above and does not purport to be a complete statement of their respective
term and conditions. Copies of such agreements have been filed as exhibits to
the Registration Statement of which this Prospectus is a part. See "Additional
Information."
40
<PAGE>
LEGAL OPINIONS
The legality of the Common Stock offered by this Prospectus will be passed
upon for the Company by Gersten, Savage, Kaplowitz, Fredericks & Curtin, LLP,
New York, New York. Certain legal matters will be passed upon by Stark & Stark,
P.C., Lawrenceville, New Jersey, counsel for the Underwriter in connection with
the Offering. Gersten, Savage, Kaplowitz, Fredericks & Curtin, LLP has
represented the Underwriter in the past and may do so again in the future.
EXPERTS
The consolidated financial statements of Dunn Computer Corporation at
October 31, 1996, and for each of the two years in the period ended October 31,
1996, appearing in this Prospectus and Registration Statement have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein and in the Registration Statement, and are included
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement under the
Act with respect to the Common Stock offered hereby. This Prospectus omits
certain information contained in the Registration Statement and the exhibits
thereto, and references is made to the Registration Statement and the exhibits
thereto for further information with respect to the Company and the Common Stock
offered hereby. Statements contained herein concerning the provisions of any
documents are not necessarily complete, and in each instance reference is made
to the copy of such document filed as an exhibit to the Registration Statement.
Each such statement is qualified in its entirety by such reference. The
Registration Statement, including exhibits and schedules filed therewith, may be
inspected without charge at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 and at the regional offices of the Commission located at 7 World
Trade Center, Suite 1300, New York, New York 10048, and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such materials may be obtained from the Public Reference Section of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and its public reference facilities in New York, New York and Chicago,
Illinois upon payment of the prescribed fees. Electronic registration statements
filed through the Electronic Data Gathering, Analysis, and Retrieval System are
publicly available through the Commission's Website (http://www.sec.gov). At the
date hereof, the Company was not a reporting company under the Securities
Exchange Act of 1934, as amended.
41
<PAGE>
INDEMNIFICATION FOR ACT LIABILITIES
The Certificate of Incorporation and By-laws of the Company provide that the
Company shall indemnify to the fullest extent permitted by Delaware law any
person whom it may indemnify thereunder, including directors, officers,
employees and agents of the Company. Such indemnification (other than as ordered
by a court) shall be made by the Company only upon a determination that
indemnification is proper in the circumstances because the individual met the
applicable standard of conduct. Advances for such indemnification may be made
pending such determination. Such determination shall be made by a majority vote
of a quorum consisting of disinterested directors, or by independent legal
counsel or by the stockholders. In addition, the Certificate of Incorporation
provides for the elimination, to the extent permitted by Delaware law, of
personal liability of directors to the Company and its stockholders for monetary
damages for breach of fiduciary duty as directors.
The Company proposes to obtain a directors and officers insurance and
company reimbursement policy. The policy, if obtained, would insure directors
and officers against unindemnified losses arising from certain wrongful acts in
their capacities and would reimburse the Company for such loss for which the
Company has lawfully indemnified the directors and officers.
The Company has also agreed to indemnify each director and executive officer
pursuant to an Indemnification Agreement with each such director and executive
officer from and against any and all expenses, losses, claims, damages and
liability incurred by such director or executive officer for or as a result of
action taken while such director or executive officer was acting in his capacity
as a director, officer, employee or agent of the Company.
Insofar as indemnification for liabilities arising under the Act may be
provided to directors, officers and controlling persons of the Company pursuant
to the foregoing provisions, or otherwise, the Company has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Act and is therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
42
<PAGE>
DUNN COMPUTER CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Report of Ernst & Young LLP, Independent Auditors.......................................................... F-2
Consolidated Balance Sheets as of October 31, 1996 and January 31, 1997 (unaudited)........................ F-3
Consolidated Statements of Income for the years ended October 31, 1995 and 1996 and for the three months
ended January 31, 1996 and 1997 (unaudited).............................................................. F-4
Consolidated Statements of Stockholders' Equity for the years ended October 31, 1995 and 1996 and for the
three months ended January 31, 1997 (unaudited).......................................................... F-5
Consolidated Statements of Cash Flows for the years ended October 31, 1995 and 1996 and for the three
months ended January 31, 1996 and 1997 (unaudited)....................................................... F-6
Notes to Consolidated Financial Statements................................................................. F-7
</TABLE>
F-1
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors
We have audited the accompanying consolidated balance sheet of Dunn Computer
Corporation as of October 31, 1996, and the related consolidated statements of
income, stockholders' equity and cash flows for the two years in the period
ended October 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Dunn Computer Corporation at October 31, 1996, and the consolidated results of
its operations and its cash flows for the two years in the period ended October
31, 1996 in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
Vienna, Virginia /s/ Ernst & Young LLP
December 13, 1996, except Notes 1, 10 and 11,
as to which the date is January 14, 1997
</TABLE>
F-2
<PAGE>
DUNN COMPUTER CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JANUARY 31,
1997
OCTOBER 31, ------------
1996
------------ (UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................................................... $ 897,664 $ 2,283,210
Accounts receivable, less allowance for doubtful accounts of $15,000................ 3,174,060 1,391,288
Inventory, less obsolescence reserve of $20,000..................................... 985,603 1,325,425
Investments......................................................................... 150,000 150,000
Prepaid expenses.................................................................... -- 91,579
------------ ------------
Total current assets.................................................................. 5,207,327 5,241,502
Property and equipment, net........................................................... 63,763 57,313
Other assets.......................................................................... 3,540 --
------------ ------------
Total assets.......................................................................... $ 5,274,630 $ 5,298,815
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................................................... $ 2,452,161 $ 2,107,348
Accrued expenses.................................................................... 285,244 321,067
Income taxes payable................................................................ 519,308 383,158
Deferred tax credit................................................................. 11,086 2,236
Unearned revenue.................................................................... 67,640 --
------------ ------------
Total current liabilities............................................................. 3,335,439 2,813,809
Commitments
Stockholders' equity:
Preferred Stock, $.001 par value; 2,000,000 shares authorized, no shares issued and
outstanding....................................................................... -- --
Common Stock, $.001 par value; 20,000,000 shares authorized, 4,000,000 shares issued
and outstanding................................................................... 4,000 4,000
Additional paid-in capital.......................................................... 111,857 111,857
Retained earnings................................................................... 1,823,334 2,369,149
------------ ------------
Total stockholders' equity............................................................ 1,939,191 2,485,006
------------ ------------
Total liabilities and stockholders' equity............................................ $ 5,274,630 $ 5,298,815
------------ ------------
------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES.
F-3
<PAGE>
DUNN COMPUTER CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31, THREE MONTHS ENDED JANUARY
--------------------------- 31,
1995 1996 --------------------------
------------ ------------- 1996 1997
------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenues............................ $ 7,491,452 $ 18,098,638 $ 6,344,973 $ 5,505,350
Costs of revenues................... 6,046,480 14,102,442 4,816,346 4,199,577
------------ ------------- ------------ ------------
Gross profit........................ 1,444,972 3,996,196 1,528,627 1,305,773
Selling and marketing............... 154,110 475,471 80,314 181,507
General and administrative.......... 812,046 1,496,979 559,413 252,119
------------ ------------- ------------ ------------
Income from operations.............. 478,816 2,023,746 888,900 872,147
Other income........................ 34,512 49,343 2,840 7,668
Interest expense.................... (26,246) (57,925) (57,227) --
------------ ------------- ------------ ------------
Net income before income taxes...... 487,082 2,015,164 834,513 879,815
Provision for income taxes.......... 244,000 776,000 321,300 334,000
------------ ------------- ------------ ------------
Net income.......................... $ 243,082 $ 1,239,164 $ 513,213 $ 545,815
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
Earnings per share.................. $ .06 $ .31 $ .13 $ .13
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
Weighted average number of shares
outstanding....................... 4,050,150 4,050,150 4,050,150 4,100,300
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES.
F-4
<PAGE>
DUNN COMPUTER CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL RECEIVABLE
--------------------- PAID-IN FROM RETAINED
SHARES AMOUNT CAPITAL STOCKHOLDER EARNINGS TOTAL
---------- --------- ---------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at October 31, 1994................... 4,000,000 $ 4,000 $ 111,857 $(132,538) $ 341,088 $ 324,407
Cash receipts from stockholder.............. -- -- -- 32,538 -- 32,538
Net income.................................. -- -- -- -- 243,082 243,082
---------- --------- ---------- ----------- ------------ ------------
Balance at October 31, 1995................... 4,000,000 4,000 111,857 (100,000) 584,170 600,027
Cash receipts from stockholder.............. -- -- -- 100,000 -- 100,000
Net income.................................. -- -- -- -- 1,239,164 1,239,164
---------- --------- ---------- ----------- ------------ ------------
Balance at October 31, 1996................... 4,000,000 4,000 111,857 -- 1,823,334 1,939,191
Net income (unaudited)...................... -- -- -- -- 545,815 545,815
---------- --------- ---------- ----------- ------------ ------------
Balance at January 31, 1997 (unaudited)....... 4,000,000 $ 4,000 $ 111,857 $ -- $ 2,369,149 $ 2,485,006
---------- --------- ---------- ----------- ------------ ------------
---------- --------- ---------- ----------- ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES.
F-5
<PAGE>
DUNN COMPUTER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31, THREE MONTHS ENDED
------------------------- JANUARY 31,
1995 1996 --------------------------
----------- ------------ 1996 1997
------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................................ $ 243,082 $ 1,239,164 $ 513,213 $ 545,815
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization......................... 25,441 32,300 6,450 6,450
Changes in operating assets and liabilities:
Accounts receivable................................. (734,660) (951,553) (2,887,138) 1,782,772
Inventory........................................... (515,426) 211,763 209,598 (339,822)
Other assets and prepaid expenses................... (8,000) 9,460 12,139 (88,039)
Accounts payable.................................... 652,864 471,636 (344,061) (344,813)
Accrued expenses.................................... 309,471 (193,084) 85,165 35,823
Income taxes payable................................ 223,582 260,947 99,266 (136,150)
Deferred tax credit................................. 9,399 (66,276) -- (8,850)
Unearned revenue.................................... -- 67,640 -- (67,640)
----------- ------------ ------------ ------------
Net cash provided by (used in) operating activities....... 205,753 1,081,997 (2,305,368) 1,385,546
INVESTING ACTIVITIES
Purchases of property and equipment....................... (15,617) (21,040) -- --
Purchase of investments................................... -- (150,000) -- --
----------- ------------ ------------ ------------
Net cash used in investing activities..................... (15,617) (171,040) -- --
FINANCING ACTIVITIES
Proceeds from bank line of credit......................... -- 2,122,245 2,122,245 200,000
Payments on bank line of credit........................... (194,809) (2,374,476) -- (200,000)
Repayment from stockholder................................ 32,538 100,000 100,000 --
----------- ------------ ------------ ------------
Net cash (used in) provided by financing activities....... (162,271) (152,231) 2,222,245 --
Net increase (decrease) in cash and cash equivalents...... 27,865 758,726 (83,123) 1,385,546
Cash and cash equivalents at beginning of the period...... 111,073 138,938 138,938 897,664
----------- ------------ ------------ ------------
Cash and cash equivalents at end of the period............ $ 138,938 $ 897,664 $ 55,815 $ 2,283,210
----------- ------------ ------------ ------------
----------- ------------ ------------ ------------
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid............................................. $ 26,246 $ 57,925 $ 57,227 $ --
----------- ------------ ------------ ------------
----------- ------------ ------------ ------------
Income taxes paid......................................... $ -- $ 581,000 $ 222,000 $ 479,000
----------- ------------ ------------ ------------
----------- ------------ ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES.
F-6
<PAGE>
DUNN COMPUTER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF JANUARY 31, 1997 AND FOR THE THREE MONTHS ENDED
JANUARY 31, 1996 AND 1997 IS UNAUDITED.)
1. ORGANIZATION
Dunn Computer Corporation (the "Corporation") was incorporated on July 27,
1987 under the laws of the Commonwealth of Virginia.
On January 3, 1997, Dunn Computer Corporation (the "Company"), a Delaware
corporation, was formed as a holding company for the stock of Dunn Computer
Corporation, the Virginia corporation. On January 6, 1997, the Board of
Directors and stockholders of the Corporation approved and effected a
2,799.160251 for 1 stock exchange with the Company whereby the holders of the
Corporation's Common Stock would receive 2,799.160251 shares of Common Stock in
the Company for each share of Common Stock in the Corporation. All references in
the accompanying consolidated financial statements as to the number of shares of
Common Stock and per-share amounts have been restated to reflect the stock
exchange. Also, the Company authorized 2,000,000 shares of Preferred Stock with
rights and preferences to be determined by the Board of Directors at a later
date.
The Company is engaged in the business of providing custom computer systems
and related equipment to businesses and government agencies.
The accompanying financial statements as of January 31, 1997 and for the
three months ended January 31, 1996 and 1997 are unaudited, but in the opinion
of the Company's management reflect all adjustments (consisting only of normal
and recurring adjustments) necessary for a fair presentation. The results of
operations for the three month period are not necessarily indicative of the
results that may be expected for the full year ending October 31, 1997.
2. SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less at the time of purchase to be cash equivalents.
INVESTMENTS
At October 31, 1996 and January 31, 1997, investments consisted of shares of
common stock of a privately-held internet company, Worldwide Internet Solutions
Network, Inc. ("WIZnet"), with a cost basis of approximately $150,000. The
Company believes that this carrying amount represents the lower of cost or
market. The Company is accounting for this investment using the cost method
since the Company's investment represents less than 20% of the privately-held
internet company's outstanding stock. The President and Chief Executive Officer
of WIZnet is also on the Company's Board of Directors.
INVENTORY
Inventory is stated at the lower of cost or market as determined by the
first-in first-out (FIFO) method.
INCOME TAXES
The Company provides for income taxes in accordance with the liability
method.
F-7
<PAGE>
DUNN COMPUTER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JANUARY 31, 1997 AND FOR THE THREE MONTHS ENDED
JANUARY 31, 1996 AND 1997 IS UNAUDITED.)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUES
The Company generally recognizes revenues based on shipment of products.
Revenues are earned principally pursuant to various contracts with agencies of
the Federal government and commercial customers. The Company generally does not
require collateral on such contracts. The length of the Company's contracts
generally range from one to three years.
The products sold are generally covered by a warranty for periods ranging
from two to three years. The Company accrues a warranty reserve for revenues
recognized during the year to record estimated costs to provide warranty
services.
Unearned revenue relates to cash received from credit card sales as of
October 31, 1996 for which the related inventory was shipped subsequent to
October 31, 1996.
During the year ended October 31, 1995, the Company had revenues from two
agencies of the Federal government which represented 73% and 12% of total
revenues. During the year ended October 31, 1996, the Company had revenues from
two agencies of the Federal government which represented 22% and 14% of total
revenues. In addition, during 1996, the Company had revenues from one Federal
government prime contractor and one commercial customer which represented 17%
and 16% of total revenues, respectively. During the three month period ended
January 31, 1996, the Company had revenues from one agency of the Federal
government which represented 35% of total revenues and revenues from one
commercial customer which represented 43% of total revenues. During the three
month period ended January 31, 1997, the Company had revenues from two agencies
of the Federal government which represented 33% and 32% of total revenues. In
addition, during the three months ended January 31, 1997, the Company had
revenues from one commercial customer which represented 12% of total revenues.
As of October 31, 1995, accounts receivable from agencies of the Federal
government represented 95% of total accounts receivable. As of October 31, 1996,
accounts receivable from agencies of the Federal government represented 92% of
total accounts receivable. As of January 31, 1996, accounts receivable from
agencies of the Federal government represented 26% of the total accounts
receivable. As of January 31, 1997 accounts receivable from agencies of the
Federal government represented 69% of total accounts receivable, respectively.
EARNINGS PER SHARE
The Company's earnings per share calculations are based upon the weighted
average number of shares of Common Stock outstanding. Pursuant to the
requirements of Securities and Exchange Commission Staff Accounting Bulletin No.
83, options to purchase Common Stock issued at prices below the initial public
offering (the "IPO") price during the twelve months immediately preceding the
contemplated initial filing of the registration statement relating to the IPO,
have been included in the computation of the earnings per share as if they were
outstanding for all periods presented (using the treasury stock method assuming
repurchase of Common Stock at the estimated IPO price). In subsequent periods,
stock options and warrants under the treasury stock method will be included to
the extent that they are dilutive.
F-8
<PAGE>
DUNN COMPUTER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JANUARY 31, 1997 AND FOR THE THREE MONTHS ENDED
JANUARY 31, 1996 AND 1997 IS UNAUDITED.)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
STOCK BASED COMPENSATION
In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation" which is effective for any
complete set of financial statements for any period presented subsequent to
December 15, 1995. SFAS No. 123 allows companies to account for stock-based
compensation under either the new provisions of SFAS No. 123 or the provisions
of APB No. 25, but requires pro forma disclosure in the footnotes to the
consolidated financial statements as if the measurement provisions of SFAS No.
123 had been adopted. The Company intends to continue accounting for its
stock-based compensation in accordance with the provisions of APB No. 25. As
such, the implementation of SFAS No. 123 will not materially impact the
financial position or results of operations of the Company.
3. PROPERTY AND EQUIPMENT
Property and equipment, including leasehold improvements, are stated at
cost. Property and equipment are depreciated and amortized using the
straight-line method over the estimated useful lives of five years. Leasehold
improvements are amortized over the lesser of the related lease term or the
useful life.
Property and equipment consists of the following:
<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
<S> <C>
Computer and office equipment.................................................... $ 69,626
Furniture and fixtures........................................................... 20,663
Leasehold improvements........................................................... 27,424
Vehicles......................................................................... 78,742
-----------
196,455
Less accumulated depreciation and amortization................................... (132,692)
-----------
$ 63,763
-----------
-----------
</TABLE>
4. BANK LINES OF CREDIT
In April 1996, the Company entered into a line of credit agreement with a
bank whereby the Company could borrow up to $2,000,000. Outstanding borrowings
bear interest at prime plus three-fourths of one percent. In December 1996, the
Company drew $200,000 on the line of credit. In January, the Company repaid the
amount. As of October 31, 1996 and January 31, 1997, there were no outstanding
borrowings under this line of credit facility. The line of credit is secured by
all assets of the Company. Under the line of
F-9
<PAGE>
DUNN COMPUTER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JANUARY 31, 1997 AND FOR THE THREE MONTHS ENDED
JANUARY 31, 1996 AND 1997 IS UNAUDITED.)
4. BANK LINES OF CREDIT (CONTINUED)
credit agreement, the Company is required to maintain a net worth of $1,250,000
and at October 31, 1996 and January 31, 1997, the Company is in compliance with
this covenant. The Company's principal stockholders have personally guaranteed
the bank line of credit.
In November 1995, the Company repaid the outstanding portion of a $1,000,000
line of credit facility with a separate bank and subsequently canceled the line
of credit.
5. RELATED PARTY TRANSACTION
Thomas Dunne, the Company's President, and his wife Claudia Dunne, the
Company's Vice President, acquired a building for the purpose of leasing office
space to the Company. In connection with the acquisition of the building, the
Company guaranteed the building's $1 million mortgage. The term of the mortgage
is 25 years. The Company subsequently executed a noncancelable operating lease
agreement with Mr. and Mrs. Dunne. The Company believes that the lease agreement
is on terms no less favorable to the Company than could be obtained from
unaffiliated third parties (see Note 6).
6. LEASE COMMITMENTS
The Company leases office space under a noncancellable operating lease
agreement with two stockholders (see Note 5). The lease agreement terminates in
October 1999, but provides for a five year renewal at the Company's option. Rent
expense under this lease was $144,000 and $154,000, for the years ended October
31, 1995 and 1996, respectively.
Future minimum lease payments under noncancelable operating leases at
October 31, 1996 are as follows:
<TABLE>
<S> <C>
1997.............................................................. $ 179,799
1998.............................................................. 179,242
1999.............................................................. 176,679
2000.............................................................. 5,090
2001.............................................................. 424
---------
Total............................................................. $ 541,234
---------
---------
</TABLE>
7. RECEIVABLE FROM STOCKHOLDER
During fiscal year 1994, one of the Company's principal stockholders
purchased common stock for $100,000 in exchange for a demand note. This demand
note was repaid during December 1995. Another of the Company's principal
stockholders borrowed $32,538 from the Company during 1994 and repaid the amount
during the year ended October 31, 1995.
8. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
F-10
<PAGE>
DUNN COMPUTER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JANUARY 31, 1997 AND FOR THE THREE MONTHS ENDED
JANUARY 31, 1996 AND 1997 IS UNAUDITED.)
8. INCOME TAXES (CONTINUED)
Components of the Company's net deferred tax credit balance are as follows:
<TABLE>
<CAPTION>
OCTOBER 31, JANUARY 31,
1996 1997
----------- -----------
<S> <C> <C>
Deferred tax assets:
Accrued expenses................................................ $ 50,037 $ 50,037
Asset reserves.................................................. 14,000 14,000
----------- -----------
Total deferred assets............................................... 64,037 64,037
Deferred tax credit:
Change from cash to accrual method for tax purposes............. 75,123 66,273
----------- -----------
Net deferred tax credit........................................... $ 11,086 $ 2,236
----------- -----------
----------- -----------
</TABLE>
The components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER THREE MONTHS ENDED
31, JANUARY 31,
---------------------- ----------------------
1995 1996 1996 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Current tax expense:
Federal.............................. $ 188,242 $ 709,195 $ 275,059 $ 288,428
State................................ 35,340 133,081 51,579 54,422
---------- ---------- ---------- ----------
223,582 842,276 326,638 342,850
Deferred tax expense:
Federal.............................. 17,355 (55,800) (4,446) (7,522)
State................................ 3,063 (10,476) (892) (1,328)
---------- ---------- ---------- ----------
20,418 (66,276) (5,338) (8,850)
---------- ---------- ---------- ----------
Total provision for income taxes............. $ 244,000 $ 776,000 $ 321,300 $ 334,000
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The reconciliation of income tax from the statutory rate of 34% is:
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER THREE MONTHS ENDED
31, JANUARY 31,
---------------------- ----------------------
1995 1996 1996 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Tax at statutory rates....................... $ 165,608 $ 685,156 $ 283,734 $ 299,137
Non-deductible expenses...................... 58,675 9,610 2,044 --
State income tax net of federal benefit...... 19,717 81,234 35,522 34,863
---------- ---------- ---------- ----------
$ 244,000 $ 776,000 $ 321,300 $ 334,000
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
9. CONTINGENT LIABILITY
Pulsar Data Systems, a vendor, has filed a lawsuit against the Company
concerning a disputed payable in the amount of $124,200. While the ultimate
outcome of these matters is not known, the Company
F-11
<PAGE>
DUNN COMPUTER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JANUARY 31, 1997 AND FOR THE THREE MONTHS ENDED
JANUARY 31, 1996 AND 1997 IS UNAUDITED.)
9. CONTINGENT LIABILITY (CONTINUED)
intends to vigorously dispute the claim. The Company believes an adequate
provision for the claim has been made in the accompanying consolidated financial
statements as of October 31, 1996 and January 31, 1997.
10. RETIREMENT PLANS
401(K) PLAN
Effective April 1, 1995, the Company adopted a 401(k) Plan (the "Plan").
Employees are eligible to participate after completing six months of service and
attaining age 18. Employees can defer up to 15 percent of compensation. Employee
contributions are subject to Internal Revenue Service limitations. All employees
who contribute to the Plan are eligible to share in discretionary Company
matching contribution. During the years ended October 31, 1995 and 1996, the
Company contributed $4,469 and $3,300, respectively, to the Plan.
DEFINED BENEFIT PLAN
During the fiscal year ended October 31, 1995, the Company implemented a
defined benefit plan (the "Pension Plan") covering substantially all salaried
employees. The Pension Plan benefits are based on years of service and the
employee's compensation. The Company's funding policy is to annually contribute
amounts sufficient to meet minimum funding requirements set forth in the
Employee Retirement Income Security Act of 1974. Contributions are intended to
provide not only for benefits attributed to service to date, but also for those
expected to be earned in the future. The assets of the Pension Plan are invested
in money markets and corporate debt and equity instruments. The Company
contributed, in the aggregage, approximately $135,000 for the Pension Plan years
ending October 31, 1995 and 1996, which met the minimum funding requirements
under ERISA.
On January 6, 1997, the Company amended the Pension Plan to change the
benefits to be paid out after retirement from 100% to 40% of its initial
liability. This will result in a reduction of the projected benefit obligation
by $150,000. The Company believes that the pension expense will be reduced by
approximately $50,000 for fiscal 1997.
F-12
<PAGE>
DUNN COMPUTER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION AS OF JANUARY 31, 1997 AND FOR THE THREE MONTHS ENDED
JANUARY 31, 1996 AND 1997 IS UNAUDITED.)
DEFINED BENEFIT PLAN (CONTINUED)
The following table sets forth the Pension Plan's funded status as reported
on activity, and amounts recognized in the Company's consolidated financial
statements:
<TABLE>
<CAPTION>
OCTOBER 31,
1996
-----------
<S> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits of ($238,619).......... $ (320,973)
-----------
-----------
Projected benefit obligation..................................................... (320,973)
Pension Plan assets at fair value................................................ 168,336
-----------
Funded status--projected benefit obligation in excess of fair value of Pension
Plan assets.................................................................... $ (152,637)
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED
OCTOBER 31,
---------------------
1995 1996
--------- ----------
<S> <C> <C>
Net periodic pension cost:
Service cost........................................................... $ 54,945 $ 59,066
Interest cost.......................................................... 12,810 17,892
Actual return on assets................................................ -- (33,982)
Net amortization and deferral.......................................... 6,832 38,127
--------- ----------
Total net periodic pension cost........................................ $ 74,587 $ 81,103
--------- ----------
--------- ----------
</TABLE>
Key assumptions used in the actuarial valuation were:
<TABLE>
<CAPTION>
OCTOBER 31,
1996
---------------
<S> <C>
Weighted average discount note................................................... 7.5%
Rate of return on assets:
Pre-retirement............................................................... 8.0%
Post-retirement.............................................................. 8.0%
</TABLE>
11. STOCK OPTION PLAN
On January 6, 1997, the Company adopted the 1997 Stock Option Plan (the
"Option Plan") which permits the Company to grant up to 600,000 options to
officers, directors and employees who contribute materially to the success of
the Company. During January 1997, the Company's Board of Directors have granted
295,000 options to purchase Common Stock to employees of the Company at $4.15
per share. These options vest over a stated period of time not to exceed four
years. All options were granted at a price which the Board of Directors believed
approximated the fair market value of the Common Stock at the date of grant. The
contractual term of the option is ten years. As of January 31, 1997, there were
305,000 options available for future grant.
F-13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER, SOLICITATION OR SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS
PROSPECTUS.
------------------------
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 8
Use of Proceeds................................ 14
Dividend Policy................................ 14
Capitalization................................. 15
Dilution....................................... 16
Selected Financial Data........................ 17
Management's Discussion and
Analysis of Financial Condition and
Results of Operations......................... 18
Business....................................... 22
Management..................................... 31
Principal Stockholders......................... 34
Certain Transactions........................... 35
Description of Securities...................... 36
Shares Eligible for Future Sale................ 38
Underwriting................................... 39
Legal Opinions................................. 41
Experts........................................ 41
Additional Information......................... 41
Indemnification for Securities Act
Liabilities................................... 42
Financial Statements........................... F-1
</TABLE>
------------------------
UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
DUNN COMPUTER
CORPORATION
1,000,000 SHARES OF COMMON STOCK
---------------------
PROSPECTUS
---------------------
[LOGO]
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, among other things, and
subject to certain conditions, authorizes the Company to indemnify its officers
and directors against certain liabilities and expenses incurred by such persons
in connection with claims made by reason of their being such an officer or
director. The restated Certificate of Incorporation and By-laws of the Company
provide for indemnification of its officers and directors to the full extent
authorized by law.
Reference is made to the Underwriting Agreement, the proposed form of which
is filed as Exhibit 1.1, pursuant to which the Underwriter agrees to indemnify
the directors and certain officers of the Registrant and certain other persons
against certain civil liabilities.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is a statement of the estimated expenses to be paid by the
Company in connection with the issuance and distribution of the securities being
registered:
<TABLE>
<S> <C>
SEC Registration Fee........................................... $ 1,939.39
NASD Filing Fee................................................ 1,140.00
NASDAQ Filing Fee.............................................. 25,000.00
Printing Engraving Expenses.................................... 75,000.00
Legal Fees and Expenses........................................ 125,000.00
Accounting Fees and Expenses................................... 60,000.00
Blue Sky Fees and Expenses..................................... 17,500.00
Transfer Agent and Registrar Fees and Expenses................. 3,500.00
Non-accountable expense allowance.............................. 150,000.00
Miscellaneous.................................................. 15,920.61
----------
Total.................................................... $475,000.00
----------
----------
</TABLE>
- ------------------------
* estimate
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
During the past three years, the Company has sold securities to one person,
as described below. There was no underwriters involved in the transaction and
there was no underwriting discounts or commissions paid in connection therewith,
except as disclosed below. The issuances of these securities were considered to
be exempt from registration under Section 4(2) of the Act, as amended, and the
regulations promulgated thereunder. The purchaser of the securities in such
transaction represented his intention to acquire the securities for investment
only and not with a view to or for sale in connection with any distribution
thereof and appropriate legends were affixed to the certificates for the
securities issued in such transaction. The purchaser of the securities in such
transaction had adequate access to information about the Registrant.
In July, 1994, John Vazzana, an officer of the Company, acquired an
aggregate of 428.7 shares of the Virginia corporation's Common Stock for an
aggregate consideration of $100,000. These shares were exchanged for 1,200,000
shares of the Company's Common Stock pursuant to the Share Exchange Agreement.
II-1
<PAGE>
ITEM 27. EXHIBITS
<TABLE>
<C> <S>
1.1* Form of Underwriting Agreement.
1.2* Form of Selected Dealers Agreement.
3.1* Articles of Incorporation of the Registrant.
3.2* Articles of Incorporation and amendments thereto of Dunn Computer
Corporation, a Virginia Corporation.
3.3* By-laws, as amended, of Dunn Computer Corporation, a Virginia Corporation.
4.1 Form of Financial Advisory and Investment Banking Agreement with
Underwriter.
4.2* Form of Underwriter's Warrants.
4.3 Form of Common Stock Certificate.
5.1* Opinion of Gersten, Savage, Kaplowitz, Fredericks & Curtin, LLP.
10.1* 1997 Stock Option Plan.
10.2* GSA Schedule.
10.3* Share Exchange Agreement dated January 6, 1997 by and between the Company
and Thomas P. Dunne, John Vazzana, and Claudia Dunne.
10.4* Agreement dated November 21, 1995 by and between GCH Systems, Inc. and the
Company regarding Lockheed.
10.5 Agreement dated March 25, 1997 by and between the Company and the Social
Security Administration.
10.6 Agreement dated June 12, 1995 by and between the Company and the Office of
the U.S. Courts.
10.7 Agreement dated September 29, 1994 by and between the Company and the
Health Care Finance Administration.
11.1* Statement Regarding Computation of Earnings Per Share.
21.1* List of Subsidiaries of Registrant.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2* Consent of Gersten, Savage, Kaplowitz, Fredericks & Curtin, LLP.
(incorporated into Exhibit 5.1)
23.3 Consent of Federal Computer Week.
27.0* Financial Data Schedule.
99.1 Form of Employment Agreement by and between the Company and John D.
Vazzana.
99.2 Form of Employment Agreement by and between the Company and Thomas P.
Dunne.
</TABLE>
- ------------------------
* Previously Filed.
II-2
<PAGE>
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the small business
issuer pursuant to any charter provision, by-law contract arrangements statute,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the small business issuer will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned small business issuer hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any Prospectus required by section 10(a)(3) of the
Act;
(ii) To reflect in the Prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to suit information in the registration statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the Offering of
such securities at that time shall be deemed to be the initial bona fide
Offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the Offering.
(4) For determining any liability under the Act, treat the information
omitted from the form of Prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of Prospectus
filed by the small business issuer under Rule 424(b)(1), or (4) or 497(h),
under the Act as part of this registration statement as of the time the
Commission declared it effective.
(5) For determining any liability under the Act, treat each
post-effective amendment that contains a form of Prospectus as a new
registration statement at that time as the initial bona fide Offering of
those securities.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Act, the Registrant certifies that it
has reasonable grounds to believe that it meets all of the requirement for
filing on Form SB-2 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York on April 4, 1997.
DUNN COMPUTER CORPORATION
<TABLE>
<S> <C> <C> <C> <C>
By: /s/ THOMAS P. DUNNE By: /s/ JOHN D. VAZZANA
-------------------------------------- --------------------------------------
Thomas P. Dunne John D. Vazzana
Chief Financial Officer/Principal
Accounting Officer
</TABLE>
Pursuant to the requirements of the Act, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
/s/ THOMAS P. DUNNE Chairman, Chief Executive
- ------------------------------ Officer and President April 4, 1997
Thomas P. Dunne
/s/ JOHN D. VAZZANA Executive Vice President,
- ------------------------------ Chief Financial Officer, April 4, 1997
John D. Vazzana and Director
* Vice President and Director
- ------------------------------ April 4, 1997
Claudia N. Dunne
* Director
- ------------------------------
VADM E. A. Burkhalter, Jr., April 4, 1997
USN
/s/ DANIEL SINNOTT Director
- ------------------------------ April 4, 1997
Daniel Sinnot
<TABLE>
<S> <C> <C>
*By: /s/ THOMAS P. DUNNE
--------------------------------------
Thomas P. Dunne
Attorney-in-Fact
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS PAGE NO.
- ------ -----------
<C> <S> <C>
1.1* Form of Underwriting Agreement............................................
1.2* Form of Selected Dealers Agreement........................................
3.1* Articles of Incorporation of the Registrant...............................
3.2* Articles of Incorporation and amendments thereto of Dunn Computer
Corporation, a Virginia Corporation.....................................
3.3* By-laws, as amended, of Dunn Computer Corporation, a Virginia
Corporation.............................................................
4.1 Form of Financial Advisory and Investment Banking Agreement with
Underwriter.............................................................
4.2* Form of Underwriter's Warrants............................................
4.3 Form of Common Stock Certificate..........................................
5.1* Opinion of Gersten, Savage, Kaplowitz, Fredericks & Curtin, LLP...........
10.1* 1997 Stock Option Plan....................................................
10.2* GSA Schedule..............................................................
10.3* Share Exchange Agreement dated January 6, 1997 by and between the Company
and Thomas P. Dunne, John Vazzana, and Claudia Dunne....................
10.4* Agreement dated November 21, 1995 by and between GCH Systems, Inc. and the
Company regarding Lockheed..............................................
10.5 Agreement dated March 25, 1997 by and between the Company and the Social
Security Administration.................................................
10.6 Agreement dated June 12, 1995 by and between the Company and the Office of
the U.S. Courts.........................................................
10.7 Agreement dated September 29, 1994 by and between the Company and the
Health Care Finance Administration......................................
11.1* Statement Regarding Computation of Earnings Per Share.....................
21.1* List of Subsidiaries of Registrant........................................
23.1 Consent of Ernst & Young LLP, independent auditors........................
23.2* Consent of Gersten, Savage, Kaplowitz, Fredericks & Curtin, LLP.
(incorporated into Exhibit 5.1).........................................
23.3 Consent of Federal Computer Week..........................................
27.0* Financial Data Schedule...................................................
99.1 Form of Employment Agreement by and between the Company and John D.
Vazzana.................................................................
99.2 Form of Employment Agreement by and between the Company and Thomas P.
Dunne...................................................................
</TABLE>
- ------------------------
* Previously Filed.
<PAGE>
EXHIBIT 4.1
DRAFT
FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the ____ day of
________________, 1997 between Network 1 Financial Securities, Inc., a New
Jersey corporation (sometimes referred to as "Network 1" and sometimes referred
to as the "Consultant") and Dunn Computer Corporation, a Delaware corporation
(the "Company").
In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. PURPOSE: The Company hereby engages Network 1 for the term specified
in Paragraph 2 hereof to render advice to the Company as an investment banker
relating to financial and similar matters upon the terms and conditions set
forth herein.
2. TERM: Except as otherwise specified in Paragraph 4 hereof, this
Agreement shall be effective from the Closing Date, as defined in the
Underwriting Agreement of even date between Network 1 and the Company, and for
twenty-four (24) months thereafter.
3. DUTIES OF NETWORK 1: During the term of this Agreement, Network 1
shall, upon the request of the Company, provide the Company with corporate
finance and related financial advisory services, advice with respect to
potential acquisitions and other business transactions and advice with respect
to stockholder relations matters. All obligations of the Consultant contained
herein shall be subject to the Consultant's availability to perform such
services and the amount of notice received from the Company.
<PAGE>
DRAFT
The Consultant shall devote such time and effort to the performance of its
duties hereunder as the Consultant shall determine is reasonably necessary. The
Consultant may look to such others for such factual information, investment
recommendations, economic advice and/or research, upon which to base its advice
to the Company hereunder, as it shall deem appropriate. The Company recognizes
that Network 1 now renders and may continue to render financial and other
advisory services to other individuals and entities which may or may not conduct
activities similar to those of the Company and acknowledges that Network 1 shall
be free to render such advice and to perform such services for these and other
individuals and entities.
4. COMPENSATION:
4.1 In consideration for the services rendered by Network 1 to the
Company pursuant to this Agreement (and in addition to the expenses provided for
in Paragraph 5 hereof), the Company shall pay Network 1 a non-refundable fee of
Sixty Thousand ($60,000.00) Dollars, payable in advance, upon the execution of
this Agreement. This fee represents a monthly fee of Two Thousand Five Hundred
($2,500.00) Dollars throughout the term of this Agreement. In addition, if any
Transaction (as defined below) occurs during the term of this Agreement or
within twelve months thereafter, the Company shall pay fees to Network 1 as
follows:
- 2 -
<PAGE>
DRAFT
CONSIDERATION FEE
First $1,000,000 5% of First $1,000,000
Second $1,000,000 4% of First $1,000,000
Third $1,000,000 3% of First $1,000,000
Fourth $1,000,000 2% of First $1,000,000
Consideration in excess 1% of Consideration in
of the fourth $1,000,000 excess of fourth $1,000,000
For purposes of this Agreement, a "Transaction" shall mean (i) any transaction
originated by Network 1, other than in the ordinary course of trade or business
of the Company, whereby, directly or indirectly, control of, or a material
interest in, the Company and its subsidiaries or the business or assets of the
Company and its subsidiaries, is transferred for Consideration, or (ii) any
transaction originated by Network 1 whereby the Company acquires any other
company, or the assets of any other company or an interest in any other company;
and "Consideration" shall mean the total market value on the day of the closing
of stock, cash, assets and all other property (real or personal) exchanged or
received, directly or indirectly by the Company or any of its security holders
in connection with any Transaction. Any co-broker retained by Network 1 shall
be paid by Network 1. All Transaction fees to be paid pursuant to this
Agreement, except as otherwise specified, are due and payable to Network 1 in
cash at the closing or closings of a Transaction. In the event that this
Agreement shall not be renewed or is terminated for any reason, notwithstanding
any such non-renewal or termination, Network 1 shall be entitled to the entire
fee provided in this Paragraph 4, for any Transaction for which the discussions
were initiated during the term of this
- 3 -
<PAGE>
DRAFT
Agreement and which is consummated within a period of twelve months after non-
renewal or termination of this Agreement. Nothing herein shall impose any
obligation on the part of the Company to enter into any Transaction.
4.2 In the event Network 1 originates a line of credit with a lender
or a corporate partner, the Company and Network 1 will mutually agree on a
satisfactory fee and the terms of payment of such fee. In the event Network 1
introduces the Company to a joint venture partner or customer and sales develop
as a result of the introduction, the Company agrees to pay a fee to Network 1 of
five (5%) percent of total sales generated directly from this introduction
during the first two years following the date of the first sale. Total sales
shall mean gross receipts less any applicable refunds, returns, allowances,
credits, taxes and shipping charges and monies paid by the Company by way of
settlement or judgment arising out of claims made by or threatened against the
Company. Commission payments shall be paid on the 15th day of each third month
following the receipt of customers' payments. In the event any adjustments are
made to the total sales after the commission has been paid, the Company shall be
entitled to an appropriate refund or credit against future payments under this
Agreement.
4.3 All fees to be paid pursuant to this Agreement, except as
otherwise specified, are due and payable to Network 1 in cash or company check
at the closing or closings of any Transaction specified in Paragraph 4. In the
event that this Agreement shall not be renewed or if terminated for any reason,
notwithstanding any such non-renewal or termination, Network 1 shall be entitled
to a
- 4 -
<PAGE>
DRAFT
full fee as provided under Paragraphs 4 and 5 hereof, for any Transaction for
which the discussions were initiated during the term of this Agreement and which
is consummated within a period of twelve months after non-renewal or termination
of this Agreement. Nothing herein shall impose any obligation on the part of
the Company to enter into any Transaction.
5. EXPENSES OF NETWORK 1: In addition to the fees payable hereunder and
regardless of whether any Transaction is proposed or consummated, the Company
shall reimburse Network 1 for the reasonable fees and disbursements of Network
1's counsel and Network 1's reasonable travel and out-of-pocket expenses
incurred in connection with the services performed by Network 1 pursuant to this
Agreement and at the request of the Company, including without limitation,
hotels, food and associated expenses and long-distance telephone calls.
6. LIABILITY OF NETWORK 1:
6.1 In furnishing the Company with advice and other services as
herein provided, neither Network 1 nor any officer, director or agent thereof
shall be liable to the Company or its creditors for any acts and/or omissions
attributable to or arising from such services, including, but not limited to,
errors of judgment in connection therewith, but not including intentional or
willful misconduct by the Consultant in the performance of such services.
6.2 It is further understood and agreed that Network 1 may rely upon
information furnished to it reasonably believed to be accurate and reliable and
that, except as herein provided, Network 1 shall not be accountable for any loss
suffered by the
- 5 -
<PAGE>
DRAFT
Company by reason of the Company's action or inaction on the basis of any
advice, recommendation or approval of Network 1, its partners, employees or
agents.
6.3 The Company acknowledges that all opinions and advice (written or
oral) given by Network 1 to the Company in connection with Network 1's
engagement are intended solely for the benefit and use of the Company in
considering the transaction to which they relate, and the Company agrees that no
person or entity other than the Company shall be entitled to make use of or rely
upon the advice of Network 1 to be given hereunder, and no such opinion or
advice shall be used for any other purpose or reproduced, disseminated, quoted
or referred to at any time, in any manner or for any purpose, nor may the
Company make any public references to Network 1, or use Network 1's name in any
annual reports or any other reports or releases of the Company without Network
1's prior written consent.
6.4 The Company acknowledges that Network 1 makes no commitment
whatsoever as to making a market in the Company's securities or to recommending
or advising its clients to purchase the Company's securities. Research reports
or corporate finance reports that may be prepared by Network 1 will, when and if
prepared, be done solely on the merits based upon an analysis performed by
Network 1 and its corporate finance personnel.
7. COMPANY INFORMATION:
7.1 The Company shall furnish to the Consultant all data, material
and other information relevant to the performance by the Consultant of its
obligations under this Agreement, or particular projects as to which the
Consultant is acting as
- 6 -
<PAGE>
DRAFT
advisor, which will permit the Consultant to know all facts material to the
advice to be rendered, and all material or information reasonably requested by
the Consultant. The Company acknowledges and agrees that in performing its
services under this engagement, Network 1 may rely upon the data, material and
other information supplied by the Company without independently verifying the
accuracy, completeness or veracity of same. In the event that the Company fails
or refuses to furnish any such data, material or information reasonably
requested by the Consultant, and thus prevents or impedes the Consultant's
performance hereunder, any inability of the Consultant to perform shall not be a
breach of its obligations hereunder.
7.2 Except as contemplated by the terms hereof or as required by
applicable law, Network 1 shall keep confidential all non-public information
provided to it by the Company and shall not disclose such information to any
third party without the Company's prior written consent, other than to such of
its employees and advisors as Network 1 determines in its sole judgment need to
have access thereto. Notwithstanding the foregoing, the Consultant shall not be
required to maintain confidentiality with respect to information (i) which is or
becomes part of the public domain; (ii) of which it had independent knowledge
prior to disclosure; (iii) which comes into the possession of the Consultant or
its employees or agents in the normal and routine course of its own business
from and through independent non-confidential sources; or (iv) which is required
to be disclosed by the Consultant pursuant to legal process or in accordance
with governmental or regulatory requirements. If the Consultant is requested or
required (by oral
- 7 -
<PAGE>
DRAFT
questions, interrogatories, requests for information or document subpoenas,
civil investigative demands, or similar process) to disclose any confidential
information supplied to it by the Company, or the existence of other
negotiations in the course of its dealings with the Company or its
representatives, the Consultant shall, unless prohibited by law, promptly notify
the Company of such request(s) so that the Company may seek an appropriate
protective order.
8. INDEMNIFICATION: The Company agrees to indemnify and hold harmless
the Consultant, its partners, employees, agents, representatives and controlling
persons (and the officers, directors, employees, agents, representatives and
controlling persons of each of them) from and against any and all losses,
claims, damages, liabilities, costs and expenses (and all actions, suits,
proceedings or claims in respect thereof) and any legal or other expenses in
giving testimony or furnishing documents in response to a subpoena or otherwise
(including, without limitation, the cost of investigating, preparing or
defending any such action, suit, proceeding or claim, whether or not in
connection with any action, suit, proceeding or claim in which the Consultant is
a party), as and when incurred, directly or indirectly, caused by, relating to,
based upon or arising out of the Consultant's service pursuant to this
Agreement. The Company further agrees that the Consultant shall incur no
liability to the Company or any other party on account of this Agreement or any
acts or omissions arising out of or related to the actions of the Consultant
relating to this Agreement or the performance or failure to perform any services
under this Agreement, except for the Consultant's intentional or
- 8 -
<PAGE>
DRAFT
willful misconduct. The obligations of the Company under the Section shall
survive the termination of this Agreement.
9. INDEPENDENT CONTRACTOR: Network 1 shall perform its services
hereunder as an independent contractor and not as an employee of the Company or
an affiliate thereof. It is expressly understood and agreed to by the parties
hereto that Network 1 shall have no authority to act for, represent or bind the
Company or any affiliate thereof in any manner, except as may be agreed to
expressly by the Company in writing from time to time.
10. MISCELLANEOUS:
10.1 This Agreement between the Company and Network 1 constitutes the
entire agreement and understanding of the parties hereto and supersedes any and
all previous agreements and understandings, whether oral or written, between the
parties with respect to the matters set forth herein.
10.2 Any notice or communication permitted or required hereunder shall
be in writing and shall be deemed sufficiently given if hand-delivered or sent
(i) postage prepaid by registered mail, return receipt requested, or (ii) by
facsimile to the respective parties as set forth below, or to such other address
as either party may notify the other in writing:
If to the Company to: Dunn Computer Corporation
1306 Squire Court
Sterling, Virginia 20166
Telecopier: (703)450-0406
- 9 -
<PAGE>
DRAFT
with a copy to: Arthur S. Marcus, Esquire
Gersten Savage Kaplowitz & Curtin, LLP
575 Lexington Avenue
New York, New York 1022
Telecopier: (212)980-5192
If to Network 1, to: Network 1 Financial Securities, Inc.
One Financial Galleria
2 Bridge Avenue
Red Bank, New Jersey 07701
Attn: Virginia Sourlis, Esquire
Telecopier: (908)758-6671
with a copy to: Michael P. Weiner, Esquire
Stark & Stark
P.O. Box 5315
Princeton, New Jersey 08543-5315
Telecopier: (909)896-0629
10.3 This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors, legal
representatives and assigns.
10.4 This Agreement may be executed in any number of counterparts,
each of which together shall constitute one and the same original document.
10.5 No provision of this Agreement may be amended, modified or
waived, except in a writing signed by all of the parties hereto.
10.6 This Agreement shall be construed in accordance with and governed
by the laws of the State of New Jersey, without giving effect to conflict of law
principles. The parties hereby agree that any dispute which may arise between
them arising out of or in connection with this Agreement shall be adjudicated
before a court located in Monmouth County, New Jersey, and they hereby submit to
the exclusive jurisdiction of the courts of the State of New Jersey and of the
Federal District Court for the District of New Jersey with respect to any action
or legal proceeding commenced
- 10 -
<PAGE>
DRAFT
by any party, and they irrevocably waive any objection they now or hereafter may
have respecting the venue of any such action or proceeding brought in such a
court or respecting the fact that such court is an inconvenient forum, relating
to or arising out of this Agreement, and consent to the service of process in
any such action or legal proceeding by means of registered or certified mail,
return receipt requested, in care of the address set forth in Section 10.2
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
NETWORK 1 FINANCIAL SECURITIES, INC.
By:
-----------------------------------
Name:
Title:
DUNN COMPUTER CORPORATION
By:
-----------------------------------
Name:
Title:
- 11 -
<PAGE>
EXHIBIT 4.3
[LOGO]
NUMBER SHARES
DC
COMMON STOCK DUNN COMPUTER CORPORATION COMMON STOCK
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE CUSIP 265764 10 0
THIS IS TO CERTIFY THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, $.001 PAR VALUE PER
SHARE, OF
DUNN COMPUTER CORPORATION
(hereinafter called the ``Corporation'') transferable on the books of the
Corporation by the registered holder hereof in person or by duly authorized
attorney, upon surrender of this certificate properly endorsed.
This certificate and the shares represented hereby are issued and shall be
held subject to all of the provisions of the Certificate of Incorporation, as
amended, of the Corporation (a copy of which is on file with the Transfer Agent)
to all of which the holder of this certificate, by acceptance hereof, assents.
This certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated
[COMPANY SEAL
SECRETARY PRESIDENT
COUNTERSIGNED AND REGISTERED:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
(JERSEY CITY, N.J.)
TRANSFER AGENT
AND REGISTRAR
BY
AUTHORIZED OFFICER
<PAGE>
DUNN COMPUTER CORPORATION
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS
A COPY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF,
WHICH THE CORPORATION IS AUTHORIZED TO ISSUE, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST
MAY BE MADE TO THE CORPORATION OR THE TRANSFER AGENT.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR
DESTROYED THE COMPANY WILL REQUIRE A BOND OF INDEMNITY
AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM-as tenants in common UNIF GIFT MIN ACT-_________ Custodian____________
(Cust) (Minor)
TEN ENT-as tenants by the entireties
under Uniform Gifts to Minors
JT TEN -as joint tenants with right of Act _____________
survivorship and not as tenants (State)
in common
Additional abbreviations may also be used though not in the above list.
For value received,__________________________________________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
Please print or typewrite name and address including postal zip code of assignee
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_______________________________________________________________________________________________________Shares
represented by the within Certificate, and do hereby irrevocably constitute and appoint
_____________________________________________________________________________________________________Attorney
to transfer the said shares on the books of the within-named Corporation with full power of
substitution in the premises.
Dated, _______________________________
____________________________________________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER.
</TABLE>
Signature(s) Guaranteed:
__________________________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
<PAGE>
BPA Number 0440-97-29988
BLANKET PURCHASE AGREEMENT
Pursuant to GSA Federal Supply contract number GS35F4085D, Blanket Purchase
Agreements, the Contractor agrees to the following terms of a Blanket Purchase
Agreement (BPA) EXCLUSIVELY WITH THE SOCIAL SECURITY ADMINISTRATION (SSA).
1. Multi-Media Workstations that can be ordered under this BPA are provided at
Attachment No. 1, along with the configurations/specifications and terms and
conditions. All orders placed against this BPA are subject to the terms and
conditions provided at Attachment I.
ITEM UNIT COST
166Mhz Pentium Multi Media Workstations $1,682.00
(NOTE: During the term of this BPA, all price reductions in Dunn's GSA schedule
will automatically reduce the unit cost of the workstations.)
2. Delivery:
Delivery schedule/dates and their respective destinations will be listed on
each order placed against this BPA.
3. The Government estimates, but does not guarantee, that the quantity of
workstations to be purchased by this BPA shall not exceed 2,360.
4. This BPA does not obligate any funds.
5. This BPA expires on March 31, 1999 - the end of the Federal Supply Schedule
(FSS) contract period.
6. Contracting Officers from the Office of Acquisition and Grants (OAG) are
hereby authorized to place orders under this BPA. Each order will be
associated with a "call number" issued by OAG.
7. Orders will be placed against this BPA via credit cards or paper (delivery
orders).
8. Unless otherwise agreed to, all deliveries under this BPA must be
accompanied by delivery tickets or sales slips that must contain the
following information as a minimum:
(a) Name of contractor;
(b) Contract Number;
(c) BPA Number;
(d) Model number or National Stock Number (NSN);
<PAGE>
(e) Serial Number;
(f) Purchase Order (Delivery Order) Number;
(g) Date of Purchase;
(h) Quantity, unit price, and extension of each item (unit prices and
extensions need not be shown when incompatible with the use of automated
systems; provided,that the invoice is itemized to show the information);
and
(I) Date of shipment.
9. The requirements of a proper invoice are as specified in Dunn's Federal
Supply Contact. Invoices will be submitted to the address specified in the
purchase/delivery order issued against this BPA.
10. The terms and conditions included in this BPA apply to all purchases made
pursuant to it. In the event of an inconsistency between the provisions of
this BPA and the Contractor's invoice, the provisions of this BPA shall take
precedence.
*IMPORTANT - A new feature of the Federal Supply Schedules Program permits
contractors to offer price reductions in accordance with commercial
practice.
<PAGE>
<TABLE>
<S> <C> <C>
Form Approved
Vendor Original OMB 0990-0115
- ---------------------------------------------------------------------------------------------------------------------------------
ORDER FOR SUPPLIES OR SERVICES PAGE OF PAGES
- ---------------------------------------------------------------------------------------------------------------------------------
IMPORTANT: Mark all packages and papers with contract and/or order numbers. 1 2
- ---------------------------------------------------------------------------------------------------------------------------------
1. DATE OF ORDER 2. CONTRACT NO. (if any) 3. ORDER NO. 4. REQUISITION/REFERENCE NO.
03/25/97 GS35F4085D 0440-97-29984 4210-97-0157/00
- ---------------------------------------------------------------------------------------------------------------------------------
5. ISSUING OFFICE (ADDRESS CORRESPONDENCE TO) 6. SHIP TO: (CONSIGNEE AND ADDRESS, ZIP CODE)
SOCIAL SECURITY ADMINISTRATION SOCIAL SECURITY ADMINISTRATION
OFFICE OF ACQUISITION AND GRANTS COMPUCOM SYSTEMS, INC.
1710 Gwynn Oak Avenue 1225 FOREST PARK
Baltimore, Maryland 21207 SUITE 500
PAULSBORO, NJ 08066
Attn: RITA CARTER SHIP VIA:
- ---------------------------------------------------------------------------------------------------------------------------------
7. TO: CONTRACTOR (NAME, ADDRESS AND ZIP CODE) 8. TYPE OF ORDER
/ / A. PURCHASE - Reference your ........................
DUNN COMPUTER CORPORATION
1306 SQUIRE COURT Please furnish the following on the terms and cond-
STERLING, VA 20164 itions specified on both sides of this order and on the
attached sheets, if any, including delivery as indi-
cated. This purchase is negotiated under authority of:
/X/ B. DELIVERY - Except for biling instructions on the
reverse, this delivery order is subject to instructions
contained on this side only of this form and is issued
subject to the terms and conditions of the above-numbered
CHARLES J. SPENCE: (703) 450-0400 contract.
- ---------------------------------------------------------------------------------------------------------------------------------
9. ACCOUNTING AND APPROPRIATION DATA 10. REQUISITIONING OFFICE
SOCIAL SECURITY ADMINISTRATION
28-8704, Salaries and Expenses, SSA, 1997 11. BUSINESS CLASSIFICATION (CHECK APPROPRIATE BOX (ES))
CAN: 4004210 OTHER DIS-
SOC: 319F / / SMALL / / THAN / / ADVAN- / / WOMEN-
IFAS#: S205205B0 SMALL TAGED OWNED
- ---------------------------------------------------------------------------------------------------------------------------------
12. F.O.B. POINT 14. GOVERNMENT B/L NO. 15. DELIVER TO F.O.B. POINT 16. DISCOUNT TERMS
DESTINATION ON OR BEFORE (Date)
NET 30 DAYS
- ---------------------------------------------------------------------------------------------------------------------------------
13. PLACE OF INSPECTION AND ACCEPTANCE
DESTINATION 04/24/97
- ---------------------------------------------------------------------------------------------------------------------------------
17. SCHEDULE (SEE REVERSE FOR REJECTIONS)
- ---------------------------------------------------------------------------------------------------------------------------------
ITEM NO. SUPPLIES OR SERVICES QUANTITY UNIT UNIT AMOUNT QUANTITY
ORDERED PRICE ACCEPTED
(A) (B) (C) (D) (E) (F) (G)
- ---------------------------------------------------------------------------------------------------------------------------------
PSC 7025
Please indicate the Government's order number on the
outside of each shipping container. Specific delivery
requirements will be provided by the Government at a
later date.
1 PENTIUM P166Mhz Multi-Media Workstation. Configuration, 956.000 EA 1,458.000 1,393,848.000
specifications and terms and conditions are provided for
at attachment 1.
2 Factory installed, 32MB RAM Upgrade. With upgrade, basic 956.000 EA 186.000 177,816.000
configuration shall have 2 ea 32MB SIMMs leaving at least
two more open slots.
3 Factory installed, 256 L2 Cache upgrade resulting in basic 956.000 EA 38.000 36,328.000
configuration having 512 L2 cache with Intel chipset.
- ---------------------------------------------------------------------------------------------------------------------------------
18. SHIPPING POINT 19. GROSS SHIPPING WEIGHT 20. INVOICE NO. 17(H) TOT.
SEE BILLING 0.00 (CONT.
INSTRUCTIONS PAGES)
ON 21. MAIL INVOICE TO: (INCLUDE ZIP CODE)
REVERSE 17(I).
SSA, OFFICE OF FINANCE, P.O. BOX 47, IMPORTANT 1,607,992 GRAND
BALTIMORE, MD 21235 TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
22. UNITED STATES OF AMERICA 23. NAME (TYPED)
BY (SIGNATURE) /s/ Linda L. Phipps LINDA L. PHIPPS
TITLE: CONTRACTING/ORDERING OFFICER
- ---------------------------------------------------------------------------------------------------------------------------------
NSN 7540_01_152_8083 50347-101 OPTIONAL FORM 347 (REV. 6/95)
PRESCRIBED BY GSA/FAR 48 CFR 53.213(E)
</TABLE>
<PAGE>
BLOCK 17. SCHEDULE (CONTINUE) Page 2 of 2 Pages
Date of order: 03/25/97
Contract No: GS35F4085D
Order No: 0440-97-29984
<TABLE>
<CAPTION>
QUANTITY UNIT
ITEM SUPPLIES OR SERVICES ORDERED UNIT PRICE AMOUNT
- ---- ------------------------------------------------------- -------- ---- ----- ------
<S> <C> <C> <C> <C> <C>
4 Set of 200 Master Keys 1.000 LOT 0.000 0.000
Exhibit I is attached and incorporated in this order.
Direct procurement questions to: RITA CARTER
(410) 965-8789
</TABLE>
<PAGE>
[SOCIAL SECURITY ADMINISTRATION LOGO]
SOCIAL SECURITY
S1QA3
Dunn Computer Corporation
Attention: Mr. Charles J. Spence
1306 Squire Court
Sterling, VA 20166
Dear Mr. Spence:
The purpose of this letter is to document agreements reached relative to
Delivery Order 0440-97-29984 and Blanket Purchase Agreement (BPA) No.
0440-97-29988. Specifically, the following represents either agreed to changes
in the government's requirement, as reflected in the above documents, or
promises contained in Dunn's responses to the Government's requirements, which
are also incorporated into the above cited document(s).
Accordingly, the following information is hereby provided:
REFERENCE - SPECIFICATIONS:
- The specifications of both documents have been revised to reflect the
configuration proposed by Dunn.
REFERENCE - ATTACHMENT I:
- Part I - Configuration/Specfications - Paragraph 1.a has been revised
to indicate that the entire workstation configuration must contain
Underwriter Laboratories (UL) certification. Acceptance of any
workstations under the delivery order or BPA shall be contingent upon
receipt of this certification.
- Part I - Configuration/Specifications - Paragraph 3. has been added to
incorporate language requiring that any hardware or software products
provided, which are non-commercial items, be Year 2000 compliant.
<PAGE>
- Part II - Terms and Conditions - Paragraph 1 has been added to reflect
the requirement that workstations be UL certified and that acceptance
is contingent upon this certification.
- Part II - Terms and Conditions - Paragraph 4 has been revised to
indicate that any proposed changes to the workstation configuration be
equal to, or exceed, the currently provided configuration.
- The BPA contains Dunn's statement that any future price reductions in
Dunn's GSA schedule contract will automatically reduce the unit cost
of the workstations provided under this BPA.
By signature below, Dunn hereby acknowledges the above and confirms acceptance
of same.
Sincerely,
/s/ Linda L. Phipps
Linda L. Phipps
Contracting Officer
Acceptance:
/s/ Charles J. Spence
Charles J. Spence
Dunn Computer Corporation
Date: 3/25/97
<PAGE>
Attachment I
PART I - CONFIGURATION/SPECIFICATIONS
1. Dunn Computer Desktop 166Mhz Workstation with AMD PR166+ processor
a. Entire workstation configuration shall be Energy Star, FCC, and UL
compliant.
b. Desktop case;
c. Mother board with Intel chip, 512k L2 cache
d. 4 PCI, 3 ISA slots, 1 shared slot, ZIP socket;
e. 64Mb RAM 60ns, configured with 2 32 Mb SIMMs leaving at least 2 more
open SIMM slots;
f. Keyboard (104);
g. Daewoo, Model 1704C 17" SVGA color monitor, PCI, 2Mb video card,
800x600, 16M colors and 1024x768, 64k colors, non-interlaced .26 dot
pitch, controls, tilt and swivel, 75hz VESA;
h. SIC Resources Sound card, Model Crystal Wave 32AW-3D (Sound Blaster 32
AWE PnP and NT 4.0 compatible), with headphones (Sony, Model
MDR-009VPC);
i. Alps 3.5" floppy 80,000 MTBF;
j. WL Waber Surge protector, Model EP6SP-15 (12 foot, 6 outlet);
k. PC Guardian Lock with key, Model 6001;
l. Has one half bay open;
m. 200 Watt power supply
n. 2 serial ports (16550 AFN UART), 1 parallel port, enhanced, flash BIOS;
o. Fujitsu 2.5GB hard drive, Model M1638TAU (10 ms, exceeds 500,000 MTBF);
p. Artec AM880s Mouse;
q. Token ring card with cable, Olicom (OC3118).
<PAGE>
r. Hitachi cdr 7030 8X CD-ROM, 50K MTBF; and
s. All equipment must have a 1-year, on-site warranty, with a "next-day"
response time (see Part II, paragraph 2 below).
2. All components are certified on Microsoft Windows NT 4.0 Hardware
compatibility list.
3. All hardware and software is Year 2000 compliant.
The contractor warrants that each non-commercial item of hardware,
software, and firmware delivered or developed under this delivery order and
listed above shall be able to accurately process date data [including, but
not limited to, calculating, comparing, and sequencing] from, into, and
between the twentieth and twenty-first centuries, including leap year
calculations, when used in accordance with the item documented provided by
the contractor, provided that all listed or unlisted items [e.g., hardware,
software, firmware] used in combination with such listed item properly
exchange data with it. If the order requires that specific listed items
must perform as a system in accordance with the foregoing warranty, then
that warranty shall apply to those listed items as a system. The duration
of this warranty and the remedies available to the Government for breach of
this warranty shall be as defined in, and subject to, the terms and
limitations of any general warranty provisions of this order, provided that
notwithstanding any provision to the contrary in such warranty
provision(s), or in the absence of any such warranty provision(s), the
remedies available to the Government under this warranty shall include
repair or replacement of any listed item whose non-compliance is discovered
and made known to the contractor in writing within 90 days after
acceptance. Nothing in this warranty shall be construed to limit any rights
or remedies the Government may otherwise have under this contract with
respect to defects other than Year 2000 performance.
PART II - TERMS AND CONDITIONS
1. Acceptance: As provided for in Dunn's letter of March 14, 1997, all
configurations provided under this delivery order shall be UL certified.
Acceptance is contingent upon this certification, which shall be visible on
the outside of each unit.
<PAGE>
2. Delivery: All workstations are to be delivered "plug & play ready," with
all components integrated to the following address:
CompuCom Systems, Inc.
1225 Forest Park
Suite 500
Paulsboro, NJ 08066
Dunn Computer Corporation is required to deliver workstations ordered under
this delivery order, up to a maximum of 250 workstations per month, within
30 days of notification by the Government. Deliveries shall be staggered
between date of award and March 31, 1998.
NOTE: Each shipping carton must contain the serial number of the device(s)
on the outside of the carton.
3. Maintenance/Warranty Considerations
The workstations shall be provided as Government-furnished equipment to an
integration contractor (i.e., Unisys Corporation) responsible for
interating and installing local area networks (to which these workstations
shall be integrated). Because these workstations shall be integrated onto
local area networks for which Unisys Corporation shall have maintenance
responsibility, the Government does not desire a warranty longer than 12
months.
Unisys Corporation has subcontracted integration responsibilities to
CompuCom Systems, Inc. in Paulsboro, NJ. Warranty coverage shall commence
upon receipt of the workstations by CompuCom Systems, Inc. CompuCom shall,
in turn, integrate the workstations onto a local area network and shall
deliver and install the local area network into the applicable Social
Security Administration (SSA) or State Disability Determination Service
(DDS) office. SSA and DDS offices are located nationwide; therefore, the
warranty coverage must be on a nationwide basis.
4. Notice of Changes to Equipment or Critical Internal Components
Because of potential adverse operational affects, the FSS Schedule
contractor shall not make any changes to the configuration above without
written notification and prior approval of the Government.
The Government shall be given 30-day prior notice with regard to any
proposed model changes or to changes in the following critical internal
components: (1) the system board; (2) the
<PAGE>
system BIOS; (3) the system power supply; (4) the floppy disk drives;
(5) the system RAM and (6) the hard disk controller. A sample of any
proposed change shall be provided to the Government for testing to assure
operational compatability.
Any changes required in accordance with the above must be equal to or
exceed the quality of the currently provided configuration.
<PAGE>
Exhibit 10.6
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
AWARD/CONTRACT 1. THIS CONTRACT IS A RATED ORDER [ILLEGIBLE] PAGE OF PAGES
UNDER DPAS (15 CFR 350) 1 108
- ------------------------------------------------------------------------------------------------------------------------------------
2. ISSUED BY 3. EFFECTIVE DATE 4. REQUISITION/PURCHASE REQUEST/PROJECT NO.
USCA-95-C-004 JUN 12 1995
- ------------------------------------------------------------------------------------------------------------------------------------
5. ISSUED BY CODE 6. ADMINISTERED BY: (if other than item 5) CODE
-------------------- -----------------------
Admin. Office of the U.S. Courts
OAT/IRMSD/ASB, Suite 3-100
1 Columbus Circle, N.E.
Washington, DC 20544
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF CONTRACTOR (No., street, city 8. DELIVERY
country, State and ZIP Code)
[ ]FOB ORIGIN [X]OTHER (See below)
Dunn Computer Corporation ----------------------------------------------------
1306 Squire Court 9. DISCOUNT FOR PROMPT PAYMENT
Sterling, VA 20166
----------------------------------------------------
10. SUBMIT INVOICES ITEM
(4 copies unless otherwise
- --------------------------------------------------------------------------------specified TO THE
CODE FACILITY CODE ADDRESS SHOWN IN: Sect. G
- ------------------------------------------------------------------------------------------------------------------------------------
11. SHIP TO/MARK FOR CODE 12. PAYMENT WILL BE MADE BY CODE
-------------------- -----------------------
As specified in individual delivery As specified in delivery orders
orders.
- ------------------------------------------------------------------------------------------------------------------------------------
13. AUTHORITY FOR USING OTHER THAN FULL AND 14. ACCOUNTING AND APPROPRIATION DATA
OPEN COMPETITION:
[ ]10 USC 2304(c)( ) [ ]41 USC 253(c)( )
- ------------------------------------------------------------------------------------------------------------------------------------
15A. ITEM NO. 15B. SUPPLIES/SERVICES 15C. QUANTITY 15D. UNIT 15E. UNIT PRICE 15F. AMOUNT
- ------------------------------------------------------------------------------------------------------------------------------------
Purchase of microprocessor based microcomputer systems and components, operating system software, a word
processing application package, peripheral devices, and interfaces, as specified in Section B of the Contract.
Dunn Computer Corporation's initial proposal dated October 29, 1994, as amended, and Best & Final Offer dated
April 11, 1995, are incorporated by reference and made a part of the contract.
ESTIMATED
- ------------------------------------------------------------------------------------------------------------------------------------
15G. TOTAL AMOUNT OF CONTRACT $15,160,010.28
- ------------------------------------------------------------------------------------------------------------------------------------
16. TABLE OF CONTENTS
- ------------------------------------------------------------------------------------------------------------------------------------
(X) SEC. DESCRIPTION PAGE(S) (X) SEC. DESCRIPTION PAGE(S)
- ------------------------------------------------------------------------------------------------------------------------------------
PART I - THE SCHEDULE PART II - CONTRACT CLAUSES
- ------------------------------------------------------------------------------------------------------------------------------------
X A SOLICITATION/CONTRACT FORM 1 X I CONTRACT CLAUSES 9
- ------------------------------------------------------------------------------------------------------------------------------------
X B SUPPLIES OR SERVICES AND
PRICES/COSTS 38 PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.
- ------------------------------------------------------------------------------------------------------------------------------------
X C DESCRIPTION/SPECS./WORK X J LIST OF ATTACHMENTS 20
STATEMENT 9
- ------------------------------------------------------------------------------------------------------------------------------------
X D PACKAGING AND MARKING 2 PART IV - REPRESENTATIONS AND INSTRUCTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
X E INSPECTION AND ACCEPTANCE 7 K REPRESENTATIONS, CERTIFICATIONS AND
- ------------------------------------------------------- OTHER STATEMENTS OF OFFERORS
X F DELIVERIES OR PERFORMANCE 6
- ------------------------------------------------------------------------------------------------------------------------------------
X G CONTRACT ADMINISTRATION DATA 8 L INSTR., CONDS., AND NOTICES TO OFFERORS
- ------------------------------------------------------------------------------------------------------------------------------------
X H SPECIAL CONTRACT REQUIREMENTS 9 M EVALUATION FACTORS FOR AWARD
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE
- ------------------------------------------------------------------------------------------------------------------------------------
17. [X] CONTRACTORS NEGOTIATED AGREEMENT 18. [ ] AWARD (Contractor is not required to sign
(Contractor is required to sign this this document.) Your offer on Solicitation
document and return 3 copies to issuing Number __________________, including the
office.) Contractor agrees to furnish additions or changes made by you which
and deliver all items or perform all the additions or changes are set forth in full above,
services set forth or otherwise is hereby accepted as to the items listed above
identified above and on any continuation and on any continuation sheets. This award
sheets for the consideration stated herein. consummates the contract which consists of the
The rights and obligations of the parties following documents: (a) the Government's
to this contract shall be subject to and solicitation and your offer, and (b) this
governed by the following documents: award/contract. No further contractual
(a) this award/contract, (b) the solicitation, document is necessary.
if any, and (c) such provisions, representations,
certifications, and specifications, as are
attached or incorporated by reference
herein. (Attachments are listed herein.)
- ------------------------------------------------------------------------------------------------------------------------------------
19A. NAME AND TITLE OF SIGNER (Type or print) 20A. NAME OF CONTRACTING OFFICER
Claudia N. Dunn, Vice President L. Henry Weeks
Contracting Officer
- ------------------------------------------------------------------------------------------------------------------------------------
19B. NAME OF CONTRACTOR 19C. DATE SIGNED 20B. UNITED STATES OF AMERICA 20C. DATE SIGNED
/s/ Claudia N. Dunn 6/12/95 BY /s/ L. Henry Weeks 6/12/95
----------------------------- -----------------------------
(Signature of person (Signature of
authorized to sign) Contracting Officer)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
STANDARD FORM 26 (REV. 4-85) Prescribed by GSA FAR (48 CFR) 53.214(a)
<PAGE>
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE PAGE OF PAGES
1 2
- ------------------------------------------------------------------------------------------------------------------------------------
2. AMENDMENT/MODIFICATION NO. 3. EFFECTIVE DATE 4. REQUISITION/ 5. PROJECT NO. (if applicable)
PURCHASE REQ. NO.
Modification 1 10/12/95
- ------------------------------------------------------------------------------------------------------------------------------------
6. ISSUED BY CODE 7. ADMINISTERED BY: (If other than item 6) CODE
-------------------- -----------------
Admin. Office of the U.S. Courts
OAT/IRMSD/ASB, Suite 3-100
1 Columbus Circle, N.E.
Washington, DC 20544
- ------------------------------------------------------------------------------------------------------------------------------------
8. NAME AND ADDRESS OF CONTRACTOR (No., street, country, State and ZIP Code [X] 9A. AMENDMENT OF SOLICITATION NO.
----
-----------------------------------------------
Dunn Computer Corporation [ ] 9B. DATED (SEE ITEM 11)
1306 Squire Court
Sterling, VA 20166 ----------------------------------------------------
[X] 10A. MODIFICATION OF CONTRACT/ORDER NO.
USCA-95-C-004
-----------------------------------------------
10B. DATED (SEE ITEM [ILLEGIBLE])
- --------------------------------------------------------------------------------
CODE FACILITY CODE 06/12/95
- ------------------------------------------------------------------------------------------------------------------------------------
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] The above numbered solicitation is amended as set forth in Item 14. The Hour and date specified for receipt of
Offers [ ] is extended, [ ] is not extended.
Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by
one of the following methods:
(a) By completing Items 8 and 15, and returning ___ copies of the amendment; (b) By acknowledging receipt of this amendment on
each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and
amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE
HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer
already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the
solicitation and this amendment, and is received prior to the opening hour and date specified.
- ------------------------------------------------------------------------------------------------------------------------------------
12. ACCOUNTING AND APPROPRIATION DATA (if required)
- ------------------------------------------------------------------------------------------------------------------------------------
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
- ------------------------------------------------------------------------------------------------------------------------------------
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE
CONTRACT ORDER NO. ITEM 10A.
- ------------------------------------------------------------------------------------------------------------------------------------
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office,
appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).
- ------------------------------------------------------------------------------------------------------------------------------------
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
- ------------------------------------------------------------------------------------------------------------------------------------
D. OTHER (Specify type of modification and authority)
[X] H 3 Engineering Changes
- ------------------------------------------------------------------------------------------------------------------------------------
E. IMPORTANT: Contractor [ ] is not, [X] is required to sign this document and return 3 copies to the issuing office.
- ------------------------------------------------------------------------------------------------------------------------------------
14. DESCRIPTION OF AMENDMENT/MODIFICATION (organized by UCF section headings, including solicitation contract [ILLEGIBLE].)
Contract USCA-95-C-004 is modified in accordance with the attached pages.
Except as provided herein, all terms and conditions of the document referenced in item 9A or 10A, as heretofore changed,
remaining unchanged and in full force and effect.
- ------------------------------------------------------------------------------------------------------------------------------------
15A. NAME AND TITLE OF SIGNER (Type or print) 16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
John D. Vazzana /s/John D. Vazzana L. Henry Weeks
Contracting Officer
- ------------------------------------------------------------------------------------------------------------------------------------
15B. CONTRACTOR/OFFEROR 15C. DATE SIGNED 16B. UNITED STATES OF AMERICA 16C. DATE SIGNED
Exec. V.P. 10/12/95 BY /s/ [ILLEGIBLE] 10/13/95
------------------------------ -------------------------------
(Signature of person (Signature of
authorized to sign) Contracting Officer)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[ILLEGIBLE] STANDARD FORM 30 (REV. 10-83)
PREVIOUS EDITION UNUSABLE [ILLEGIBLE]
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
SLIMLINE SYSTEM (CLIN 0100)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0100 DUNN 486DX2/66 Slimline system 740 1,153 853,220
0101 Slimline system custom assembly charge 250 130 32,500
USER INSTALLABLE COMPONENTS FOR CLIN 0100
0101CA IBM-chassis Slimline system chassis 275 21 5,775
0101CB DX2 66 Motherboard (w/integrated local bus IDE) 275 70 19,250
0101CC 8 MB RAM System RAM upgrade (8 MB) 275 245 67,375
0101CD DX 3/100 CPU (type/speed) upgrade TO 100MHZ 275 170 46,750
0101CE Boca A/T 10 Serial/Parallel I/O card 275 1 275
0101CF IBM ALG2228 Video card 275 42 11,550
0101CG N/A Power supply 275 15 4,125
0101CH CM-2015 Monitor with cable(s) 275 225 61,875
0101CI IBM 101 Keyboard with cable(s) 275 12 3,300
0101CJ cable 6 ft. Keyboard extension cable(s) 275 4 1,100
0101CK Microsoft serial 2.0a Pointing device 275 9 2,475
0101CL IBM 3.5 Floppy diskette drive (3.5") w/cable(s) 275 32 8,800
0101CM IBM 5.25 Floppy diskette drive (5.25") w/cable(s) 275 32 8,800
0101CN IBM Floppy drive controller 275 2 550
0101CO IBM 420 IDE 420 MB hard disk drive w/ cable 110 110 12,100
0101CP IBM 540S SCS12 530 MB hard drive w/ cables 165 221 36,465
0101CQ IBM hard drive controller - IDE 55 6 330
0101CR TMC-1660 hard drive controller - ISA SCS12 165 49 8,085
0101CS IBM hard drive controller - local bus IDE 55 6 330
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
DESKTOP SYSTEM (CLIN 0200)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0200 DUNN 486DX3/100 Desktop system - standard 740 1,333 986,420
0201 Desktop System custom assembly charge 250 150 37,500
USER INSTALLABLE COMPONENTS FOR CLIN 0100
0201CA IBM-chassis Desktop system chassis 275 21 5,775
0201CBA DX3/100 Motherboard (w/integrated local bus IDE) 220 70 15,400
0201CBB IBM Motherboard - EISA 55 193 10,615
0201CC 8 MB RAM System RAM upgrade (8MB) 275 245 67,375
0201CD Pentium P60 CPU (type/speed) upgrade Pentium p60 275 360 99,000
0201CE Boca AT/10 Serial/Parallel I/O card (integrated on ved 275 36 9,900
0201CF IBM ALG2228 Video card 275 42 11,550
0201CG N/A Power supply 275 15 4,125
0201CH CM-2015 Monitor with cable(s) 275 225 61,875
0201CI IBM 101 Keyboard cable(s) 275 12 3,300
0201CJ cable 6 ft. Keyboard extension cable(s) 275 4 1,100
0201CK Microsoft serial 2.0a Pointing device 275 9 2,475
0201CL IBM 3.5 Floppy diskette drive (3.5") w/cable(s) 275 32 8,800
0201CM IBM 5.25 Floppy diskette drive (5.25") w/cable(s) 275 32 8,800
0201CN IBM Floppy drive controller 275 2 550
0201CO IBM 540 IDE 540 MB hard disk drive w/ cable 110 136 14,960
0201CP IBM 728 IDE 728 MB hard drive w/cable(s) 59 280 16,520
0201CQ IBM 530S SCS12 530 MB hard drive w/cables 82 221 18,122
0201CR IBM 1GBS SCS12 1GB hard disk drive w/cable(s) 24 662 15,888
0201CS IBM hard drive controller - IDE 55 6 330
0201CT TMC-1660 hard drive controller - ISA SCS12 110 49 5,390
0201CU EISAPPORT Hard drive controller - EISA SCS12 55 55 3,025
0201CV IBM hard drive controller - local bus IDE 55 6 330
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
TOWER SYSTEM (CLIN 0300)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0300 DUNN 486DX100 Tower system 165 1,560 257,400
0301 Tower system custom assembly charge 55 100 5,500
USER INSTALLABLE COMPONENTS FOR CLIN 0100
0301CA IBM-Tower chassis Tower system chassis 60 45 2,700
0301CBA DX3/100 Motherboard (w/integrated local bus IDE) 48 90 4,320
0301CBB IBM Motherboard - EISA 12 234 2,808
0301CC 16 MB RAM System RAM upgrade (16MB) 60 490 29,400
0301CD Pentium P90 CPU (type/speed) upgrade (Pentium p90) 60 770 46,200
0301CE Boca AT/10 Serial/Parallel I/O card (integrated on ved 60 1 60
0301CF IBM ALG2228 Video card 60 60 3,600
0301CG N/A Power supply 60 43 2,580
0301CH CM-2017 17" Monitor with cable(s) upgrade 60 420 25,200
0301CI IBM 101 Keyboard cable(s) 60 12 720
0301CJ cable 6 ft. Keyboard extension cable(s) 60 4 240
0301CK Microsoft serial 2.0a Pointing device 60 9 540
0301CL IBM 3.5 Floppy diskette drive (3.5") w/cable(s) 60 32 1,920
0301CM IBM 5.25 Floppy diskette drive (5.25") w/cable(s) 60 32 1,920
0301CN N/A Floppy drive controller 60 2 120
0301CO IBM 728 IDE 728 MB hard disk drive w/ cable 22 266 5,852
0301CP IBM 1GB IDE 1GB hard drive w/cable(s) 6 560 3,360
0301CQ IBM 530S SCS12 530 MB hard drive w/cables 17 265 4,505
0301CR IBM 1 GBS SCS12 1GB hard disk drive w/cable(s) 10 662 6,620
0301CS IBM hard drive controller - IDE 11 8 88
0301CT TMC-1660 hard drive controller - ISA SCS12 22 55 1,210
0301CU EISAPPORT Hard drive controller - EISA SCS12 11 55 605
0301CV IBM hard drive controller - local bus IDE 11 7 77
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
NOTEBOOK SYSTEM ( CLIN 0400)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0400 Dunn 486V+66 Notebook system 386 2,640 1,019,040
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
PRINTERS (CLIN 0500)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0500 PRINTERS
0501 4037-5E Slow speed printers 84 686 57,624
0501C User installable components for CLIN 0501
0501CA 1364481 Paper tray - standard 8 58 464
0501CB 1364482 Paper tray - legal 8 70 560
0501CC 1364483 250 sheets second drawer 8 226 1,808
0501CD 1183333 RAM upgrade 8 136 1,088
0501CE 1382760 Toner cartridge(s) 8 89 712
0502 4039-10R Medium speed printer 526 1,179 620,154
0502C User installable components for CLIN 0502
0502CA 1183260 Paper tray - standard 33 52 1,716
0502CB 1183276 Paper tray - legal 33 98 3,234
0502CC 1195836 500 sheet second drawer 33 271 8,943
0502CD 1328589 RAM upgrade 33 288 9,504
0502CE 1380850 Toner cartridge(s) 33 155 5,155
0503 4039-16L Fast speed printer 250 2,359 589,750
0503C User installable components for CLIN 0503
0503CA 1195836 Paper tray - standard 25 438 10,950
0503CB 1195830 Paper tray - legal 25 452 11,300
0503CC 1326070 300 sheet duplex option 25 499 12,475
0503CD 1328363 RAM upgrade 25 218 5,450
0503CE 1380950 Toner cartridge(s) 25 187 4,675
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
BACK-UP STORAGE DEVICES (CLIN 0600)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0601 TD 420 Back-up device 120 157 18,840
0601A DC2250 Back-up media 250 18 4,500
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
NETWORK INTERFACE CARD (CLIN 0700)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0701 Network interface card (DCN)
0701CA Boca Ben/300 NIC Card: 10BASET - AUI 800 119 95,200
0701CB Boca Ben/300 NIC Card: THINNET - AUI 75 109 8,175
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
UNINTERRUPTIBLE POWER SUPPLY (CLIN 0800)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0801 BK-UPS 450 UPS - System 1 (300-600 VA) 333 195 64,935
0802 BK-UPS 900 UPS - System 2 (600-900 VA) 333 243 80,919
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
CD-ROM DEVICES (CLIN 0900)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0901 IBMCD-1 CD-ROM (internal) 333 174 57,942
0902 IBMCD-1E CD-ROM (external) 333 185 61,605
0903 IBM CD-ROM controller 667 29 19,343
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 1
COMMUNICATIONS MODEMS (CLIN 1000)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
1001 Boca M14401 Modem (internal) 1,166 70 81,620
1002 Boca M1440E Modem (external) 166 76 12,616
5,871,957
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-2 - HARDWARE WARRANTY/MAINTENANCE PRICE SCHEDULE YEAR 1
<TABLE>
<CAPTION>
MONTHLY
MODEL NO. DESCRIPTION QUANTITY WARRANTY TOTAL
<S> <C> <C> <C> <C>
DUNN 486 DX2/66 Slimline system extended warranty 0
(CLIN 0100)
DUNN 486 DX3/1O0 Desktop system extended warranty 0
(CLIN 0200)
DUNN 486 DX3/100 Tower system extended warranty 0
(CLIN 0300)
DUNN DX66/340 Notebook system extended warranty 0
(CLIN 0400)
4037-5E Slow speed printer extended warranty 0
(CLIN 0501)
4039-10R Medium speed printer extended warranty 0
(CLIN 0502)
4039-16L Fast speed printer extended warranty 0
(CLIN 0503)
SE250 Back-up device extended warranty 0
(CLIN 0601)
Boca Ben/300 Network interface card extended warranty 0
(CLIN 0701)
BK-UPS 450 UPS - system 1 extended warranty 0
(CLIN 0801)
BK-UPS 900 UPS - system 2 extended warranty 0
(CLIN 0802)
CDU-33A CD-ROM device (internal) extended warranty 0
(CLIN 0901)
CDU-33A(E) CD-ROM device (external) extended warranty 0
(CLIN 0902)
Boca M14401 Modem (internal) extended warranty 0
(CLIN 1001)
Boca N1440E Modem (external) extended warranty
(CLIN 1002)
TOTAL TABLE B-2 YEAR 1 0
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-3 SOFTWARE UNIT PRICE SCHEDULE (CLIN 2000) YEAR 1
<TABLE>
<CAPTION>
PURCHASE TOTAL
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE COST
<S> <C> <C> <C> <C> <C>
2000 SOFTWARE
2001N Microsoft DOS (MS-DOS), right to copy 2,500 30 75,000
(no software diskette, no documentation)
2001S Microsoft DOS (MS-DOS) 2,500 3 7,500
(Software diskette only)
2001D Microsoft DOS (MS-DOS) 78 10 780
(Documentation only)
2002N Microsoft Windows, right to copy 2,500 30 75,000
(no software diskette, no documentation)
2002S Microsoft Windows 2,500 3 7,500
(Software diskette only)
2002D Microsoft Windows 78 7 546
(Documentation only)
2003N Wordperfect for DOS, right to copy 2,500 30 75,000
(no software diskette, no documentation)
2003S Wordperfect for DOS 2,500 3 7,500
(Software diskette only)
2003D Wordperfect for DOS 84 30 2,520
(Documentation only)
2004N Wordperfect for Windows, right to copy 2,500 55 137,500
(no software diskette, no documentation)
2004S Wordperfect for Windows 2,500 3 7,500
(Software diskette only)
2004D Wordperfect for Windows 84 30 2,520
(Documentation only)
TABLE B-3 TOTAL 398,866
</TABLE>
04/14/95
<PAGE>
Modification 1
Contract USCA-95-C-004
Page 2 of 2
A. The following CLINs for Microsoft Windows Software is hereby added to the
contract.
1. CLIN 2005N: Windows Enterprise Software Maintenance Agreement
CLIN 2005N is being added for Contract Years 1 & 2 only pursuant to
the terms of the Enterprise Maintenance Agreement. The unit price for
Years 1 & 2 is $31.00.
2. CLIN 2005SD: Windows 95 Media, 3.5" Diskette
(Software Diskette only)
The unit price for CLIN 2005SD is $31.00 for Years 1, 2, and 3.
3. CLIN 2005SC: Microsoft Windows 95, CD-ROM
(Software CD-ROM only)
The unit price for CLIN 2005SC is $18.00 for Years 1, 2, and 3.
4. CLIN 2005D: Microsoft Windows, documentation
(Documentation only)
The unit price for CLIN 2005D is $29.00 for Years 1, 2, and 3.
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
SLIMLINE SYSTEM (CLIN 0100)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0100 DUNN 486DX2/66 Slimline system 740 677 500,980
0101 Slimline system custom assembly charge 250 75 18,750
USER INSTALLABLE COMPONENTS FOR CLIN 0100
0101CA IBM-chassis Slimline system chassis 275 18 4,950
0101CB DX2 66 Motherboard (w/integrated local bus IDE) 275 60 16,500
0101CC 8 MB RAM System RAM upgrade (8 MB) 275 204 56,100
0101CD DX 3/100 CPU (type/speed) upgrade TO 100MHZ 275 130 35,750
0101CE Boca A/T 10 Serial/parallel I/O card 275 1 275
0101CF IBM ALG2228 Video card 275 31 8,525
0101CG N/A Power supply 275 11 3,025
0101CH CM-2015 Monitor with cable(s) 275 200 55,000
0101CI IBM 101 Keyboard with cable(s) 275 12 3,300
0101CJ cable 6 ft. Keyboard extension cable(s) 275 4 1,100
0101CK Microsoft serial 2.0a Pointing device 275 9 2,475
0101CL IBM 3.5 Floppy diskette drive (3.5") w/cable(s) 275 24 6,600
0101CM IBM 5.25 Floppy diskette drive (5.25") w/cable(s) 275 24 6,600
0101CN IBM Floppy drive controller 275 1 275
0101CO IBM 420 IDE 420 MB hard disk drive w/cable 110 82 9,020
0101CP IBM 540S SCSI2 530 MB hard drive w/cables 165 165 27,225
0101CQ IBM hard drive controller - IDE 55 4 220
0101CR TMC-1660 hard drive controller - ISA SCSI2 165 55 9,075
0101CS IBM hard drive controller - local bus IDE 55 5 275
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
DESKTOP SYSTEM (CLIN 0200)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0200 DUNN 486 DX3/100 Desktop system - standard 740 925 684,500
0201 Desktop system custom assembly charge 250 80 20,000
USER INSTALLABLE COMPONENTS FOR CLIN 0100
0201CA IBM-chassis Desktop system chassis 275 18 4,950
0201CBA DX3/100 Motherboard (w/integrated local bus IDE) 220 60 13,200
0201CBB IBM Motherboard - EISA 55 165 9,075
0201CC 8 MB RAM System RAM upgrade (8MB) 275 204 56,100
0201CD Pentium P60 CPU (type/Speed) upgrade Pentium p60 275 300 82,500
0201CE Boca AT/10 Serial/Parallel I/O card (integrated on ved 275 27 7,425
0201CF IBM ALG2228 Video card 275 31 8,525
0201CG N/A Power supply 275 11 3,025
0201CH CM-2015 Monitor with cable(s) 275 200 55,000
0201CI IBM 101 Keyboard with cable(s) 275 12 3,300
0201CJ cable 6 ft. Keyboard extension cable(s) 275 4 1,100
0201CK Microsoft serial 2.0a Pointing device 275 9 2,475
0201CL IBM 3.5 Floppy diskette drive (3.5") w/cable(s) 275 24 6,600
0201CM IBM 5.25 Floppy diskette drive (5.25") w/cable(s) 275 24 6,600
0201CN IBM Floppy drive controller 275 1 275
0201CO IBM 540 IDE 540 MB hard disk drive w/cable 110 101 11,110
0201CP IBM 728 IDE 728 MB hard drive w/cable(s) 59 209 12,331
0201CQ IBM 530S SCSI2 530 MB hard drive w/cables 82 165 13,530
0201CR IBM 1GBS SCSI2 1GB hard disk drive w/cable(s) 24 494 11,856
0201CS IBM hard drive controller - IDE 55 4 220
0201CT TMC-1660 hard drive controller - ISA SCSI2 110 36 3,960
0201CU EISAPPORT Hard drive controller - EISA SCSI2 55 41 2,255
0201CV IBM hard drive controller - local bus IDE 55 5 275
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
TOWER SYSTEM (CLIN 0300)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0300 Dunn 486DX100 Tower system 165 1,078 177,870
0301 Tower system custom assembly charge 55 50 2,750
USER INSTALLABLE COMPONENTS FOR CLIN 0100
0301CA IBM-Tower chasis Tower system chassis 60 34 2,040
0301CBA DX3/100 Motherboard (w/integrated local bus IDE) 48 67 3,216
0301CBB IBM Motherboard- EISA 12 174 2,088
0301CC 16MB RAM System RAM upgrade (16MB) 60 408 24,480
0301CD Pentium P90 CPU (type/speed) upgrade( Pentium p90) 60 660 39,600
0301CE Boca AT/10 Serial/Parallel I/O card (integrated on ved 60 1 60
0301CF IBM ALG2228 Video card 60 44 2,640
0301CG N/A Power supply 60 32 1,920
0301CH CM-2017 17" Monitor with cable(s) upgrade 60 350 21,000
0301CI IBM 101 Keyboard with cable(s) 60 12 720
0301CJ cable 6 ft. Keyboard extension cable(s) 60 4 240
0301CK Microsoft serial 2.0a Pointing device 60 9 540
0301CL IBM 3.5 Floppy diskette drive (3.5") w/cable(s) 60 24 1,440
0301CM IBM 5.25 Floppy diskette drive (5.25") w/cable(s) 60 24 1,440
0301CN N/A Floppy drive controller 60 1 60
0301CO IBM 728 IDE 728 MB hard disk drive w/cable 22 198 4,356
0301CP IBM 1GB IDE 1 GB hard drive w/cable(s) 6 385 2,310
0301CQ IBM 530S SCSI2 530 MB hard drive w/cables 17 197 3,349
0301CR IBM 1GBS SCSI2 1GB hard disk drive w/cable(s) 10 493 4,930
0301CS IBM hard drive controller - IDE 11 6 66
0301CT TMC-1660 hard drive controller - ISA SCSI2 22 41 902
0301CU EISAPPORT Hard drive controller - EISA SCSI2 11 41 451
0301CV IBM hard drive controller - local bus IDE 11 5 55
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
NOTEBOOK SYSTEM (CLIN 0400)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0400 Dunn 486V+66 Notebook system 386 2,040 787,440
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
PRINTERS (CLIN 0500)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0500 PRINTERS
0501 4037-SE Slow speed printers 84 562 47,208
0501C User installable components for CLIN 0501
0501CA 1364481 Paper tray - standard 8 58 464
0501CB 1364482 8 70 560
0501CC 1364483 8 226 1,808
0501CD 1183333 8 136 1,088
0501CE 1382760 8 89 712
0502 4039-1OR 526 1,011 531,786
0502C User installable components for CLIN 0502
0502CA 1183260 Paper tray - standard 33 52 1,716
0502CB 1183276 Paper tray - legal 33 98 3,234
0502CC 1195836 500 sheet second drawer 33 226 7,458
0502CD 1328589 RAM upgrade 33 288 9,504
0502CE 1380850 Toner cartridge(s) 33 129 4,257
0503 4039-16L Fast speed printer 250 2,022 505,500
0503C User installable con
0503CA 1195836 Paper tray - standard 25 438 10,950
0503CB 1195830 Paper tray - legal 25 452 11,300
0503CC 1326070 300 sheet duplex 25 499 12,475
0503CD 1328363 RAM upgrade 25 218 5,450
0503CE 1380950 Toner cartridge(s) 25 187 4,675
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
BACK-UP STORAGE DEVICES (CLIN 0600)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0601 TD 420 Back-up device 120 129 15,480
0601A DC2250 Back-up media 250 18 4,500
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
NETWORK INTERFACE CARD (CLIN 0700)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0701 Network interface card (DCN)
0701CA Boca Ben/300 NIC Card: 10BASET - AUI 800 99 79,200
O701CB Boca Ben/300 NIC Card: 75 99 7,425
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
UNINTERRUPTIBLE POWER SUPPLY ( CLIN 0800)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0801 BK-UPS 450 UPS - System 1 (300-600 VA) 333 192 63,936
0802 BK-UPS 900 UPS - System 2 (600-900 VA) 333 240 79,920
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
CD-ROM DEVICES (CLIN 0900)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0901 IBMCD-1 CD-ROM (internal) 333 93 30,969
0902 IBMCD-1E CD-ROM (external) 333 138 45,954
0903 IBM CD-ROM controller 667 21 14,007
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 2
COMMUNICATIONS MODEMS (CLIN 1000)
<TABLE>
<CAPTION>
PURCHASE TOTAL
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE COST
<S> <C> <C> <C> <C> <C>
1001 Boca M14401 Modem (internal) 1,166 64 74,624
1002 Boca M1440E Modem (external) 166 68 11,288
4,459,618
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-2 HARDWARE WARRANTY/MAINTENANCE PRICE YEAR 2
<TABLE>
<CAPTION>
MONTHLY
WARRANTY TOTAL
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE COST
<S> <C> <C> <C> <C> <C>
0101W DUNN 466 DX2/6 99 2.17 214.83
(CLIN 0100)
0201W DUNN 466 DX3/1 Desktop system extended warranty 99 2.25 222.75
(CLIN 0200)
0301W DUNN 486 DX3/1 Tower system extended warranty 22 2.50 55.00
(CLIN 0300)
0401W DUNN DX66/340 Notebook system extended warranty 39 2.50 97.50
CLIN 0400)
0501W 4037-5E Slow speed printer extended warranty 8 6.42 51.36
(CLIN 0501)
0502W 4039-10R Medium speed printer extended warranty 53 4.75 251.75
(CLIN 0502)
0503W 4039-16L Fast speed printer extended warranty 25 6.75 168.75
(CLIN 0503)
0601W SE250 Back-up device extended warranty 12 2.00 24.00
(CLIN 0601)
0701W Boca Ben/300 Network interface card extended warranty 87 0.50 43.50
(CLIN 0701)
0801W BK-UPS 450 UPS - system 1 extended warranty 33 0.42 13.86
(CLIN 0801)
02W BK-UPS 900 UPS - system 2 extended warranty 33 0.42 13.86
(CLIN 0802)
0901W CDU-33A CD-ROM device (internal) extended warranty 33 1.25 41.25
(CLIN 0901)
0902W CDU-33A(E) CD-ROM device (external) extended warranty 33 1.67 55.11
(CLIN 0902)
1001W Boca Ml4401 Modem (internal) extended warranty 117 0.17 19.89
(CLIN 1001)
1002W Boca N1440E Modem (external) extended warranty 17 0.17 2.89
(CLIN 1002) -------
TOTAL TABLE B -2 1276.30
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-3 SOFTWARE UNIT PRICE SCHEDULE (CLIN 2000) YEAR 2
<TABLE>
<CAPTION>
PURCHASE TOTAL
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE COST
<S> <C> <C> <C> <C> <C>
2000 SOFTWARE
2001N Microsoft DOS (MS-DOS), right to copy 2,500 15 37,500
(no software diskette, no documentation)
2001S Microsoft DOS (MS-DOS) 2,500 3 7,500
(Software diskette only)
2001D Microsoft DOS (MS-DOS) 78 10 780
(Documentation only)
2002N Microsoft Windows, right to copy 2,500 15 37,500
(no software diskette, no documentation)
2002S Microsoft Windows 2,500 3 7,500
(Software diskette only)
2002D Microsoft Windows 78 7 546
(Documentation only)
2003N Wordperfect for DOS, right to copy 2,500 25 62,500
(no software diskette, no documentation)
2003S Wordperfect for DOS 2,500 3 7,500
(Software diskette only)
2003D Wordperfect for DOS 84 30 2,520
(Documentation only)
2004N Wordperfect for Windows, right to copy 2,500 45 112,500
(no software diskette, no documentation)
2004S Wordperfect for Windows 2,500 3 7,500
(Software diskette only)
2004D Wordperfect for Windows 84 30 2,520
(Documentation only)
TABLE B-3 TOTAL 286,366
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
SLIMLINE SYSTEM (CLIN 0100)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0100 DUNN 486DX2/66 Slimline system 740 571 422,540
0101 Slimline system custom assembly charge 250 30 7,500
USER IN
0101CA IBM-chassis Slimline system chassis 275 18 4,950
0101CB DX2 66 Motherboard (w/integrated local bus IDE) 275 50 13,750
0101CC 8 MB RAM System RAM upgrade (8 MB) 275 204 56,100
0101CD DX 3/100 CPU (type/speed) upgrade TO 100MHZ 275 120 33,000
0101CE Boca A/T 10 Serial/parallel I/O card 275 1 275
0101CF IBM ALG2228 Video card 275 23 6,325
0101CG N/A Power supply 275 8 2,200
0101CH CM-2015 Monitor with cable(s) 275 200 55,000
0101CI IBM 101 Keyboard with cable(s) 275 12 3,300
0101CJ cable 6 ft. Keyboard extension cable(s) 275 4 1,100
0101CK Microsoft serial 2.0a Pointing device 275 9 2,475
0101CL IBM 3.5 Floppy diskette drive (3.5") w/cable(s) 275 24 6,600
0101CM IBM 5.25 Floppy diskette drive (5.25") w/cable(s) 275 18 4,950
0101CN IBM Floppy drive controller 275 1 275
0101CO IBM 420 IDE 420 MB hard disk drive w/cable 110 61 6,710
0101CP IBM 540S SCSI2 530 MB hard drive w/cables 165 123 20,295
0101CQ IBM hard drive controller - IDE 55 3 165
0101CR TMC-1660 hard drive controller - ISA SCSI2 165 49 8,085
0101CS IBM hard drive controller - local bus IDE 55 4 220
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
DESKTOP SYSTEM (CLIN 0200)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0200 DUNN 486DX3/100 Desktop system - standard 740 762 563,880
0201 Desktop system custom assembly charge 250 50 12,500
USER IN
0201CA IBM-chassis Desktop system chassis 275 18 4,950
0201CBA DX3/100 Motherboard (w/integrated local bus IDE) 220 50 11,000
0201CBB IBM Motherboard - EISA 55 138 7,590
0201CC 8 MB RAM System RAM upgrade (8MB) 275 204 56,100
0201CD Pentium P60 CPU (type/speed) upgrade Pentium p60 275 270 74,250
0201CE Boca AT/10 Serial/parallel I/O card (integrated on ved 275 20 5,500
0201CF IBM ALG2228 Video card 275 23 6,325
0201CG N/A Power supply 275 8 2,200
0201CH CM-2015 Monitor with cable(s) 275 200 55,000
0201CI IBM 101 Keyboard with cable(s) 275 12 3,300
0201CJ cable 6 ft. Keyboard extension cable(s) 275 4 1,100
0201CK Microsoft serial 2.0a Pointing device 275 9 2,475
0201CL IBM 3.5 Floppy diskette drive (3.5") w/cable(s) 275 24 6,600
0201CM IBM 5.25 Floppy diskette drive (5.25") w/cable(s) 275 18 4,950
0201CN IBM Floppy drive controller 275 1 275
0201CO IBM 540 IDE 540 MB hard disk drive w/ cable 110 75 8,250
0201CP IBM 728 IDE 728 MB hard drive w/cable(s) 59 155 9,145
0201CQ IBM 530S SCS12 530 MB hard drive w/cables 82 123 10,086
0201CR IBM 1GBS SCS12 1GB hard disk drive w/cable(s) 24 368 8,832
0201CS IBM hard drive controller - IDE 55 3 165
0201CT TMC-1660 hard drive controller - ISA SCS12 110 27 2,970
0201CU EISAPPORT Hard drive controller - EISA SCS12 55 30 1,650
0201CV IBM hard drive controller - local bus IDE 55 4 220
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
TOWER SYSTEM (CLIN 0300)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0300 Dunn 486DX100 Tower system 165 888 146,520
0301 Tower system custom assembly charge 55 50 2,750
USER IN
0301CA IBM-Tower chasis Tower system chassis 60 25 1,500
0301CBA DX3/100 Motherboard (w/integrated local bus IDE) 48 50 2,400
0301CBB IBM Motherboard- EISA 12 130 1,560
0301CC 16MB RAM System RAM upgrade (16MB) 60 408 24,480
0301CD Pentium P90 CPU (type/speed) upgrade(Pentium p90) 60 550 33,000
0301CE Boca AT/10 Serial/Parallel I/O card (integrated on ved 60 1 60
0301CF IBM ALG2228 Video card 60 33 1,980
0301CG N/A Power supply 60 24 1,440
0301CH CM-2017 17" Monitor with cable(s) upgrade 60 315 18,900
0301CI IBM 101 Keyboard with cable(s) 60 12 720
0301CJ cable 6 ft. Keyboard extension cable(s) 60 4 240
0301CK Microsoft serial 2.0a Pointing device 60 9 540
0301CL IBM 3.5 Floppy diskette drive (3.5") w/cable(s) 60 18 1,080
0301CM IBM 5.25 Floppy diskette drive (5.25") w/cable(s) 60 18 1,080
0301CN N/A Floppy drive controller 60 1 60
0301CO IBM 728 IDE 728 MB hard disk drive w/ cable 22 148 3,256
0301CP IBM 1GB IDE 1 GB hard drive w/cable(s) 6 287 1,722
0301CQ IBM 530S SCSI2 530 MB hard drive w/cables 17 147 2,499
0301CR IBM 1GBS SCSI2 1GB hard disk drive w/cable(s) 10 367 3,670
0301CS IBM hard drive controller - IDE 11 4 44
0301CT TMC-1660 hard drive controller - ISA SCSI2 22 30 660
0301CU EISAPPORT Hard drive controller - EISA SCSI2 11 30 330
0301CV IBM hard drive controller local bus IDE 11 4 44
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
NOTEBOOK SYSTEM (CLIN 0400)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0400 Dunn 486V+66 Notebook system 386 1,520 586,72O
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
PRINTERS(CLIN 0500)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0500 PRINTERS
0501 4037-5E Slow speed printers 84 562 47,208
0501C User installable components for CLIN 0501
0501CA 1364481 Paper tray - standard 8 58 464
0501CB 1364482 Paper tray - legal 8 70 560
0501CC 1364483 250 sheet second drawer 8 226 1,808
0501CD 1183333 RAM upgrade 8 136 1,088
0501CE 1382760 Toner cartridge(s) 8 89 712
0502 4039-10R Medium speed printer 526 1,011 531,786
0502C User installable components for CLIN 0502
0502CA 1183260 Paper tray - standard 33 52 1,716
0502CB 1183276 Paper tray - legal 33 98 3,234
0502CC 1195836 500 sheet second drawer 33 225 7,458
0502CD 1328589 RAM upgrade 33 288 9,504
0502CE 1380850 Toner cartridge(s) 33 129 4,257
0503 4039-16L Fast speed printer 250 2,022 505,500
0503C User installable components for CLIN 0503
0503CA 1195836 Paper tray - standard 25 438 10,950
0503CB 1195830 Paper tray - legal 25 452 11,300
0503CC 1326070 300 sheet duplex option 25 499 12,475
0503CD 1328363 RAM upgrade 25 218 5,450
0503CE 1380950 Toner cartridge(s) 25 187 4,675
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
BACK-UP STORAGE DEVICES (CLIN 0600)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0601 TD 420 Back-up device 120 114 13,680
0601A DC2250 Back-up media 250 l8 4,500
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
NETWORK INTERFACE CARD (CLIN 0700)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0701 Network interface card (DCN)
0701CA Boca Ben/300 NIC Card: 10BASET - AUI 800 89 71,200
0701CB Boca Ben/300 NIC Card: THINNET - AUI 75 89 6,675
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
UNINTERRUPTIBLE POWER SUPPLY (CLIN 0800)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0801 BK-UPS 450 UPS - System 1 (300-600 VA) 333 181 60,273
0802 BK-UPS 900 UPS - System 2 (600-900 VA) 333 226 75,258
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
CD-ROM DEVICES (CLIN 0900)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
0901 IBMCD-1 CD-ROM (internal) 333 69 22,977
0902 IBMCD-1E CD-ROM (external) 333 103 34,299
0903 IBM CD-ROM controller 5 16 80
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-1 HARDWARE UNIT PRICE SCHEDULE YEAR 3
COMMUNICATIONS MODEMS (CLIN 1000)
<TABLE>
<CAPTION>
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE TOTAL
<S> <C> <C> <C> <C> <C>
1001 Boca Ml4401 Modem (internal) 1,166 51 59,466
1002 Boca M1440E Modem (external) 166 61 10,126
3,871,062
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-2 - HARDWARE WARRANTY/MAINTENANCE PRICE SCHEDULE YEAR 3
<TABLE>
<CAPTION>
MONTHLY
CLIN MODEL NO. DESCRIPTION QUANTITY WARRANTY TOTAL
<S> <C> <C> <C> <C> <C>
0101W DUNN 486 DX2/6 Slimline system extended warranty 99.00 2.28 225.72
(CLIN 0100)
0201W DUNN 486 DX3/1 Desktop system extended warranty 99.00 2.36 233.64
(CLIN 0200)
0301W DUNN 486 DX3/1 Tower system extended warranty 22.00 2.63 57.86
(CLIN 0300)
0401W DUNN DX66/340 Notebook system extended warranty 39.00 2.63 102.57
(CLIN 0400)
0501W 4037-5E Slow speed printer extended warranty 8.00 6.74 53.92
(CLIN 0501)
0502W 4039-1OR Medium speed printer extended warranty 53.00 4.99 264.47
(CLIN 0502)
0503W 4039-16L Fast speed printer extended warranty 25.00 7.09 177.25
(CLIN 0503)
0601W SE250 Back-up device extended warranty 12.00 2.10 25.20
(CLIN 0601)
0701W Boca Ben/300 Network Interface Card extended warranty 87.00 0.53 46.11
(CLIN 0701)
0801W BK-UPS 450 UPS - system 1 extended warranty 33.00 0.44 14.52
(CLIN 0801)
0802W BK-UPS 900 UPS - system 2 extended warranty 33.00 0.44 14.52
(CLIN 0802)
0901W CDU-33A CD-ROM device (internal) extended warranty 33.00 1.31 43.23
(CLIN 0901)
0902W CDU-33A(E) CD-ROM device (external) extended warranty 33.00 1.75 57.75
(CLIN 0902)
1001W Boca M14401 Modem (internal) extended warranty 117.00 0.18 21.06
(CLIN 1001)
1002W Boca N1440E Modem (external) extended warranty 17.00 0.18 3.06
(CLIN 1002)
TOTAL TABLE B-2 1,340.88
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-3 SOFTWARE UNIT PRICE SCHEDULE (CLIN 2000) YEAR 3
<TABLE>
<CAPTION>
PURCHASE TOTAL
CLIN MODEL NO. DESCRIPTION QUANTITY PRICE COST
<S> <C> <C> <C> <C> <C>
2000 SOFTWARE
2001N Microsoft DOS (MS-DOS), right to copy 2,500 10 25,000
(no software diskette, no documentation)
2001S Microsoft DOS (MS-DOS) 2,500 3 7,500
(Software diskette only)
2001D Microsoft DOS (MS-DOS) 78 10 780
(Documentation only)
2002N Microsoft Windows, right to copy 2,500 10 25,000
(no software diskette, no documentation)
2002S Microsoft Windows 2,500 3 7,500
(Software diskette only)
2002D Microsoft Windows 78 7 546
(Documentation only)
2003N Wordperfect for DOS, right to copy 2,500 20 50,000
(no software diskette, no documentation)
2003S Wordperfect for DOS 2,500 3 7,500
(Software diskette only)
2003D Wordperfect for DOS 84 30 2,520
(Documentation only)
2004N Wordperfect for Windows, right to copy 2,500 35 87,500
(no software diskette, no documentation)
2004S Wordperfect for Windows 2,500 3 7,500
(Software diskette only)
2004D Wordperfect for Windows 84 30 2,520
(Documentation only)
TABLE B-3 TOTAL 223,866
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION B - SUPPLIES/SERVICES AND PRICES/COSTS
TABLE B-2 - HARDWARE WARRANTY/MAINTENANCE PRICE SCHEDULE YEAR 4
<TABLE>
<CAPTION>
MONTHLY
WARRANTY
CLIN MODEL NO. DESCRIPTION QUANTITY COST TOTAL
<S> <C> <C> <C> <C> <C>
0101W DUNN 486 DX2/66 Slimline system extended warranty 99.00 2.39 236.61
(CLIN 0100)
0201W DUNN 486 DX3/100 Desktop system extended warranty 99.00 2.48 245.52
(CLIN 0200)
0301W DUNN 486 DX3/100 Tower system extended warranty 22.00 2.76 60.72
(CLIN 0300)
0401W DUNN DX66/340 Notebook system extended warranty 39.00 2.76 107.64
(CLIN 0400)
0501W 4037-SE Slow speed printer extended warranty 8.00 7.07 56.56
(CLIN 0501)
0502W 4039-10R Medium speed printer extended warranty 53.00 5.24 277.72
(CLIN 0502)
0503W 4039-16L Fast speed printer extended warranty 25.00 7.44 186.00
(CLIN 0503)
0601W SE250 Backup device extended warranty 12.00 2.20 26.40
(CLIN 0601)
0701W Boca Ben/300 Network interface card extended 87.00 0.55 47.85
warranty (CLIN 0701)
0801W BK-UPS 450 UPS - system 1 extended warranty 33.00 0.46 15.18
(CLIN 0801)
0802W BK-UPS 900 UPS - system 2 extended warranty 33.00 0.46 15.18
(CLIN 08O2)
0901W CDU-33A CD-ROM device (internal) extended 33.00 1.38 45.54
warranty (CLIN 0901)
0902W CDU-33A(E) CD-ROM device (external) extended 33.00 1.84 60.72
warranty (CLIN 0902)
1001W Boca M14401 Modem (internal) extended warranty 117.00 0.18 21.06
(CLIN 1001)
1002W Boca N1440E Modem (external) extended warranty 17.00 0.18 3.06
(CLIN 1002)
TOTAL TABLE B - 2 1,405.76
</TABLE>
04/14/95
<PAGE>
Dunn Computer Corporation
SECTION C - SPECIFICATIONS USCA-95-C-004
Table of Contents
C-l General Description .............................................. C-2
C-2 Locations ........................................................ C-2
C-3 Specific Requirements ............................................ C-3
A. General User Environment ......................................... C-3
(1) System Requirements ......................................... C-3
(a) Slimline System ........................................ C-4
(b) Desktop System ......................................... C-4
(c) Tower System ........................................... C-4
(d) Notebook System ........................................ C-4
(2) Software Requirements ....................................... C-4
(3) System Setup ................................................ C-5
B. Print Requirements ............................................... C-5
C. Backup Requirements .............................................. C-5
D. Network Interface Requirements ................................... C-6
E. Uninterruptible Power Supply (UPS) Requirements .................. C-6
F. CD-ROM Requirements .............................................. C-6
G. Modem Requirements ............................................... C-6
H. User-Installable Components (UICs) ............................... C-6
I. Life Cycle Support Requirements .................................. C-7
(1) Warranty .................................................... C-7
(2) Customer Technical Assistance ............................... C-7
(3) Order Processing Support .................................... C-7
(4) Software Updates/Upgrades ................................... C-8
J. Program Management Office Support ................................ C-8
(1) Contractor-Liaison .......................................... C-8
(2) Periodic Progress Reporting ................................. C-8
(a) Ad-Hoc Contract Summary Report ......................... C-8
(b) Monthly Contract Status Report ......................... C-9
1) Delivery Status ................................... C-9
2) New Orders Received ............................... C-9
3) Maintenance Calls and Warranty
Support ........................................... C-9
K. Labeling ......................................................... C-9
L. Production and Delivery Capability ............................... C-9
Page C - 1
<PAGE>
Dunn Computer Corporation
SECTION C - SPECIFICATIONS USCA-95-C-004
C-1 General Description.
The Government has a requirement for microprocessor-based microcomputer
systems and components, operating system software, a word processing application
package, peripheral devices, and interfaces to operate primarily in a networked
office environment. The requirement will include printers, backup storage
devices, network interface cards, uninterruptible power supplies, CD-ROMs,
modems, user-installable components, Contractor-provided support services, and
upgrades and updates to all delivered equipment and software to provide
technology refreshment to the Federal Judiciary. The current and future
networking environment is based upon the Federal Judiciary's Data Communications
Network (DCN), a 10BASE-T implementation of the IEEE 802.3 LAN protocol (IEEE
802.3i), and is migrating to the Government Open Systems Interconnection Profile
(GOSIP) (See Section J, Attachment 1).
The offered computers shall enter a computing environment consisting of
twenty-eight thousand systems including AST, Compaq, CompuAdd, Dell, Everex,
Gateway, and Zeos microcomputers among others, running both commercial and
Government-developed applications software. The existing computer base uses
commercial applications software (see Section J, Attachment 4) including such
MS- DOS based packages as Microsoft Windows, Wordperfect for Windows,
Wordperfect for DOS, Excel, Powerpoint, Lotus, and PC-Tools; Government
applications software includes programs developed using databases such as
FoxPro, dBASE III/III+/IV, Paradox and MS-Visual/Basic. Most of the current
Government-developed microcomputer applications use the MS-DOS environment.
C-2 Locations.
The Contractor-provided systems will be used in the Federal Judiciary, the
Administrative Office of the U.S. Courts, and the Federal Judicial Center. The
primary geographic regions that must be supported are: (1) all fifty (50) of the
United States, (2) the District of Columbia, (3) Northern Mariana Islands, (4)
Guam, (5) Virgin Islands, and (6) Puerto Rico. See Section J, Attachment 3 for a
listing of current Government sites where systems, peripherals, software and
user installable components (UICs) may be located and initial warranty or
extended warranty is required.
Page C - 2
<PAGE>
Dunn Computer Corporation
SECTION C - SPECIFICATIONS USCA-95-C-004
C-3 Specific Requirements.
All systems provided under this contract shall include all necessary
hardware, software, and documentation to enter (using a keyboard and pointing
device), manipulate, view, store, and print the information created using the
Contractor-provided software. All systems shall be expandable and include
hardware interfaces (e.g., Centronics compliant parallel and RS-232C compliant
serial ports) for connection to other Government-owned printers, modems, and
computers. The equipment shall provide Government users with the capability to
execute, without change, standard Government and commercial MS-DOS based
software applications that are used Judiciary-wide in binary form except those
applications that bypass MS-DOS/BIOS interrupts to address hardware directly or
where these applications contain embedded control codes specific to a
Government-owned peripheral.
The contractor shall provide custom system configurations when specified by
the Government based on individual components ordered. All systems provided
under this contract shall be compatible with the Judiciary's DCN local area
network (LAN) environment communications capabilities (see Section J, Attachment
5). These capabilities include DCN compatible hardware and software interfaces,
drivers and utilities (IEEE 802.3i, TCP/IP, RFC 1001/2 Netbios, TELNET, SMTP and
FTP). The Contractor's systems shall provide networking platforms to inter-
operate with the Novell Netware network 3.lx and 4.X operating system. The
Contractor is not responsible for providing LAN operating systems software.
A. General User Environment. These microcomputer systems and components
will be used primarily in a networked office environment by slimline, desktop,
and tower users. All systems provided shall be easily unpacked, quickly set up,
and ready for immediate operation with all ordered software pre-loaded.
(1) System Requirements. The Contractor shall provide the following
four user-friendly systems with manufacturer-developed documentation on hardware
and software (DOS and Windows) operation. Each system shall have the capability
of executing applications while attached to a Novell Netware server and
monitoring the LAN for incoming cc:Mail. Government users shall have the option
to order any of the systems with or without contractor-provided Wordperfect or
Wordperfect for Windows and corresponding documentation. Each system must be
certified to run the most current versions of Microsoft DOS, Microsoft NT,
Microsoft Windows, Wordperfect, Wordperfect for Windows, OS/2 and Solaris/386
UNIX. Each system (except the Notebook) must also be
Page C - 3
<PAGE>
Dunn Computer Corporation
SECTION C - SPECIFICATIONS USCA-95-C-004
certified to run Novell Netware 3.11, 3.12, and the current shipping version
4.x. All systems (except the Notebook) shall include the ability to upgrade the
processor in the future.
(a) System #1: Slimline System (CLIN 0100). The Contractor shall
provide a slimline system that will be used primarily for word processing
(WordPerfect or WordPerfect for Windows), network electronic mail (cc:Mail),
network calendaring/scheduling, and computer-assisted legal research (Lexis and
Westlaw for DOS and Windows). Processor and memory shall be sufficient to
provide responsive, concurrent operation of the software products outlined
above. Formatted disk capacity shall be no less than 200 megabytes.
(b) System #2: Desktop System (CLIN 0200). The Contractor shall
provide a desktop system. In addition to the functions and capabilities of the
slimline system, the desktop system should provide responsive, concurrent
operation of moderately complex spreadsheets that may involve complex
mathematical operations, CD-ROM based interactive multimedia applications with
sound and full or partial screen graphics manipulation, and database-intensive
software applications (e.g. Foxpro, Paradox or Access). Formatted disk capacity
shall be no less than 350 megabytes.
(c) System #3: Tower System (CLIN 0300). The Contractor shall
provide a tower system. In addition to the functions and capabilities of the
desktop system, the tower system should be suitable for use as a computer-
assisted design workstation, as a multimedia development system, or as a large
database system. Typical functions would include complex mathematical
operations, disk intensive I/O or advanced manipulation of graphics. Formatted
disk capacity shall be no less than 500 megabytes.
(d) System #4: Notebook System (CLIN 0400). The Contractor shall
provide a notebook system. This system should be capable of running all software
outlined for the slimline system. The performance should be comparable to that
required of the slimline system. The system, for the most part, will be used for
travel, but in some cases it may be used as the primary desktop computer.
Formatted disk capacity shall be no less than 200 megabytes.
(2) Software Requirements (CLINs 2001, 2002, 2003, and 2004). The
Government has a large investment in Government-developed Microsoft DOS and
Windows applications, Wordperfect and
Page C - 4
<PAGE>
Dunn Computer Corporation
SECTION C - SPECIFICATIONS USCA-95-C-004
Wordperfect for Windows applications. The Contractor shall provide Microsoft DOS
and Microsoft Windows software with each system ordered. Government users shall
have the option to order these systems with or without the Contractor-provided
word processing software and corresponding documentation. In the case of new
software level releases, the Government may elect to accept the earlier versions
of the software, and if accepted, manufacturer's software support will be
provided at no additional cost during the period of this contract, including
renewals thereof. The Contractor is not required to support the software
provided.
There is a requirement in this solicitation that the Contractor shall
provide uninterruptible power supplies, CD-ROM, modems, etc. Any equipment or
components provided by the Contractor under this contract shall include all
software required for interface and control. The Contractor is not required to
support the software provided.
The Contractor shall provide systems capable of executing Government-
developed software without modification except those applications that bypass
MS-DOS/BIOS interrupts to address hardware directly or where these applications
contain embedded control codes specific to a Government-owned peripheral.
(3) System Setup. Each system shall be delivered properly configured
with all components (e.g., network card, modems, CD-ROM, UICs, etc.) and
software (e.g., Microsoft DOS, Microsoft Windows) and any software ordered
(e.g., Wordperfect, and Wordperfect for Windows). All software diskettes,
licenses, and both technical and user documentation, shall be supplied with each
system ordered. Each system delivered must be properly configured so that it can
be taken out of packaging, set up, plugged in, and be operational.
B. Print Requirements (Depending on the number of printers proposed, use
CLINs 0501, 0502 and 0503). The Contractor shall provide laser printer(s) (not
more than 3) that provide the following print capability:
1. the slowest must be a minimum of 4 pages per minute
2. the fastest must be a minimum of 16 pages per minute
C. Backup Requirements (CLINs 0601). The Contractor shall provide for a
means of performing backups of storage media devices provided with CLINs 0100
through 0300. The Contractor shall provide all hardware, software, and media to
perform these
Page C - 5
<PAGE>
Dunn Computer Corporation
SECTION C - SPECIFICATIONS USCA-95-C-004
backups up to 250MB, including all mounting hardware. The backup process shall
require a minimum of user involvement.
D. Network Interface Requirements (CLIN 0701). The Contractor shall
provide network interface cards that can be installed in the slimline, desktop,
and tower systems. All network interface cards provided under this contract
shall be compatible with and have the capability to connect to the DCN network.
The interface card shall be a minimum of 16-bit, and capable of connecting to
AUI/10BASE-T, and AUI/THINNET.
E. Uninterruptible Power Supply (UPS) Requirements (CLINs 0801 and 0802).
The Contractor shall provide uninterruptible power supplies that can be used
with CLINs 0100 through 0300. The Contractor shall provide un-interruptible
power supplies in power ranges (300-600 VA, and 600-900 VA) to support each
system.
F. CD-ROM Requirement (CLIN 0901 and 0902). The Contractor shall provide
CD-ROM for the purpose of accessing a variety of
[ILLEGIBLE]
H. User-Installable Components (UICs). The Contractor shall provide the
user with the capability and right to add new components, upgrade each system
configuration and to perform self-maintenance using Contractor-provided UICs.
Because of deployment and contingency situations, some Government users may
elect to perform self-maintenance or add third party components during the
warranty period. Such user self-maintenance on any equipment by government
personnel during the warranty period shall not affect the warranty of the
original end item as addressed by Paragraph C-3(I)(1).
The Contractor shall provide user-installable components (UICs) and deliver
them in a timely manner to preclude extended hardware downtimes. The Contractor
shall define all "shelf lifes" for offered UICs (e.g. batteries, etc.).
Page C - 6
<PAGE>
Dunn Computer Corporation
SECTION C - SPECIFICATIONS USCA-95-C-004
I. Life Cycle Support Requirements.
(1) Warranty. The Contractor shall provide a highly reliable and
maintainable system, and set of peripherals to operate in an office environment.
These systems shall be user-expandable and shall be user maintainable without
voiding the Contractor-provided warranty or extended warranty. The Contractor
shall provide a minimum one year warranty which provides timely warranty support
on all offered hardware (CLINs 0101W-1002W). The Contractor shall provide the
option to purchase extended warranty (CLINs, Table B-2, Warranty/Maintenance)
for systems and peripherals located at Government sites throughout the
Judiciary. For Contractor planning purposes only, Section J, Attachment 3
contains a list of the current Government sites where systems, peripherals,
software and UICs may be delivered and from which initial warranty or extended
warranty service may be required. As a minimum, the Contractor shall provide a
warranty program within Contractor defined region(s). This program shall, as a
minimum, allow users to call for warranty service and the Contractor shall
accept return of a failed item. The contractor's warranty program shall support
sites located Judiciary-wide. This program shall provide for repair or
replacement of systems and peripherals in a timely manner and include the means
to transport the systems. The contractor shall bear transportation charges and
responsibility for equipment while in transit to the Government site. All
warranties and extended warranties must be proposed in one (1) year increments.
(2) Customer Technical Assistance. The Contractor shall provide
periodic assistance and information on such items as warranty service,
configuration, installation, and operation of all Contractor-provided hardware
products. The Contractor shall provide customer technical support via a toll
free number. All users, including overseas users, shall have the capability to
ask questions, receive answers and support in a timely and effective manner.
(3) Order Processing Support. The Contractor shall provide the
Government user with order processing support. At a minimum, the user shall have
the capability to quickly determine the complete history and current status
(e.g., when was the order received, were there any errors in the order, delays
in shipment of the order, etc.) of a particular delivery order or group of
orders Monday through Friday during the hours of 8:30 am through 6:00 pm EST.
The Contractor shall have the capability to reprioritize delivery orders upon
request of the Government
Page C - 7
<PAGE>
Dunn Computer Corporation
SECTION C - SPECIFICATIONS USCA-95-C-004
central ordering facilities. The Contractor shall provide tracking and status by
Court site.
(4) Software Updates/Upgrades. The Contractor shall provide, with
each system, all ordered commercially-available versions of the Contractor-
provided software and documentation throughout the base year and the two option
years of the contract. The Contractor shall provide software, starting with the
minimum versions stated below, and add, to the contract, all new commercially-
available versions released during the contract life. The Government shall be
able to order any combination of software versions offered. The Contractor will
notify the Government when manufacturer commercially-available versions are no
longer supported. The minimum software versions are:
Microsoft DOS 6.2X (bundled)
Windows for DOS 3.1X (bundled)
WordPerfect for DOS 5.1+ (unbundled)
Wordperfect for Windows 6.0X (unbundled)
WordPerfect for Windows 5.2 (unbundled)
J. Program Management Office Support. To effectively manage and provide
accurate statistical data to the Administrative Office of the U.S. Courts, the
Contractor shall provide a Program Management Office Liaison representative as
well as various periodic reports.
(1) Contractor-Liaison. The Contractor shall provide a Program Office
Liaison to facilitate Government-Contractor interface and mutual understanding.
The primary function of the Liaison will be to act as the technical and
managerial interface between the Contractor and the Government Program
Management Office which is located at the Administrative Office of the U.S.
Courts, Washington, DC.
(2) Periodic Progress Reporting. The Contractor shall furnish a
Monthly Contract Status Report to the COTR by the 15th day of each month. The
Contractor shall furnish an Ad-Hoc Contract Summary Report to the Administrative
Office of the U.S. Courts upon request by the COTR. Each report shall include
the following information:
(a) Ad-Hoc Contract Summary Report. The Contractor shall maintain
an inventory listing of all hardware and software furnished to-date under the
contract, grouped by court location. The report shall be provided to the Program
Management Office upon request by the COTR; the report is not required according
to a predetermined schedule. The inventory
Page C - 8
<PAGE>
Dunn Computer Corporation
SECTION C - SPECIFICATIONS USCA-95-C-004
listing will include, at a minimum, the following informational items grouped by
court location: CLIN number, quantity, equipment or software model number,
description, serial number, delivery date, date of acceptance, and date of
warranty expiration.
(b) Monthly Contract Status Report. The Contractor shall include
the following information in the monthly report:
1) Delivery Status: The Monthly Contract Status Report shall
provide a monthly delivery status including, at a minimum: delivery order
number, site identification, CLIN number, quantity, equipment description, order
date, delivery date, quantity shipped, quantity received, confirmed delivery
date, reason for late delivery, problems with delivery, partial shipment
information, date order rejected, reasons for rejection, total quantities
ordered by CLIN, and total cost of equipment/software by CLIN.
2) New Orders Received: The Monthly Contract Status Report
shall provide a listing of new orders received including, at a minimum: a
summary of new orders received during the previous month listing delivery order
numbers, locations, quantities, total cost, and planned delivery dates.
3) Maintenance and Warranty Support Incidents: The Monthly
Contract Status Report shall provide a listing of warranty support and
maintenance incidents including, at a minimum: a summary of maintenance support
calls by location and type of device for the previous month, and a summary of
all warranty support performed during the previous month, by location and number
of hours, including a narrative summary of problems and corrective actions
taken.
K. Labeling. All hardware CLINs, except cables and internal boards, shall
contain a permanently affixed label that indicates a serial number. The label
shall be externally visible.
L. Production and Delivery Capability The Contractor shall have the
capability to produce and deliver the quantities of systems to meet fluctuating
Government requirements. The contractor shall propose a delivery time schedule
for all orders placed by the Government.
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SECTION D - PACKAGING AND MARKING USCA-95-C-004
Table of Contents
Page
D.1 - PACKAGING AND MARKING ............................................ D - 1
Page D - 1
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SECTION D - PACKAGING AND MARKING USCA-95-C-004
D.1 PACKAGING AND MARKING
Preservation, packaging, and marking for all items delivered hereunder
shall be in accordance with commercial practice and adequate to insure
acceptance by common carrier and safe arrival at destination. The Contractor
shall place the contract number and delivery order number on or adjacent to the
exterior shipping label.
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SECTION E - INSPECTION AND ACCEPTANCE USCA-95-C-004
Table of Contents
E.1. 52.246-2 INSPECTION OF SUPPLIES
- FIXED-PRICE. (JUL 1985) ................................... E - 2
E.2. 52.246-4 INSPECTION OF SERVICES
- FIXED-PRICE. (FEB 1992) ................................... E - 4
E.3 FORMAL ACCEPTANCE OF EQUIPMENT, SOFTWARE,
AND SERVICES ................................................ E - 5
E.3.1 DATE OF ACCEPTANCE ....................................... E - 6
E.4 STANDARD OF PERFORMANCE AND ACCEPTANCE OF
EQUIPMENT ................................................... E - 6
E.4.1 STANDARD OF PERFORMANCE PERIOD FOR
ACCEPTANCE TESTING .................................... E - 6
E.4.2 PERFORMANCE PERIOD ....................................... E - 7
E.4.3 CONTINUANCE OF PERFORMANCE PERIOD ........................ E - 7
E.4.4 FAILURE TO MEET STANDARD OF PERFORMANCE .................. E - 7
E.4.5 DELAY OF START OF PERFORMANCE PERIOD ..................... E - 7
E.5. GOVERNMENT APPROVING AND ACCEPTING AUTHORITY ................... E - 7
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SECTION E - INSPECTION AND ACCEPTANCE USCA-95-C-004
E.l. 52.246-2 INSPECTION OF SUPPLIES - FIXED-PRICE. (JUL 1985)
(a) Definition. "Supplies," as used in this clause, includes but is not
limited to raw materials, components, intermediate assemblies, end products, and
lots of supplies.
(b) The Contractor shall provide and maintain an inspection system
acceptable to the Government covering supplies under this contract and shall
tender to the Government for acceptance only supplies that have been inspected
in accordance with the inspection system and have been found by the Contractor
to be in conformity with contract requirements. As part of the system, the
Contractor shall prepare records evidencing all inspections made under the
system and the outcome. These records shall be kept complete and made available
to the Government during contract performance and for as long afterwards as the
contract requires. The Government may perform reviews and evaluations as
reasonably necessary to ascertain compliance with this paragraph. These reviews
and evaluations shall be conducted in a manner that will not unduly delay the
contract work. The right of review, whether exercised or not, does not relieve
the Contractor of the obligations under the contract.
(c) The Government has the right to inspect and test all supplies called
for by the contract, to the extent practicable, at all places and times,
including the period of manufacture, and in any event before acceptance. The
Government shall perform inspections and tests in a manner that will not unduly
delay the work. The Government assumes no contractual obligation to perform any
inspection and test for the benefit of the Contractor unless specifically set
forth elsewhere in this contract.
(d) If the Government performs inspection or test on the premises of the
Contractor or a subcontractor, the Contractor shall furnish, and shall require
subcontractors to furnish, without additional charge, all reasonable facilities
and assistance for the safe and convenient performance of these duties. Except
as otherwise provided in the contract, the Government shall bear the expense of
Government inspections or tests made at other than the Contractor's or
subcontractor's premises; provided, that in case of rejection, the Government
shall not be liable for any reduction in the value of inspection or test
samples.
(e) (1) When supplies are not ready at the time specified by the
Contractor for inspection or test, the Contracting Officer may
charge to the Contractor the additional cost of inspection or test.
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SECTION E - INSPECTION AND ACCEPTANCE USCA-95-C-004
(2) The Contracting Officer may also charge the Contractor for any
additional cost of inspection or test when prior rejection makes
reinspection or retest necessary.
(f) The Government has the right either to reject or to require correction
of nonconforming supplies. Supplies are nonconforming when they are defective in
material or workmanship or are otherwise not in conformity with contract
requirements. The Government may reject nonconforming supplies with or without
disposition instructions.
(g) The Contractor shall remove supplies rejected or required to be
corrected. However, the Contracting Officer may require or permit correction in
place, promptly after notice, by and at the expense of the Contractor. The
Contractor shall not tender for acceptance corrected or rejected supplies
without disclosing the former rejection or requirement for correction, and, when
required, shall disclose the corrective action taken.
(h) If the Contractor fails to promptly remove, replace, or correct
rejected supplies that are required to be removed or to be replaced or
corrected, the Government may either (1) by contract or otherwise, remove;
replace, or correct the supplies and charge the cost to the Contractor or (2)
terminate the contract for default. Unless the Contractor corrects or replaces
the supplies within the delivery schedule, the Contracting Officer may require
their delivery and make an equitable price reduction. Failure to agree to a
price reduction shall be a dispute.
(i) (1) If this contract provides for the performance of Government
quality assurance at source, and if requested by the Government, the
Contractor shall furnish advance notification of the time (i) when
Contractor inspection or tests will be performed in accordance with
the terms and conditions of the contract and (ii) when the supplies
will be ready for Government inspection.
(2) The Governments request shall specify the period and method of
the advance notification and the Government representative to whom
it shall be furnished. Requests shall not require more than 2
workdays of advance notification if the Government representative is
in residence in the Contractor's plant, nor more than 7 workdays in
other instances.
(j) The Government shall accept or reject supplies as promptly as
practicable after delivery, unless otherwise provided in the
Page E - 3
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SECTION E - INSPECTION AND ACCEPTANCE USCA-95-C-004
contract. Government failure to inspect and accept or reject the supplies shall
not relieve the Contractor from responsibility, nor impose liability on the
Government, for nonconforming supplies.
(k) Inspections and tests by the Government do not relieve the Contractor
of responsibility for defects or other failures to meet contract requirements
discovered before acceptance. Acceptance shall be conclusive, except for latent
defects, fraud, gross mistakes amounting to fraud, or as otherwise provided in
the contract.
(1) If acceptance is not conclusive for any of the reasons in paragraph
(k) hereof, the Government, in addition to any other rights and remedies
provided by law, or under other provisions of this contract, shall have the
right to require the Contractor (1) at no increase in contract price, to correct
or replace the defective or nonconforming supplies at the original point of
delivery or at the Contractor's plant at the Contracting Officer's election, and
in accordance with a reasonable delivery schedule as may be agreed upon between
the Contractor and the Contracting Officer; provided, that the Contracting
Officer may require a reduction in contract price if the Contractor fails to
meet such delivery schedule, or (2) within a reasonable time after receipt by
the Contractor of notice of defects or non-conformance, to repay such portion
of the contract as is equitable under the circumstances if the Contracting
Officer elects not to require correction or replacement. When supplies are
returned to the Contractor, the Contractor shall bear the transportation cost
from the original point of delivery to the Contractor's plant and return to the
original point when that point is not the Contractor's plant. If the Contractor
fails to perform or act as required in (1) or (2) above and does not cure such
failure within a period of 10 days (or such longer period as the Contracting
Officer may authorize in writing) after receipt of notice from the Contracting
Officer specifying such failure, the Government shall have the right by contract
or otherwise to replace or correct such supplies and charge to the Contractor
the cost occasioned the Government thereby.
E.2. 52.246-4 INSPECTION OF SERVICES - FIXED-PRICE. (FEB 1992)
(a) Definitions. "Services," as used in this clause, includes services
performed, workmanship, and material furnished or utilized in the
performance of services.
(b) The Contractor shall provide and maintain an inspection system
acceptable to the Government covering the services under this contract.
Complete records of all inspection work
Page E - 4
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SECTION E - INSPECTION AND ACCEPTANCE USCA-95-C-004
performed by the Contractor shall be maintained and made available to the
Government during contract performance and for as long afterwards as the
contract requires.
(c) The Government has the right to inspect and test all services called
for by the contract, to the extent practicable at all times and places
during the term of the contract. The Government shall perform inspections
and tests in a manner that will not unduly delay the work.
(d) If the Government performs inspections or tests on the premises of the
Contractor or a subcontractor, the Contractor shall furnish, and shall
require subcontractors to furnish, without additional charge, all
reasonable facilities and assistance for the safe and convenient
performance of these duties.
(e) If any of the services do not conform with contract requirements, the
Government may require the Contractor to perform the services again in
conformity with contract requirements, at no increase in contract amount.
When the defects in services cannot be corrected by re-performance, the
Government may (1) require the Contractor to take necessary action to
ensure that future performance conforms to contract requirements and (2)
reduce the contract price to reflect the reduced value of the services
performed.
(f) If the Contractor fails to promptly perform the services again or to
take the necessary action to ensure future performance in conformity with
contract requirements, the Government may (1) by contract or otherwise,
perform the services and charge to the Contractor any cost incurred by the
Government that is directly related to the performance of such service or
(2) terminate the contract for default.
E. 3 FORMAL ACCEPTANCE OF EQUIPMENT, SOFTWARE, AND SERVICES
Acceptance of deliverable items under this contract will be in two
segments. The first is the completion of the delivery portion of the
transaction. After inspection of the system/component received at the delivery
site, the appropriate Government approving and accepting authority will complete
the delivery order acceptance form. Successful completion of the inspection and
acceptance will be acknowledged on the receiving copy of the delivery order.
Page E - 5
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SECTION E - INSPECTION AND ACCEPTANCE USCA-95-C-004
E.3.1 DATE OF ACCEPTANCE
The Government shall not accept equipment and shall not pay charges until
the standard of performance is met. The date of acceptance shall be the first
day of the successful performance period.
E.4 STANDARD OF PERFORMANCE AND ACCEPTANCE OF EQUIPMENT
The second segment of the acceptance process is a standard of performance
which shall be met before any equipment installed under this contract is fully
acceptable to the Government. This includes replacements, substitute machines,
which are added or field modified (modification of a machine from one model to
another) after a system has completed a successful performance period. Machines
undergoing minor modification or intra-governmental transfer which have already
passed the performance test are excluded from this provision. The standard of
performance acceptance phase shall take place at the equipment delivery site(s).
During this Standard of Performance for Acceptance of Hardware period the
accepting activity's normal or daily work load shall be processed. All systems
shall operate in conformance with the Contractor's technical specifications and
functional descriptions, or as quoted in the Contractor's proposal, which must
satisfy the requirements of Section C. The approving official for this segment
is the same individual cited in the delivery order.
E.4.1 STANDARD OF PERFORMANCE PERIOD FOR ACCEPTANCE TESTING
Unless the start of the performance period is delayed in accordance with
Paragraph E.4.5, the performance period for acceptance testing shall begin on
the first normal workday after installation of the hardware/software. The
performance period shall end when the equipment has met the standard of
performance for a period of ten (10) consecutive workdays, by operating in
conformance with the contract specification, and the offeror's technical
specifications, as quoted in the offeror's proposal at an effective level. The
effective level of for a system or machine is considered achieved when the
system or component has operated for ten (10) consecutive workdays with not more
than one (1) service call. If the system or component is down for three (3)
consecutive workdays, the system or component may be replaced, at the
government's option at no cost to the government. Upon replacement, a new
acceptance period will begin.
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SECTION E - INSPECTION AND ACCEPTANCE USCA-95-C-004
E.4.2 PERFORMANCE PERIOD
The performance period shall begin on the first working day following
receipt of equipment for Government installation (unless delayed in accordance
with paragraph E.4.5) and shall end when the equipment has met the standard of
performance for a period of ten (10) consecutive workdays operating in
conformance with Section E.4.
E.4.3 CONTINUANCE OF PERFORMANCE PERIOD
If the equipment does not meet the standard of performance during the
initial ten (10) consecutive workdays, the performance period shall continue on
a day-by-day basis until the standard of performance is met for a total of ten
(10) consecutive workdays.
E.4.4 FAILURE TO MEET STANDARD OF PERFORMANCE
If the equipment fails to meet the standard of performance, the Government
may at its option request a replacement or terminate the delivery order for
default and request the immediate removal of the equipment.
E.4.5 DELAY OF START OF PERFORMANCE PERIOD
If necessary, the Government may delay the start of the performance
period, but such a delay shall not exceed 30 consecutive work days, therefore,
the performance period must start not later than the 31st work day after the
installation date unless otherwise mutually agreed.
E.5 GOVERNMENT APPROVING AND ACCEPTING AUTHORITY
The approving and accepting authority for the Government will be specified
in each delivery order.
Page E - 7
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SECTION F - DELIVERIES OR PERFORMANCE USCA-95-C-004
Table of Contents
Page
F.1 TERM OF CONTRACT ................................................. F - 2
F.2 LIQUIDATED DAMAGES (HARDWARE/SOFTWARE) ........................... F - 2
F.2.1 Total System .......................................... F - 2
F.2.2 Partial Shipment ...................................... F - 2
F.2.3 Equipment (Hardware) .................................. F - 3
F.2.3.1 Substitute Equipment; (Provided by the
Contractor) ......................................... F - 3
F.2.3.2 Replacement Equipment; (Provided by another
source) ............................................. F - 3
F.2.4 Software .............................................. F - 3
F.2.4.1 Replacement Software .................................. F - 3
F.2.4.2 Substitute Software ................................... F - 3
F.2.5 Exception ............................................. F - 4
F.3 TRANSPORTATION OF EQUIPMENT ...................................... F - 4
F.3.1 Transportation ........................................ F - 4
F.3.2 Rigging and Drayage ................................... F - 4
F.4 DELIVERY REQUIREMENTS AND OPTIONS ................................ F - 5
F.4.1 Delay of Installation ................................. F - 5
F.4.2 Receipt of Order ...................................... F - 5
F.4.3 Deliverable Items/Delivery Time ....................... F - 5
F.5 MAINTENANCE SUPPORT ............................................. F - 5
F.6 CLAUSES INCORPORATED BY REFERENCE ................................ F - 6
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SECTION F - DELIVERIES OR PERFORMANCE A-95-C-004
F.1 TERM OF CONTRACT
The initial term of this contract is from date of award through September
30, 1996. Total term of this contract shall not exceed 48 months as set forth in
I.9. This contract is awarded pursuant to a specific delegation of procurement
authority (DPA) from the General Services Administration.
F. 2 LIQUIDATED DAMAGES (HARDWARE/SOFTWARE)
The time for delivery for items ordered under this contract is thirty (30)
days after receipt of the delivery order by the offeror. For non-delivery of
equipment or software the Contractor shall pay to the Government liquidated
damages for each calendar day in excess of the required 30-day period, but for
not more than 100 days. Liquidated damages shall be assessed in the amount of 1%
of the purchase price, for each calendar day for each such item not delivered
starting on the thirty-first (31) day after receipt of the delivery order by the
Contractor.
For nondelivery of hardware/software, the Contractor shall pay liquidated
damages to the Government. These damages are as follows:
F.2.1 Total System
The Contractor shall deliver all the equipment and operating
software specified in the delivery order, in accordance with his
functional specifications (identified in Section C), including the special
features and accessories included on the same order with the equipment and
software. If the Contractor fails to fulfill this requirement and, as a
result, no portion of the total system is received by the specified
delivery date, then the liquidated damages shall be assessed. Such
liquidated damages shall be computed per F.2.
F.2.2 Partial Shipment
If some, but not all, of the equipment and software on order is
delivered by the specified delivery date, and if the Government uses any
such equipment and/or delivered software, liquidated damages shall not
accrue against these items for any calendar day on which they are used. In
this event, for each day's delay, the Contractor shall pay liquidated
damages per F.2, for each item of equipment and
Page F - 2
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SECTION F - DELIVERIES OR PERFORMANCE USCA-95-C-004
software not delivered, as well as for each delivered item which as a
result cannot be used by the Government.
F.2.3 Equipment (Hardware).
F.2.3.1 Substitute Equipment; (Provided by the Contractor).
If the Contractor provides suitable substitute equipment, acceptable
to the Government, on or before the specified delivery date, no liquidated
damages shall apply to ordered equipment for which substitute equipment
was accepted.
F.2.3.2 Replacement Equipment; (Provided by another source).
If the Contractor fails to deliver all the equipment identified on
the delivery order, including the special features and accessories
included on the same order with the equipment, then the Government may
obtain replacement equipment. In this event, the Contractor shall be
liable for liquidated damages per F.2, until replacement equipment is
received either from the Contractor or another source.
F.2.4 Software.
If the Contractor fails to deliver, on or before the specified
delivery date, all of the ordered software (as set forth in the delivery
order) or if the delivered operating software fails to conform to the
functional descriptions set forth in Section C, then the provisions of
F.2., liquidated damages, shall apply.
F.2.4.1 Replacement Software.
If the Contractor fails to deliver all the software identified on
the delivery order, then the Government may obtain replacement software.
In this event, the Contractor shall be liable for liquidated damages, set
forth in Section F.2, from the delivery date specified in the delivery
order until replacement software is delivered.
F.2.4.2 Substitute Software.
If the Contractor provides suitable substitute software, acceptable
to the Government, on or before the specified delivery date, no liquidated
damages shall apply
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SECTION F - DELIVERIES OR PERFORMANCE USCA-95-C-004
to ordered software for which substitute software was accepted.
F.2.5 Exception.
The Contractor shall not be liable for liquidated damages when delays
arise from causes beyond the control of and without the fault or negligence
of the Contractor (Subcontractor defaults are covered in the paragraph
below). Such causes may include, but are not restricted to, Acts of God or
of the public enemy, acts of the Government in either its sovereign or
contractual capacity, fires, floods, epidemics, quarantine restrictions,
strikes, freight embargoes, and unusually severe weather; but in every case
the delay must be beyond the control of and without the fault or negligence
of the Contractor.
If the delays are caused by the default of a subcontractor, and such
default arises out of causes beyond the control of both the Contractor and
the subcontractor and without the fault or negligence of either of them,
the Contractor shall not be liable for liquidated damages for delays,
unless the supplies or services to be furnished by the subcontractor were
obtainable from other sources in sufficient time to permit the Contractor
to meet the required performance schedule. Such causes may include, but are
not restricted to, Acts of God or of the public enemy, acts of the
Government in either its sovereign or contractual capacity, fires, floods,
epidemics, quarantine restrictions, strikes, freight embargoes, and
unusually severe weather; but in every case the delay must be beyond the
control of and without the fault or negligence of both the Contractor and
subcontractor.
F.3 TRANSPORTATION OF EQUIPMENT
F.3.1 Transportation.
All shipments to and from the site(s) specified in the delivery order
shall be made at the Contractor's expense. The Contractor shall make all
arrangements for transportation and shipment on Commercial Bills of Lading.
F.3.2 Rigging and Drayage.
The Government shall pay only those rigging and drayage costs incurred
at the Government's location except that the
Page F - 4
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SECTION F - DELIVERIES OR PERFORMANCE USCA-95-C-004
Contractor shall pay all rigging and drayage costs when the equipment is
moved for mechanical replacement purposes.
F.4 DELIVERY REQUIREMENTS AND OPTIONS
F.4.1 Delay of Installation.
The Government reserves the right to delay the delivery date (as
specified on the delivery order) by up to thirty (30) days at no additional
cost to the Government, provided that:
a. The Contractor will receive written notice from the Contracting
Officer or designated COTR fifteen (15) working days prior to the
scheduled delivery date.
b. Any delivery delays beyond thirty (30) calendar days shall be mutually
agreed to by the Contractor and the Government.
F.4.2 Receipt of Order.
In the absence of contrary evidence a Delivery Order shall be
presumed received by the Contractor when issued and placed in the mail,
'Faxed' or hand delivered to the Contractor.
F.4.3 Deliverable Items/Delivery Time.
Deliverable items required hereunder are specified as to item
number and item description in Section B of the contract. The actual
quantities to be provided as well as the locations shall be stated in each
delivery order issued pursuant to this contract. Delivery shall be within
30 days after receipt of a delivery order.
F.5 MAINTENANCE SUPPORT
If the Contractor fails to respond to and provide maintenance/warranty
support as detailed and accepted by the Government in their response to
Solicitation Section C-3.1(1), liquidated damages shall accrue at the rate
of $100/day until such time as the Contractor provides the required
maintenance support or replacement, not to exceed the purchase price of the
equipment which cannot be used due to failure to repair or replace.
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SECTION F - DELIVERIES OR PERFORMANCE USCA-95-C-004
F.6 CLAUSES INCORPORATED BY REFERENCE
STOP-WORK ORDER (APR 1984) FAR 52.212-13
GOVERNMENT DELAY OF WORK (APR 1984) FAR 52.212-15
F.O.B. DESTINATION FAR 52.247-34
Page F - 6
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SECTION G - CONTRACT ADMINISTRATION DATA USCA-95-C-004
Table of Contents
Page
G.1 PAYMENT DUE DATE ..................................................... 2
G.2 INVOICE REQUIREMENTS.................................................. 2
G.3 DISCOUNTS FOR PROMPT PAYMENT (APR 1989)............................... 3
G.4 ADDITIONAL INVOICE AND PAYMENT PROVISION.............................. 3
G.4.1 INVOICES FOR FULL MONTH.................................. 3
G.4.2 RESERVED................................................. 3
G.4.3 CREDITS.................................................. 3
G.4.4 PURCHASE INVOICE AND PAYMENT PROVISION................... 4
G.5 METHOD OF PAYMENT..................................................... 5
G.6 52.232-28 ELECTRONIC FUNDS TRANSFER PAYMENT
METHOD (APR 1989).............................................. 5
G.7 AUTHORITIES OF GOVERNMENT PERSONNEL.................................. 7
G.7.1 CONTRACTING OFFICER.......................................... 7
G.7.2 CONTRACTING OFFICER'S TECHNICAL.
REPRESENTATIVE............................................... 7
G.8 INTEREST ON OVERDUE PAYMENTS.......................................... 8
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SECTION G - CONTRACT ADMINISTRATION DATA USCA-95-C-004
G.1 PAYMENT DUE DATE
a. Payments under this contract will be due on the 30th calendar day after the
latter of:
(1) The date of actual receipt of a proper invoice in the office
designated to receive the invoice, or
(2) The date the services are accepted by the Government.
b. The date of the check issued in payment or the date of payment by wire
transfer through the Treasury Financial Communications System shall be
considered to be the date payment is made.
G.2 INVOICE REQUIREMENTS
a. Invoices shall be submitted in an original and two (2) copies to the
address specified on the delivery order. To constitute a proper invoice,
the invoice must include the following information and/or attached
documentation:
(1) Name of the business concern and invoice date.
(2) Contract number, or other authorization for delivery of property or
services.
(3) Description, price, and quantity of property and services actually
delivered or rendered.
(4) Shipping and Payment terms.
(5) Name (where practicable), title, phone number, and complete mailing
address of responsible official to whom payment is to be sent. The
"remit to" address must correspond to the remittance address in the
contract.
(6) Other substantiating documentation, reports, or information as
required by the contract.
b. To assist the Government in making timely payments, the Contractor shall
furnish the following additional information either on the invoice or on an
attachment to the invoice:
(1) Date(s) that property was delivered or services rendered.
(2) Address where services were rendered.
(3) Credits (if applicable).
(4) Contractor's complete remittance or check mailing address.
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SECTION G - CONTRACT ADMINISTRATION DATA USCA-95-C-004
(5) Delivery Order Number
(6) Serial Numbers of Property Delivered
G.3 DISCOUNTS FOR PROMPT PAYMENT
a. Discounts for early payment will not be considered in the evaluation of
offers. However, any offered discount will form a part of the award, and
will be taken if payment is made within the discount period indicated in
the offer by the offeror. As an alternative to offering a prompt payment
discount in conjunction with the offer, offerors awarded contracts may
include prompt payment discounts on individual invoices.
b. In connection with any discount offered for prompt payment, time shall be
computed from the date of the invoice. For the purpose of computing the
discount earned, payment shall be considered to have been made on the date
which appears on the payment check or the date on which an electronic funds
transfer was made.
c. The ending date of the discount period will be determined by applying the
number of calendar days specified by the contractor beginning with the
later of:
(1) The date of completion of performance of the services, or
(2) The date a proper invoice or voucher is received in the office
specified by the Government.
G.4 ADDITIONAL INVOICE AND PAYMENT PROVISION
G.4.1 INVOICES FOR FULL MONTH
The Contractor shall render invoices (original and 2 copies) for basic
charges at the end of the month for which the charges accrue. (See General
Provisions G.1, Payment Due Date, and G.2, Invoice Requirements.)
G.4.2 RESERVED
G.4.3 CREDITS
Any credits due the Government shall be applied against the Contractor's
invoices with appropriate information attached.
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SECTION G - CONTRACT ADMINISTRATION DATA USCA-95-C-004
G.4.4 PURCHASE INVOICE AND PAYMENT PROVISION
a. The Contractor shall be paid, upon submission of proper invoice after
acceptance of services and deliverables. (E.1, E.2, Inspection of
Services/Supplies - Fixed Price, E.6, Standard of Performance and
Acceptance of Equipment; G.1, Payment Due Date; and G.2, Invoice
Requirements.)
b. Payment of invoices will be made based upon acceptance by the Government of
the complete service or the tangible product deliverable(s) invoiced. For
any services that have no tangible products, payments will be based upon
certification by the Government of satisfactory service provided.
c. If the supplies or services are rejected for failure to conform to the
technical requirements of the contract, or for damage in transit or
otherwise, the provisions in paragraph a. of this clause will apply to the
new delivery of replacement supplies.
d. Payment to the Contractor will not be made for temporary work stoppage due
to circumstances beyond the control of the agency such as Acts of God,
inclement weather, power outages, etc., and results thereof, and/or
temporary closing of facilities at which contractor personnel are
performing. This may, however, be justification for excusable delays.
e. Normally no overtime payments will be made on this contract. However, the
Contracting Officer may authorize payment for overtime by non-exempt
contractor employees, at the rate of one and one-half times the applicable
direct labor rate, when required to meet any task order requirements on a
bona fide exigency basis. The Contractor must receive the approval of the
Contracting Officer for all overtime prior to it being performed. Overtime
will not be authorized to compensate for shortcomings in contractor
performance.
f. Final services will be so identified and submitted monthly when tasks have
been completed and no further charges are to be incurred. A copy of the
written acceptance of any service completion must be attached.
g. An Invoice Summary Report will be submitted monthly and contain the
following information:
1. Contractor payment address.
2. Contract Number/Purchase Order Number/Task Number
Page G - 4
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SECTION G - CONTRACT ADMINISTRATION DATA USCA-95-C-004
3. Invoiced Period.
4. Detail of monthly invoices.
(a) Invoice type and number.
(i) Support service authorized amount.
(ii) Total invoice amount (cumulative to date).
(iii) Total invoice amount (current month).
(iv) Prompt payment discount amount.
(v) Prompt payment invoice amount.
(vi) Skill level number and total hours for skill level including
employee name and total hours for each employee.
(b) Sub-totals by invoice type.
(c) Monthly totals for all support service invoices.
G.5 METHOD OF PAYMENT
a. Payments under this contract will be made either by check or by
electronic funds transfer through the Treasury Financial
Communications System at the option of the Government.
b. The Contractor shall forward the following information in writing to
the Contracting Officer located at:
Administrative Office of U.S. Courts
Automation Resources Division
ADP Contracting Branch
One Columbus Circle, NE, Suite 3-100
Washington, D.C. 20544
ATTN: L. Henry Weeks
not later than 7 days after receipt of notice of award.
(1) Full name (where practicable), title, phone number, and complete
mailing address of responsible official(s) (i) to whom check
payments are to be sent, and (ii) who may be contacted concerning
the bank account information requested in Section G.7.
G.6 52.232-26 ELECTRONIC FUNDS TRANSFER PAYMENT METHOD
(APR 1989)
Payments under this contract will be made either by check or electronic
funds transfer (through the Treasury Fedline Payment System (FEDLINE) or the
Automated Clearing House (ACH), at the option of the Government. After award,
but no later than 14 days before an invoice or contract financing request is
submitted, the
Page G - 5
<PAGE>
SECTION G - CONTRACT ADMINISTRATION DATA USCA-95-C-004
Contractor shall designate a financial institution for receipt of electronic
funds transfer payments, and shall submit this designation to the Contracting
Officer or other Government official, as directed.
a. For payment through FEDLINE, the Contractor shall provide the following
information:
(1) Name, address, and telegraphic abbreviation of the financial
institution receiving payment.
(2) The American Bankers Association 9-digit identifying number for wire
transfers of the financing institution receiving payment if the
institution has access to the Federal Reserve Communications System.
(3) Payee's account number at the financial institution where funds are to
be transferred.
(4) If the financial institution does not have access to the Federal
Reserve Communications System, name, address and telegraphic
abbreviation of the correspondent financial institution through which
the financial institution receiving payment obtains wire transfer
activity, provide the telegraphic abbreviation and American Bankers
Association identifying number for the correspondent institution.
b. For payment through ACH, the Contractor shall provide the following
information:
(1) Routing transit number of the financial institution receiving payment
(same as American Bankers Association identifying number used for
FEDLINE).
(2) Number of account to which funds are to be deposited.
(3) Type of depositor account ("C" for checking, "S" for savings).
(4) If the Contractor is a new enrollee to the ACH system, a "Payment
Information Form", SF3881 must be completed before payment can be
processed.
c. In the event the Contractor, during the performance of this contract,
elects to designate a different financial institution for the receipt of
any payment made using electronic funds transfer procedures1 notification
of such change and the required information specified above must be
received by the appropriate Government official (30) days prior to the date
such change is to become effective.
d. The documents furnishing the information required in this clause must be
dated and contain the signature, title, and
Page G - 6
<PAGE>
SECTION G - CONTRACT ADMINISTRATION DATA USCA-95-C-004
telephone number of the Contractor official authorized to provide it, as
well as the Contractor's name and Contract Number.
Contractor failure to properly designate a financial institution or to
provide appropriate payee bank account information may delay payments of
amounts otherwise properly due.
G.7 AUTHORITIES OF GOVERNMENT PERSONNEL
Notwithstanding the Contractor's responsibility for total management of
this contract, the administration of the contract will require maximum
coordination between the Government and the Contractor. The following
individuals will be the Government's points of contact during the performance of
the contract:
G.7.1 CONTRACTING OFFICER
The Contracting Officer will be L. Henry Weeks. The Contractor shall
forward all communications pertaining to contractual and/or administrative
matters to the Contracting Officer located at:
Administrative Office of U.S. Courts,
Automation Resources Division
ADP Contracting Branch
One Columbus Circle1 NE, Suite 3-100
Washington, D.C. 20544
ATTN: L. Henry Weeks
G.7-2 CONTRACTING OFFICER'S TECHNICAL REPRESENTATIVE (COTR)
The COTR after contract award, will be the Kathy Keener, Integrated
Technology Division or his/her designee. The COTR will receive for the
Government any additional work called for and will represent the CO in the
technical phases of the work. The COTR will provide no supervisory or
instructional assistance to Contractor's personnel. The COTR is not authorized
to change any of the terms and conditions of the contract. Changes in scope
shall be made only by the CO by properly executed modifications to the contract.
Responsibilities of the COTR include:
a. Monitoring the Contractor's performance to ensure compliance with technical
requirements of the task.
Page G - 7
<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS USCA-95-C-004
Table of Contents
Page
H.1 FIRMR 201-39.5202-6 WARRANTY EXCLUSION AND LIMITATION
OF DAMAGES (OCT 90 FIRMR)....................................... H - 2
H.2 REPLACEMENT PARTS AVAILABILITY.................................. H - 2
H.3 ENGINEERING CHANGES............................................. H - 2
H.4 PROJECT MANAGEMENT RESPONSIBILITY............................... H - 4
H.5 MINIMUM GUARANTEE .............................................. H - 5
H.6 SUBSTITUTIONS AND TECHNOLOGY UPGRADES........................... H - 5
H.6.1 Substitution of Functionally Equivalent
Replacement Product...................................... H - 5
H.6.2 Technology Upgrade....................................... H - 6
H.7 PRICE REDUCTION.................................................. H - 7
H.8 INSURANCE........................................................ H - 8
Page H - 1
<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS USCA-95-C-004
H.1 FIRMR 201-39.5202-6 WARRANTY EXCLUSION AND LIMITATION OF DAMAGES (OCT 90
FIRMR)
Except as expressly set forth in writing in this agreement, and except for
the implied warranty of merchantability, there are no warranties expressed or
implied.
In no event will the Contractor be liable to the Government for
consequential damages as defined in the Uniform Commercial Code, Section 2-715,
in effect in the District of Columbia as of January 1, 1973, i.e.--
Consequential damages resulting from the seller's breach include:
a. Any loss resulting from general or particular requirements and needs of
which the seller at the time of contracting had reason to know and which
could not reasonably be prevented by cover or otherwise; and
b. Injury to person or property proximately resulting from any breach of
warranty.
H.2 REPLACEMENT PARTS AVAILABILITY
The Contractor guarantees that replacement parts for each machine in this
contract will be available for the systems (items) life of forty-eight (48)
months. The Contractor shall notify the Government 180 days before the end of
the systems (items) life as to the continuing availability of parts subsequent
to this period. If parts will not be available from the Contractor, then the
Government may require the Contractor to furnish data that is available to
assist the Government to obtain such parts from another source.
H.3 ENGINEERING CHANGES
a. After contract award, the Government may solicit, and the Contractor is
encouraged to propose independently, engineering changes to the equipment,
software specifications, or other requirements of this contract. These
changes may be proposed to save money, to improve performance, to save
energy, or to satisfy increased data processing requirements. However, if
proposed changes relating to improved performance are necessary to meet
increased data processing requirements of the user, those requirements
shall not exceed the contract requirements by more than fifty percent
(50%). If the proposed changes are
Page H - 2
<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS USCA-95-C-004
acceptable to both parties, the Contractor shall submit a price change
proposal to the Government for evaluation. Those proposed engineering
changes that are acceptable to the Government will be processed as
modifications to the contract.
b. This H.3. applies only to those proposed changes identified by the
Contractor, as a proposal submitted pursuant to the provisions of this
clause. As a minimum, the following information shall be submitted by the
Contractor with each proposal:
(1) A contract requirement and the proposed change, and the comparative
advantages and disadvantages of each;
(2) Itemized requirements of the contract which must be changed if the
proposal is adopted, and the proposed revision to the contract for
each such change;
(3) An estimate of the changes in performance and cost, if any, that will
result from adoption of the proposal;
(4) An evaluation of the effects the proposed change would have on
collateral costs to the Government, such as Government-furnished
property costs, costs of related items, and costs of maintenance and
operation;
(5) A statement of the time by which the change order adopting the
proposal must be issued so as to obtain the maximum benefits of the
changes during the remainder of this contract. Also, any effect on the
contract completion time or delivery schedule shall be identified.
c. Engineering change proposals submitted to the Contracting Officer shall be
processed expeditiously. The Government shall not be liable for proposal
preparation costs or any delay in acting upon any proposal submitted
pursuant to this clause. The Contractor has the right to withdraw, in whole
or in part, any engineering change proposal not accepted by the Government
within the period specified in the engineering change proposal. The
decision of the Contracting Officer as to the acceptance of any such
proposal under this contract shall be final and shall not be subject to the
"Disputes" clause of this contract.
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<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS USCA-95-C-004
d. The Contracting Officer may accept any engineering change proposal
submitted pursuant to this clause by giving the Contractor written notice
thereof. This written notice may be given by issuance of a modification to
this contract. Unless and until a modification is executed to incorporate
an engineering change proposal under this contract, the Contractor shall
remain obligated to perform in accordance with the terms of the existing
contract.
e. If an engineering change proposal submitted pursuant to this clause is
accepted and applied to this contract, an equitable adjustment in the
contract price and in any other affected provisions of this contract shall
be made in accordance with this clause and other applicable clauses of this
contract. When the cost of performance of this contract is increased or
decreased as a result of the change, the equitable adjustment increasing or
decreasing the contract price shall be in accordance with the "Changes"
clause rather than under this clause, but the resulting contract
modification shall state that it is made pursuant to this clause.
f. The Contractor is requested to identify specifically any information
contained in the engineering change proposal which the Contractor considers
confidential and/or proprietary and which the Contractor prefers not be
disclosed to the public. The identification of information as confidential
and/or proprietary is for information purposes only and shall not be
binding on the Government to prevent disclosure of such information.
H.4 PROJECT MANAGEMENT RESPONSIBILITY
The Contractor shall appoint a Project Manager who will be the Contractor's
Authorized Representative for technical and administrative performances of all
services required hereunder. The Project Manager shall provide the single point
of contact through which all Contractor/Government communications, work, and
technical direction shall flow. The Project Manager shall receive and execute,
on behalf of the Contractor, such technical direction as the COTR may issue
within the terms and conditions of the contract. All administrative support of
the Contractor technical personnel required to fulfill the tasks assigned under
this contract shall be the responsibility of the Contractor.
Page H - 4
<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS USCA-95-C-004
H.5 MINIMUM GUARANTEE
The Government shall order an amount equal to $250,000 under the purchase
provisions of this contract during the initial term subject to the availability
of funds.
H.6 SUBSTITUTIONS AND TECHNOLOGY UPGRADES
H.6.1 Substitution of Functionally Equivalent Replacement Product.
a. After contract award, the Contractor may initiate proposals, or the
Government may request a proposal, for the substitution or replacement
of hardware or software called for in this contract, but which is no
longer in production at the time of scheduled delivery, by existing or
newly announced Contractor hardware or software. For each item of
equipment or software proposed as a substitute, the Contractor shall
certify and provide documentation to support:
(1) that the functionality for the substitute equipment or software
is equal to or greater than the equipment or software for which
the substitute is proposed;
(2) that the substitute equipment or software is a) a commercial
item, b) sold to the general public, c) sold at an established
commercial price, and d) sold in substantial quantities (note:
the Contractor shall provide the established commercial price
list(s) for the substitute equipment);
(3) that the unit price for the substitute equipment or software is
not greater than the unit price for the equipment or software for
which the substitute is proposed; however, if at the time of the
substitution, the replacement product has a lower published
commercial or GSA Schedule price or a lower price charged to its
most favored customer, under comparable terms and conditions,
then the lower price shall be paid in lieu of the stated price in
Section B;
(4) that the maintenance cost to the Government will not be greater
than the maintenance cost for the
Page H - 5
<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS USCA-95-C-004
equipment or software for which the substitute is proposed;
(5) that all support costs which are borne by the Government will not
be greater than the support costs for which the substitute
equipment or software is proposed.
b. The Government shall, in its sole discretion, determine the technical
acceptability of any equipment proposed as a substitution or
replacement. In the event that a substitute or replacement is proposed
which fails to meet all of the above criteria, the substitution or
replacement will be subject to mutual agreement.
c. Disapproval of a substitution or replacement shall not give rise to or
in any way entitle the Contractor to any extension of time, equitable
adjustment, or suspension of liquidated damages or other credit
provided under this contract.
d. The Government reserves the right to request the Contractor to submit
cost or pricing data pursuant to FAR 15.804 in support of prices for
substitute or replacement equipment or software and related services.
e. The Government will not be liable for proposal preparation cost or any
delay in acting upon any proposal submitted pursuant to this clause.
H.6.2 Technology Upgrade.
a. After contract award the Contractor may propose commercially announced
technology upgrades to the ADP components or other requirements of
this contract.
b. For each item of equipment or software proposed as a technology
upgrade, the Contractor shall provide the following documentation
and/or certification:
(1) A description of the difference between the existing contract
items and the proposed technology upgrade, and the comparative
advantages and disadvantages of each.
(2) Itemized requirements of the contract which shall be changed if
the proposal is adopted, and
Page H - 6
<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS USCA-95-C-004
proposed revision to the contract for each such change.
(3) An estimate of the changes in performance1 if any, that will
result from adoption of the proposal.
(4) A complete item by item unit price for items comprising the
technology upgrade.
(5) A certification that the upgrade equipment or software is a) a
commercial item, b) sold to the general public, c) sold at an
established commercial price, and d) sold in substantial
quantities (Note: the Contractor shall provide the established
commercial price list(s) for the upgrade). When certification can
not be provided, the Government reserves the right to request
cost or pricing data.
(6) An evaluation by the Contractor of the effects the proposed
technology upgrade would have on collateral costs to the
Government, such as Government-furnished property costs, costs of
related items, cost of maintenance and operation, and costs of
software support.
(7) The Government shall, in its sole discretion, determine the
technical acceptability of any equipment proposed as a technology
upgrade. Furthermore, although the technology upgrade is
technically acceptable, the Government reserves the right to
reject the technology upgrade. The Government will not be liable
for proposal preparation cost or any delay in acting upon any
proposal submitted pursuant to this clause.
(8) The Government reserves the right to request the Contractor to
submit cost or pricing data pursuant to FAR 15.804 in support of
prices for technology upgrade equipment or software and related
services.
H.7 PRICE REDUCTION
If at any time after the date of award, the Contractor reduces its
commercial list price for any item or service covered by the contract so that
such list price is less than the Government's contract price for such item or
service, then
Page H - 7
<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS USCA-95-C-004
effective at the time such list price is so reduced, the price charged to the
Government for such item or service will be reduced to an amount not greater
than the then current commercial list price, however, in no event shall the
prices for the particular item or service be in excess of the GSA ADP Schedule
Price or the price charged to the Contractor's most favored commercial customer,
under comparable terms and conditions, whichever is less.
The Contractor shall invoice the ordering office(s) at such reduced prices
indicating on the invoice that the reduction is pursuant to the "Price
Reduction" clause of this contract. The Contractor, in addition, shall, within
ten (10) working days of any such price reduction, notify the Contracting
Officer of such reduction by letter. Failure to do so may result in termination
of the contract, as provided in the "Default" clause in Section I. Upon receipt
of any notice of a price reduction, this contract will be modified accordingly.
Prior to exercising any option years under this contract, the Contractor
will be required to submit a detailed analysis of all contract CLINs indicating
the then current commercial list price and discount structure for each CLIN, as
well as comparing each CLIN to similar items available from other sources. The
Contracting Officer will utilize this information as part of their price
analysis for that option year's price schedule. Exercising any option will be
contingent upon the Contracting Officer making a favorable price reasonableness
determination. The Government reserves the right to renegotiate prices prior to
exercising an option year to ensure contract pricing remains competitive.
To ensure competitive pricing, the Contracting Officer may periodically
(other than prior to exercising the option to extend) request the Contractor to
submit the pricing information cited above in order to demonstrate the contract
line items are competitive with other open market sources. In cases where
contract line item prices are above open market sources, the Government will
solicit price reduction to ensure cost competitiveness.
H.8 INSURANCE
The Contractor shall carry and maintain during the entire period of
performance under this contract adequate insurance as follows:
Page H - 8
<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS USCA-95-C-004
a. Workman's Compensation and Employee's Liability Insurance minimum $100,000
per incident.
b. Automobile General Liability Insurance - minimum $200,000 per person;
$500,000 per accident; property damage $20,000.
c. Comprehensive General Liability Insurance - minimum of $500,000 for bodily
injury per incurrence.
Prior to commencement of work hereunder, evidence of required insurance and
bonds shall be furnished in a form satisfactory to the Contracting Officer. In
addition, the Contractor shall furnish evidence of a commitment by the insurance
carrier to notify the Contracting Officer in writing of any material change,
expiration, or cancellation of any of the insurance policies or bonds required
hereunder not less than thirty (30) days before such change, expiration or
cancellation is effective.
Page H - 9
<PAGE>
SECTION I - CONTRACT CLAUSES USCA-95-C-004
Table of Contents
1.1 52.252-2 CLAUSES INCORPORATED BY REFERENCE. (JUN 1988)............. I - 2
1.2 52.203-9 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT
INTEGRITY-MODIFICATION. (NOV 1990).............................. I - 4
1.3 52.216-18 ORDERING. (APR 1984)..................................... I - 6
1.4 52.216-22 INDEFINITE QUANTITY. (APR 1984).......................... I - 6
1.5 FREEDOM OF INFORMATION ACT CLAUSE (AOUSC 1993)..................... I - 7
1.6 ACCESS TO RECORDS (AOUSC 1991)..................................... I - 7
1.7 DISPUTES (AOUSC 1985).............................................. I - 7
1.8 DEFINITIONS (AOUSC 1985)........................................... I - 8
1.9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 1989 ).............. I - 8
Page I - 1
<PAGE>
SECTION I - CONTRACT CLAUSES USCA-95-C-004
I.1. 52.252-2 CLAUSES INCORPORATED BY REFERENCE. (JUN 1988)
This contract incorporates one or more clauses by reference, with the same
force and effect as if they were given in full text. Upon request, the
Contracting Officer will make their full text available.
52.203-1 OFFICIALS NOT TO BENEFIT APR 1984
52.203-3 GRATUITIES APR 1984
52.203-5 COVENANT AGAINST CONTINGENT FEES APR 1984
52.203-6 RESTRICTIONS ON SUBCONTRACTOR SALES JUL 1985
TO THE GOVERNMENT
52.203-7 ANTI-KICKBACK PROCEDURES OCT 1988
52.203-10 PRICE OR FEE ADJUSTMENT FOR ILLEGAL SEP 1990
OR IMPROPER ACTIVITY
52.203-12 LIMITATION ON PAYMENTS TO INFLUENCE JAN 1990
CERTAIN FEDERAL TRANSACTIONS
52.209-6 PROTECTING THE GOVERNMENT'S NOV 1992
INTEREST WHEN SUBCONTRACTING WITH
CONTRACTORS DEBARRED, SUSPENDED, OR
PROPOSED FOR DEBARMENT
52.215-1 EXAMINATION OF RECORDS BY FEB 1993
COMPTROLLER GENERAL
52.215-2 AUDIT-NEGOTIATION FEB 1993
52.215-22 PRICE REDUCTION FOR DEFECTIVE JAN 1991
COST OR PRICING DATA
52.215-23 PRICE REDUCTION FOR DEFECTIVE DEC 1991
COST OR PRICING DATA - MODIFICATIONS
52.215-24 SUBCONTRACTOR COST OR PRICING DEC 1991
DATA
52.215-25 SUBCONTRACTOR COST OR PRICING DEC 1991
DATA - MODIFICATIONS
52.215-26 INTEGRITY OF UNIT PRICES APR 1991
Page I - 2
<PAGE>
SECTION I - CONTRACT CLAUSES USCA-95-C-004
52.215-33 ORDER OF PRECEDENCE JAN 1986
52.222-20 WALSH-HEALEY PUBLIC CONTRACTS ACT APR 1984
52.222-35 AFFIRMATIVE ACTION FOR SPECIAL APR 1984
DISABLED AND VIETNAM ERA VETERANS
52.222-36 AFFIRMATIVE ACTION FOR HANDICAPPED APR 1984
WORKERS
52.222-37 EMPLOYMENT REPORTS ON SPECIAL JAN 1988
DISABLED VETERANS AND VETERANS OF
THE VIETNAM ERA
52.223-2 CLEAN AIR AND WATER APR 1984
52.223-6 DRUG-FREE WORKPLACE JUL 1990
52.225-3 BUY AMERICAN ACT - SUPPLIES JAN 1994
52.227-1 AUTHORIZATION AND CONSENT APR 1984
52.227-3 PATENT INDEMNITY APR 1984
52.227-19 COMMERCIAL COMPUTER SOFTWARE -
RESTRICTED RIGHTS JUN 1987
52.228-5 INSURANCE - WORK ON A GOVERNMENT SEP 1989
INSTALLATION
52.229-3 FEDERAL, STATE, AND LOCAL TAXES JAN 1991
52.229-5 TAXES - CONTRACTS PERFORMED IN U.S. APR 1984
POSSESSIONS OR PUERTO RICO
52.232-23 ASSIGNMENT OF CLAIMS JAN 1986
52.233-3 PROTEST AFTER AWARD AUG 1989
52.243-1 CHANGES - FIXED-PRICE AUG 1987
52.249-2 TERMINATION FOR CONVENIENCE OF THE APR 1984
GOVERNMENT (FIXED-PRICE).
52.249-8 DEFAULT (FIXED-PRICE SUPPLY AND APR 1984
SERVICE)
Page I - 3
<PAGE>
SECTION I - CONTRACT CLAUSES USCA-95-C-004
I.2 52.203-9 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT INTEGRITY-MODIFICATION.
(NOV 1990)
(a) Definitions. The definitions set forth in FAR 3.104-4 are hereby
incorporated in this clause.
(b) The Contractor agrees that it will execute the certification set forth
in paragraph (c) of this clause when requested by the Contracting
Officer in connection with the execution of any modification of this
contract.
(c) Certification. As required in paragraph (b) of this clause, the
officer or employee responsible for the modification proposal shall
execute the following certification:
CERTIFICATE OF PROCUREMENT INTEGRITY-MODIFICATION (NOV 1990)
(1) I, ___________________________ (Name of certifier) am the officer
or employee responsible for the preparation of this modification
proposal and hereby certify that, to the best of my knowledge and
belief, with the exception of any information described in this
certification, I have no information concerning a violation or
possible violation of subsection 27(a), (b), (d), or (f) of the Office
of Federal Procurement Policy Act, as amended* (41 U.S.C. 423),
(hereinafter referred to as "the Act"), as implemented in the FAR,
occurring during the conduct of this procurement
________________________ (contract and modification number).
(2) As required by subsection 27(e)(l)(B) of the Act, I further
certify that to the best of my knowledge and belief, each officer,
employee, agent, representative, and consultant of
_______________________ (Name of Offeror) who has participated
personally and substantially in the preparation or submission of this
proposal has certified that he or she is familiar with, and will
comply with, the requirements of subsection 27(a) of the Act, as
implemented in the FAR, and will report immediately to me any
information concerning a violation or possible violation of
subsections 27(a), (b), (d), or (f) of the Act, as implemented in the
FAR, pertaining to this procurement.
(3) Violations or possible violations: (Continue on plain bond paper
if necessary and label Certificate of Procurement
Integrity-Modification (Continuation Sheet), ENTER NONE IF NONE
EXISTS)
Page I - 4
<PAGE>
SECTION I - CONTRACT CLAUSES USCA-95-C-004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature of the officer or employee responsible for the modification
proposal and date)
---------------------------------------------------------------------------
(Typed name of the officer or employee responsible for the modification
proposal)
* Subsections 27 (a), (b), and (d) are effective on December 1, 1990.
Subsection 27(f) is effective on June 1, 1991.
THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY
OF THE UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT
CERTIFICATION MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER TITLE 18,
UNITED STATES CODE, SECTION 1001.
(End of certification)
(d) In making the certification in paragraph (2) of the certificate, the
officer or employee of the competing Contractor responsible for the offer
or bid, may rely upon a one-time certification from each individual
required to submit a certification to the competing Contractor,
supplemented by periodic training. These certifications shall be obtained
at the earliest possible date after an individual required to certify
begins employment or association with the contractor. If a contractor
decides to rely on a certification executed prior to the suspension of
section 27 (i.e., prior to December 1, 1989), the Contractor shall ensure
that an individual who has so certified is notified that section 27 has
been reinstated. These certifications shall be maintained by the Contractor
for a period of 6 years from the date a certifying employee's employment
with the company ends or, for an agency, representative, or consultant, 6
years from the date such individual ceases to act on behalf of the
contractor.
Page I - 5
<PAGE>
SECTION I - CONTRACT CLAUSES USCA-95-C-004
(e) The certification required by paragraph (c) of this clause is a
material representation of fact upon which reliance will be placed in
executing this modification.
I.3 52.216-18 ORDERING. (APR 1984)
(a) Any supplies and services to be furnished under this contract shall be
ordered by issuance of delivery orders.
(b) All delivery orders are subject to the terms and conditions of this
contract. In the event of conflict between a delivery order and this
contract, the contract shall control.
(c) If mailed, a delivery order is considered issued when the Government
deposits the order in the mail. Orders may be issued orally or by written
telecommunications only if authorized in the Schedule.
I.4 52.216-22 INDEFINITE QUANTITY. (APR 1984)
(a) This is an indefinite-quantity contract for the supplies or services
specified, and effective for the period stated, in the Schedule. The
quantities of supplies and services specified in the Schedule are estimates
only and are not purchased by this contract.
(b) Delivery or performance shall be made only as authorized by orders
issued in accordance with the Ordering clause. The Contractor shall furnish
to the Government, when and if ordered, the supplies or services specified
in the Schedule.
(c) Except for any limitations on quantities in the Delivery-Order
Limitations clause or in the Schedule, there is no limit on the number of
orders that may be issued. The Government may issue orders requiring
delivery to multiple destinations or performance at multiple locations.
(d) Any order issued during the effective period of this contract and not
completed within that period shall be completed by the Contractor within
the time specified in the order. The contract shall govern the Contractor's
and Government's rights and obligations with respect to that order to the
same extent as if the order were completed during the contract's effective
period; provided, that the Contractor shall not be required to make any
deliveries under this contract later than six months after contract
expiration date.
Page I - 6
<PAGE>
SECTION I - CONTRACT CLAUSES USCA-95-C-004
I.5 FREEDOM OF INFORMATION ACT CLAUSE (AOUSC 1993)
While the Judicial Branch of the Federal Government, including the AOUSC,
is not subject to the provisions of the Freedom of Information Act (FOIA), 5
U.S.C. 552, the AOUSC reserves the right to disclose information relating to
this contract in accordance with provisions of the FOIA and current case law
interpreting those provisions, as though they applied to the Judiciary. The
Contractor shall be notified in advance of any disclosure pursuant to this
clause and afforded a reasonable opportunity to respond. Notwithstanding the
foregoing paragraph, the Contractor agrees that any CLIN unit and aggregate
prices of this contract, including those of any evaluated options, shall be
disclosed by the AOUSC upon the request of any person. Any offer that takes
exception to the terms of this clause may be rejected.
I.6 ACCESS TO RECORDS (AOUSC 1991)
The Contractor agrees that the Director of the Administrative Office of the
U.S. Courts or his/her designated representative shall, until three years after
the expiration of this contract, have access to and the right to examine any
books, documents, papers, and records of the Contractor involving transactions
related to this contract or compliance with any clauses thereunder. The
Contractor further agrees to include in all his subcontracts hereunder a
provision to the effect that the subcontractor agrees that the Director of the
Administrative Office of the U.S. Courts or his/her designated representative
shall, until three years after the expiration under the subcontract, have access
to and the right to examine any books, documents, papers, and records of such
subcontractor, involving transactions related to the subcontract or compliance
with any clauses thereunder.
I.7 DISPUTES (AOUSC 1985)
a. Except as otherwise provided in this contract, any dispute concerning a
question of fact arising under this contract which is not disposed of by
agreement shall be decided by the Contracting Officer who shall reduce his
decision to writing and mail or otherwise furnish a copy thereof to the
Contractor. The decision of the Contracting Officer shall be final and
conclusive unless, within 30 days from the date of receipt of such copy, the
Contractor mails or otherwise furnishes to the Contracting Officer a written
appeal addressed to the Director, Administrative Office of the U. S. Courts. The
decision of the Director or his duly authorized representative for the
determination of such appeals shall be final and conclusive
Page I - 7
<PAGE>
SECTION I - CONTRACT CLAUSES USCA-95-C-004
unless determined by a court of competent jurisdiction to have been fraudulent,
or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad
faith, or not supported by substantial evidence. In connection with any appeal
proceeding under this clause, the Contractor shall be afforded an opportunity to
be heard and to offer evidence in support of its appeal. Pending final decision
of a dispute hereunder, the Contractor shall proceed diligently with the
performance of the contract and in accordance with the Contracting Officer's
decision.
b. This "Disputes" clause does not preclude consideration of law questions
in connection with decisions provided for in paragraph (a) above: Provided, that
nothing in this contract shall be construed as making final the decision of any
administrative official, representative, or board on a question of law.
I.8 DEFINITIONS (AOUSC 1985)
As used in this Agreement, the following terms shall have the meanings set
forth below:
(a) The term "Director" means the Director of the Administrative Office of
the United States Courts (unless in the context of a particular section, the use
of "Director" manifestly shows that the term was intended to refer to some other
officer for purposes of that section), and the term "his duly authorized
representative" means any person or persons or board (other than the Contracting
Officer) authorized in writing to act for the Director.
(b) The term "Contracting Officer" means the person executing this
Agreement on behalf of the Government, and any other successor Contracting
Officer who has responsibility for this Agreement.
(c) The term "subcontracts" includes purchase orders.
I.9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 1989)
This contract is renewable at the prices stated in Section B, at the option
of the Government, by the Contracting Officer giving written notice of renewal
to the Contractor by the first day of the next one year period or within 30 days
after funds for that contract year become available, whichever date is the
later; provided that the Contracting Officer shall have given preliminary notice
of the Government's intention to renew at
Page I - 8
<PAGE>
SECTION I - CONTRACT CLAUSES USCA-95-C-004
least 30 days before this contract is to expire. Such a preliminary notice of
intent to renew shall not be deemed to commit the Government to renewals. If the
Government exercises this option for renewal, the contract as renewed shall be
deemed to include this option provision. However, the total duration of this
contract, including the exercise of any options under this clause, shall not
exceed 4 years from date of contract award (3 years for hardware/software and 4
years for maintenance/support).
Page I - 9
<PAGE>
SECTION J - LIST OF ATTACHMENTS USCA-95-C-004
DOCUMENT TITLE AND DATE PAGE
- -------- -------------- ----
Attachment 1 Applicable Documents . . . . . . . . . . . . . . . J1 - 1
Attachment 2 Terms and Definitions . . . . . . . . . . . . . . J2 - 1
Attachment 3 Possible/Planned Installation
and Warranty Repair Sites . . . . . . . . . . . . J3 - 1
Attachment 4 Installed Base of Hardware
and Software . . . . . . . . . . . . . . . . . . . J4 - 1
Attachment 5 Description of Judiciary's Data
Communications Network (DCN) . . . . . . . . . . . J5 - 1
Page J - 1
<PAGE>
SECTION J, ATTACHMENT 1 USCA-95-C-004
APPLICABLE DOCUMENTS
I. Introduction. The standards, specifications, handbooks, and other documents
listed within this attachment are mandatory for performance under the contract.
The Contractor shall use the versions of these documents specified below, and
shall provide certification for each applicable standard as required under the
contract. The following documents of the exact issue shown form a part of the
contract to the extent specified elsewhere in the contract. In the event of
conflicts between the documents referenced below and the contents of Section C,
Specifications, the contents of Section C shall be considered a superseding
requirement. In the event of conflicts between Government and non-Government
documents, Government documents shall take precedence. Where Government
documents are in draft form, the corresponding non-Government documents will
apply until Government documents become final.
II. Standards Documents.
Government Documents:
A. Federal Information Processing Standards.
FIPS PUB 1-2 Code for Information Interchange, Its Representations,
Subsets, and Extensions,
14 Nov 84
FIPS PUB 86 Additional Controls for Use With ASCII,
29 Jan 81
FIPS PUB 107 Local Area Networks; Baseband Carrier Sense
Multiple Access with Collision Detection
Access Method and Physical Layer Specifications and
Link Layer Protocol, 31 Oct 84
FIPS PUB 120 Graphical Kernel System (GKS), 18 Apr 86
FIPS PUB 127-1 Database Language SQL, 2 Feb 90
FIPS PUB 128 Computer Graphics Metafile (CGM), 16 Mar 87
FIPS PUB 146-1 Government Open Systems Interconnection
Profile (GOSIP), Mar 91
FIPS PUB 151-1 POSIX: Portable Operating System Interface
for Computer Environments, 28 Mar 90
FIPS PUB 152 Simple Graphical Markup Language (SGML),
28 Mar 90
Page J 1- 1
<PAGE>
SECTION J, ATTACHMENT 1 USCA-95-C-004
APPLICABLE DOCUMENTS
FIPS PUB 153 Programmers Hierarchical Interactive Graphics
Standard (PHIGS), 14 Oct 88
FIPS PUB 156 Information Resource Dictionary System (IRDS), 5 Apr 89
FIPS PUB 158 The User Interface Component of the Applications Portability
Profile, 29 May 90
FIPS PUB 161 Electronic Data Interchange (EDI) (Draft; final:
30 Sep 91; see also ANSI X12)
B. National Institute for Standards and Technology (formerly National Bureau of
Standards) Documents.
NBSIR 88-3813 Initial Graphics Exchange Specification (IGES)
NIST Special Pub Applications Portability Profile (May 1991)
500-187
C. Code of Federal Regulations.
29 CFR Part 1910 Untitled (national testing laboratory electronic equipment
certification)
D. Federal Communications Commission Regulations.
FCC Rules Part 15 Subpart J (certification for control of electromagnetic
emissions: Class B)
Non-Government Documents:
E. American National Standards Institute Documents.
ANSI/IEEE 754-85 Standard for Binary Floating Point Arithmetic
ANSI S1.4a-85 Specification for Sound Level Meters
ANSI X3.4-86 7 Bit American National Standard Code for Information
Interchange (ASCII)
ANSI x4.23-82 Keyboard Arrangement of Alpha-Numeric Machines
ANSI x12 Electronic Data Interchange (EDI)
Page J1 - 2
<PAGE>
SECTION J, ATTACHMENT 1 USCA-95-C-004
APPLICABLE DOCUMENTS
F. Electronic Industries Association Standards.
EIA-RS-232-D-87 Interface Between Data Terminal Equipment and Data
Circuit-Terminating Equipment Employing Serial Binary
Data Interchange
G. Institute of Electrical and Electronics Engineers Standards.
IEEE 802.3-85 Standard for Local Area Networks (1985)
IEEE 802.3A-88 Supplement to IEEE 802.3 (1988)
H. International Standards Organization Documents.
ISO/SC 21/WG5 On-Line Transaction Processing (OLTP)
ISO/IS 8613 Information Processing Systems -- Open Systems
Interconnection -- Specification for Office Document
Architecture/Office Document Interchange Format (ODA/ODIF)
ISO 8802-2 Information Processing Systems - Local Area Networks -
Part 2: Logical Link Control, 1989
ISO 8802-3 Information Processing Systems -- Local Area Networks --
Part 3: Carrier Sense Multiple Access with Collision
Detection (CSMA/CD) Access Method and Physical Layer
Specification, 1989
I. National Fire Protection Association.
NFPA 70-87 National Electrical Code
III. Reference Documents.
Government Documents:
A. National Institute for Standards and Technology (formerly National Bureau of
Standards) Documents.
NBS Special Pub Stable Implementation Agreements for Open
500-150 Systems Interconnection Protocols Version 1,
Edition 1 (December 1987)
EPA Energy Star Energy-Efficient Microcomputers: Guidelines Pub.
KAP-93-4-I on Acquisition, Management, and Use
Page J1 - 3
<PAGE>
SECTION J, ATTACHMENT 1 USCA-95-C-004
APPLICABLE DOCUMENTS
Non-Government Documents:
B. X/Open Group Documents.
XPG3 X/Open Portability Guide1 Issue 3 (Dec 1988)
IV. Availability of Documents.
Copies of the applicable documents not included as part of this contract or as
Government Furnished Information (GFI) may be examined at the Government
facility identified below or obtained from the respective sources also listed
below.
A. Government Facility. A selection of the above documents may be examined at
the following location (call first for availability):
Administrative Office of the United States Courts
Attention: Henry Weeks, Contracting Officer
One Columbus Circle, N.E., Suite 3-100
Washington, DC, 20544 Phone: (202) 273-2700
B. Sources and Ordering Information.
1. Federal Information Processing Standards (FIPS).
United States Department of Commerce
National Technical Information Service
5285 Port Royal Road
Springfield, VA 22161
2. National Institute for Standards and Technology (NIST) (formerly National
Bureau of Standards, NBS) Documents.
National Institute for Standards and Technology
US Department of Commerce
Washington, DC 20234
3. Code of Federal Regulations (CFRs).
Superintendent of Documents
US Government Printing Office
Washington, DC 20402
4. American National Standards Institute (ANSI) Documents.
American National Standards Institute
1430 Broadway
New York, NY 10018
Page JI - 4
<PAGE>
SECTION J, ATTACHMENT 1 USCA-95-C-004
APPLICABLE DOCUMENTS
5. Electronic Industries Association (EIA) Standards.
Electronic Industries Association
11 East 42nd St
New York, NY 10036
6. Institute of Electrical and Electronics Engineers (IEEE) Standards.
Institute of Electrical and Electronics Engineers
345 East 47th St
New York, NY 10017
7. International Standards Organization (ISO) Documents.
American National Standards Institute
1430 Broadway
New York, NY 10018
8. MIT X-Windows Publications.
MIT Software Distribution Center
Building E-32-300
77 Massachusetts Avenue
Cambridge, MA 02139
9. National Fire Protection Association (NFPA).
National Fire Protection Association
Batterymarch Park
Quincy, MA 02269
10. X/Open Group (XPG) Documents.
X/Open Company, Limited
1010 El Camino Real
Suite 380
Menlo Park, CA 94025
(Internet: [email protected])
Page J1 - 5
<PAGE>
SECTION J, ATTACHMENT 2 USCA-95-C-004
TERMS AND DEFINITIONS
The following terms are used throughout the solicitation.
AO. Administrative Office of the U.S. Courts.
AOUSC. Administrative Office of the U.S. Courts
BAFO. Best and Final Offer.
CLIN. Contract Line Item Number.
CO. (Government) Contracting Officer.
Contracting Agency. Refer to the "contracting office" as defined in the Federal
Acquisition Regulation (FAR) Subpart 2.1, or its designated representative.
Contractor. An individual, partnership, company, corporation, or association
having a contract with the contracting agency (Government) for the design,
development, maintenance, modification, or supply of configuration items and
services under the terms of a contract. A Government Agency performing any of
the above actions is considered a "contractor" for configuration management
purposes.
COTR. Contracting Officer's Technical Representative.
CPU. Central Processing Unit.
Federal Judiciary. The Judicial Branch of the Federal government made up of the
United States Courts. Judicial powers and judicial work involve the application
and the interpretation of the law.
Federal Judiciary Data Communications Network (DCN). The Federal Judiciary's
Data Communications Network (DCN) (AOUSC Contract No. USCA 19001) provides local
and wide area connectivity for the judiciary including judges' chambers, clerks'
offices, and other court organizations. The DCN provides sufficient connectivity
and bandwidth to enable transfer of information between organizations; access to
existing and future courts' host data processing applications on a variety of
systems; access to legal data base services; and a common electronic mail
service. See Section J, Attachment 6.
FIPS. Federal Information Processing Standard.
FY. Fiscal Year.
Page J2 - 1
<PAGE>
SECTION J, ATTACHMENT 2 USCA-95-C-004
TERMS AND DEFINITIONS
GOSIP-compliant. Computer network protocols which are in compliance with FIPS
PUB 146-1, "Government Open Systems Interconnection Profile".
Government. Federal Government, AO, or the Federal Judiciary.
Government Furnished Equipment (GFE). Equipment furnished by the U.S.
government.
Government Open Systems Interconnection Profile (GOSIP). A Federal Information
Processing Standards Publication which defines a common set of data
communication protocols which enable systems developed by different vendors to
interoperate and enable users of different applications on these systems to
exchange information.
Graphical User Interface. A user interface which uses graphics (icons, buttons,
windows, etc.) to present and receive information.
Integrated Logistics Support. A composite of the elements necessary to assure
the effective and economical support of a system or equipment at all levels of
maintenance for its programmed life-cycle.
Life-cycle. The period of time encompassing the life of an automated system.
Mail-back/Carry-In Warranty. Repair or replacement at a contractor's repair
facility of any malfunctioning unit returned to the repair facility by mail (at
contractor expense) or carried in (by choice of the Government) by government
personnel.
Mean Time to Restore (MTR). Mean time to restore a system to operational status
following component failure; measured from the time the contractor is notified
of component failure (phone call if on-call maintenance employed; receipt of
component if mail-back maintenance employed) until the system is returned to
operational use (demonstrated as being fixed to user's satisfaction if on-call
maintenance employed; receipt of component by user if mail-back maintenance
employed).
Menu. A software facility that displays command/option choices, allows selection
of these choices, and allows execution of that choice through the video display
using, for example, a keyboard key-stroke.
Page J2 - 2
<PAGE>
SECTION J, ATTACHMENT 2 USCA-95-C-004
TERMS AND DEFINITIONS
Microcomputer Delivery Capacity. Physical capacity of offeror (or any
subcontractor proposed to perform a delivery function for this solicitation) to
deliver microcomputer systems to customers. Delivery capacity includes any
production, delivery, integration or shipping limitations as well as any other
factor that limits the offeror's capacity to provide microcomputers to users.
Microcomputer Production Capacity. Physical capacity of offeror or offeror's
subcontractors for this solicitation to produce microcomputer systems.
Microcomputer System. System Unit (i.e. processor, RAM, video board,
controllers, drives, power supply, etc.), Keyboard and Monitor.
Modification. A modification occurs with: routine bug fixes; code changes that
may consist of patches to existing disk files or a single update disk; manual
changes that are minimal--if any; a change that normally results in a minor
version number change, but the model number remains the same.
NetBIOS Interface. An IBM-developed network interface which allows PCs using
MS-DOS 3.1 and above to internetwork with each other.
Newly-Remanufactured Part. Parts supplied through warranty that have been
reworked or rebuilt to meet or exceed OEM specifications and meet the warranty
requirements of new parts provided by this contract.
On-Call Warranty. Repair or replacement at the site (or place designated by the
Government to perform warranty service for sites normally not accessible by
commercial transportation).
Open System. A system which is capable of executing applications software
developed for other open systems by virtue of implementing common international
operating system standards, and capable of communicating with other open systems
by virtue of implementing common international standard protocols.
Open Systems Architecture. An architecture which implements international
standard protocols.
Portable Operating System Interface. An IEEE standard which defines a C language
source interface to an operating system environment.
Page J2 - 3
<PAGE>
SECTION J, ATTACHMENT 2 USCA-95-C-O04
TERMS AND DEFINITIONS
POSIX-Compliant. An operating system which is compliant with FIPS PUB 151-1,
"POSIX: Portable Operating System Interface for Computer Environments".
Release. See version.
Revision. A generic term that encompasses any change in software through a
modification, update, or upgrade.
Site. Where equipment is physically located and used.
System Software. A series of instructions or statements in a form acceptable to
a computer, designed to control the internal operations of the computer to
execute an operation or operations necessary to control computer function at a
systems level. Systems software may be either machine dependent or machine
independent, but is usually dependent on machine architecture. Includes such
programs as assemblers, interpreters, operating systems (OS), programming
languages, utility software, etc.
Technology Refreshment. The replacement of out-of-date technology with new
technology.
Technology Substitution. The substitution of hardware, software, documentation,
and training items with items of equal or better functionality and performance
than that currently available.
Template. A pre-defined outline which serves as a pattern for document
generation.
Update. A software update occurs with: significant enhancements and new
features, to include corrections of known problems to date; code changes that
require all new disks; manual changes, e.g., new chapters, additions to
chapters, indexes, tables, etc.; changes in minor version number.
Upgrade. A software upgrade occurs with: new extensive features/enhancements
that are added so that the software vendor considers the package to be a new
product (features of the original software remain part of the package for
backward compatibility, and corrections for known problems are included);
complete set of new disks; new manual required; changes in major version number
(digits to the left of the decimal point, i.e., X.x) and model number; changes
which may include changes in product name.
Page J2 - 4
<PAGE>
SECTION J, ATTACHMENT 2 USCA-95-C-004
TERMS AND DEFINITIONS
User-Installable Component (UIC). A CLIN that is considered to be a
sub-component and allows the user to perform self-maintenance or to upgrade
system configurations.
Version. The version of a product is the revision level of the product and is
indicated by a version number. There are two types of version changes: major and
minor. A major version change is indicated by a numeric change on the left of
the decimal point (e.g., 2.x to 3.x), and a minor version change is indicated by
a numeric change on the right of the decimal point (e.g., 2.1 to 2.2). A product
update or upgrade will result in a change in the product version number.
Virtual Terminal. Terminals with protocols whose function is to hide the
differences between different kinds of terminals.
Windowing. The capability to support multiple, concurrent, independent sessions.
X-Window. A portable, network-transparent window system originally developed at
MIT.
Page J2 - 5
<PAGE>
SECTION J, ATTACHMENT 3 USCA-95-C-004
POSSIBLE /PLANNED INSTALLATIONS
Alabama (11th Circuit) Louisiana (5th Circuit)
Anniston, Florence Alexandria, Lafayette
Birmingham, Huntsville Baton Rouge, Lake Charles
Decatur, Tuscaloosa New Orleans, Monroe
Montgomery, Mobile Opelousas, Shreveport
Alaska (9th Circuit) Maine (1st Circuit)
Anchorage, Nome Bangor, Portland
Ketchikan, Kodiak
Fairbanks Juneau Maryland (4th Circuit)
Baltimore, Hyattsville
Rockville, Upper Marlboro
Salisbury
Arizona (9th Circuit)
Phoenix, Flagstaff Massachusetts (1st Circuit)
Tucson, Yuma Boston, Springfield
Prescott, Tempe Worcester
Arkansas (8th Circuit) Michigan (6th Circuit)
El Dorado, Pine Bluff Bay City, Ann Harbor
Little Rock, Fayetteville Detroit, Port Huron
Jonesboro, Fort Smith Grand Rapids, Flint
Hot Springs, Harrison Kalamazoo, Lansing
Texarkana Marquette
California (9th Circuit)
Fresno, Santa Barbara Minnesota (8th Circuit)
Los Angeles, San Pedro Minneapolis, Bemidji
Modesto, Lancaster St. Paul, Duluth
Oakland, Barstow Fergus Falls
Sacramento, Arroyo Grande
San Bernardino, Yucca Valley Mississippi (5th Circuit)
San Francisco, Mount Shasta Aberdeen, Oxford
San Jose, South Lake Tahoe Biloxi, Greenville
Santa Ana, Bishop Jackson, Hattiesburg
Santa Rosa, Susanville Gulfport
Redding, Yosemite N. Park
Oakland, Eureka, Pasadena
Pacific Grove, San Diego
El Centro, Woodland Hills
Colorado (10th Circuit) Missouri (8th Circuit)
Denver, Durango Kansas City, Jackson
Monte Vista, Grand Junction St. Louis, St Joseph
Estes Park, Colorado Sprs Cape Girardeau, Springfield
Jefferson City, Joplin
Page J3 - 1
<PAGE>
SECTION J, ATTACHMENT 3 USCA-95-C-004
POSSIBLE/PLANNED INSTALLATIONS
Connecticut (2nd Circuit)
Bridgeport, New Haven
Hartford, Waterbury,
New Britian
Delaware (3rd Circuit)
Wilmington
Montana (9th Circuit)
District of Columbia Butte, Great Falls
Helena, Billings
Florida (11th Circuit) Missoula, Wolf Point
Jacksonville, Ft. Myers
Miami, Pensacola
Orlando, Panama City Nebraska (8th Circuit)
Tallahassee, Ft. Lauderdale Lincoln
Tampa, St Petersburg Omaha
West Palm Beach, Temple Terrace
Lake Worth Gainsville Nevada (9th Circuit)
Key West Key Biscayne Las Vegas
Fort Pierce Reno
Georgia (11th Circuit) New Hampshire (1st Circuit)
Atlanta, Brunswick Concord
Augusta, Valdosta Manchester
Columbus
Macon New Jersey (3rd Circuit)
Savannah Camden
Albany Newark
Rome Trenton
Gainesville Oakhurst
Newnan Atlantic City
Guam
Agana New Mexico (10th Circuit)
Albuquerque, Clovis
Hawaii (9th Circuit) Las Cruces, Gallup
Honolulu, Kailua Santa Fe, Farmington
Kailua-Kona, Kula (Maui) Alamogordo, Roswell
Johnstone Island, APO AP
New York (2nd Circuit)
Albany, Patchogue
Idaho Brooklyn, Binghampton
Boise Buffalo, Syracuse
Moscow New York City, Watertown
Pocatello Poughkeepsie, Rouses Point
Rochester, Bedford
Page J3 - 2
<PAGE>
SECTION J, ATTACHMENT 3 USCA-95-C-004
POSSIBLE/PLANNED INSTALLATIONS
New York (2nd Circuit) (Cont.)
Illinois (7th Circuit) Utica, Douglaston
Chicago, Moline Westbury, Middletown
Danville, Evanston White Plains, White Plains
East St. Louis, Elgin Hauppauge,
Peoria, Benton Uniondale
Rockford, Rock Island
Springfield
North Carolina (4th Circuit)
Charlotte, Wilmington
Indiana (7th Circuit) Greensboro, Greenville
Fort Wayne, Evansville Wilson, New Bern
Gary, New Albany Raleigh, Fayetteville
Indianapolis, Terre Haute Elizabeth City, Durham
South Bend, Hammond Winston-Salem, Asherville
Lafayette Rutherfordton, Morganton
Statesville
North Dakota (8th Circuit)
Fargo, Minot, Grand Forks
Iowa (8th Circuit) Bismark, Mandan
Cedar Rapids, Jefferson
Des Moines, Council Bluffs Ohio (6th Circuit)
Sioux City, Burlington Akron, Portsmouth
Canton, Youngstown
Cincinnati, Medina
Cleveland
Kansas (10th Circuit) Columbus
Kansas City, Leavenworth Dayton
Topeka, Wichita Toledo
Lawrence, Olathe
Kentucky (6th Circuit) Oklahoma (10th Circuit)
Lexington, Paducah Oklahoma City, Muskogee
Louisville, Bowling Green Okmulgee, Enid, McAlester
Covington, Owensboro Tulsa, Lawton, Norman
Ashland, Pikeville
Frankfort, Danville Oregon (9th Circuit)
London Eugene, Bend, Medford
Williamsburg Portland, Pendleton
South Carolina (4th Circuit)
Pennsylvania (3rd Circuit) Columbia, Greenville
Erie, Allentown Florence, Aiken
Harrisburg, Scranton Charleston, Spartanburg
Philadelphia, Williamsport Anderson, Orangeburg
Pittsburgh, Stroudsburg
Page J3-3
<PAGE>
SECTION J, ATTACHMENT 3 USCA-95-C-004
POSSIBLE/PLANNED INSTALLATIONS
Pennsylvania (3rd Circuit)(Cont.)
Reading, Erie South Dakota (8th Circuit)
Wilkes-Barre, Johnstown Pierre, Rapid City
Potsville Sioux Falls, Aberdeen
Puerto Rico (1st Circuit) Tennessee (6th Circuit)
Hato Rey, San Juan Memphis, Jackson
Nashville, Knoxville
Rhode Island (1st Circuit) Greenville, Chattanooga
Providence Cookeville
Texas (5th Circuit) Virginia (4th Circuit)
Austin, McAllen Alexandria, Charlottesville
Beaumont, Galveston Harrisonburg, Abington
Corpus Christi, Victoria Lynchburg, Big Store Gap
Dallas, El Paso Norfolk,
Fort Worth, Waco Richmond
Houston, Midland Roanoke
Lubbock, Del Rio Newport News
San Antonio, Alpine Danville
Tyler, Pecos
Marshall, San Angelo Washington (9th Circuit)
Sherman, Abilene Seattle, Tacoma
Texarkana, Wichita Falls Spokane, Port Angeles
Amarillo, Laredo Yakima, Vancover
Brownsville, Temple Bellingham
West Virginia (4th Circuit)
Charleston, Elkins
Wheeling, Clarksburg
Morgantown, Huntington
Beckley, Bluefield
Lewisburg, Parkersburg
Wisconsin (7th Circuit)
Utah (10th Circuit) Eau Claire, Green Bay
Salt Lake City, Monticello Madison, Chippewa Falls
Orem, Vernal Milwaukee
Cedar City
Vermont (2nd Circuit)
Rutland, N. Bennington Wyoming (10th Circuit)
Burlington, Rutland Cheyenne, Yellowstone N. Park
Brattleboro Lander, Green River
Sheridan, Jackson
Casper
Page J3 - 4
<PAGE>
SECTION J, ATTACHMENT 3 USCA-95-C-004
POSSIBLE/PLANNED INSTALLATIONS
Administrative Office of the U.S. Courts, Washington, DC
Federal Judicial Center, Washington, DC
Northern Mariana Islands Virgin Islands
Siapan St. Thomas, St. Croix
Page J3 - 5
<PAGE>
SECTION J, ATTACHMENT 4 USCA-95-C-004
JUDICIARY'S INSTALLED BASE OF OA HARDWARE AND SOFTWARE
OA Hardware:
The Judiciary has purchased over 28,000 microcomputers from a variety of
local vendors (selected by individual courts) and from a non-mandatory national
contract. The vast majority of installed microprocessors have been based on the
Intel chip set. A partial list includes AST, Compaq, CompuAdd, Dell, Everex,
Gateway, Zeos. A sample of hardware presently installed in the judiciary is
represented below:
CPU: 286/12 - 16Mhz (640K - 1MB RAM)
386/16 - 33Mhz (2MB - 4MB RAM)
486/25 - 33Mhz (4MB - 8MB RAM)
PENTIUM
MONITOR: MONOCHROME AND COLOR VGA
LASER PRINTER: HEWLETT-PACKARD LASERJET
HEWLETT-PACKARD II
HEWLETT-PACKARD III
HEWLETT-PACKARD III D
HEWLETT-PACKARD III SI
HEWLETT-PACKARD III P
HEWLETT-PACKARD IV
HEWLETT-PACKARD IV D
HEWLETT-PACKARD IV SI
HEWLETT-PACKARD IV P
HEWLETT-PACKARD IV L
PANASONIC KX-4450i
HARD DISK DRIVES: IDE drives ranging from 45mb to 360+MB SCSI drives
ranging from 300MB to 3GB
FLOPPY DRIVES: 3.51" (1.44MB), 5.25" (1.2MB) and COMBO
High-Density Drives
Page J4 - 1
<PAGE>
SECTION J, ATTACHMENT 4 USCA-95-C-004
JUDICIARY'S INSTALLED BASE OF OA HARDWARE AND SOFTWARE
OA Software:
The following is a partial list of software products currently used in the
judiciary:
MICROSOFT PRODUCT FAMILY, INCLUDING
MS-DOS AND MS-WINDOWS
WORDPERFECT PRODUCT FAMILY
VP PLANNER
EXCEL
POWERPOINT
LAN WORKPLACE FOR DOS
LOTUS
BORLAND
REFLEX 1 & 11
BACKUP PRO
FOXBASE
QUATTRO PRO
CENTRAL POINT PC TOOLS
dBASE III/III+/IV
PARADOX
MS-VISUAL/BASIC
Page J4 - 2
<PAGE>
SECTION J - ATTACHMENT 5 USCA-95-C-004
DESCRIPTION OF JUDICIARY'S DATA COMMUNICATIONS NETWORK (DCN)
The Federal Judiciary's Data Communications Network (DCN) (USCA 19001)
provides local and wide area connectivity for major areas of the judiciary
including judges' chambers, clerks' offices, and other court organizations. The
DCN provides sufficient connectivity and bandwidth to enable transfer of
information between organizations; provide access to existing and future courts'
host data processing applications on a variety of systems; provide access to
legal data base services; and provide a common electronic mail service.
The DCN consists of the following tiers:
1. The Local Area Network (LAN) is a collection of workstations and
printers connected to a concentrator and to other network addresses
through a common file and print server. The LAN includes the NetWare
operating system running on IBM PS/2 Model 95 File Servers,
interconnected with existing DOS-based workstations via SynOptics
LAN concentrators (using the IEEE 802.3i LAN protocol, also known as
10Base-T).
2. At many locations, the LANs and other computing resources are
locally interconnected in Building LANs (BLANs). The BLAN connects
LANs, existing U.S. Courts' host computers, terminals and printers,
and subnetworks at one site. The BLAN includes tiered SynOptics
concentrators which use the IEEE 802.3i LAN protocol.
The individual LANs and BLANs are established via SynOptics
Communications, Inc. 10Base-T concentrators, which are connected via unshielded
twisted pair cabling (for distances up to 360 feet) or fiber optic cabling (for
distances over 360 feet). These connections provide an IEEE 802.3i LAN
supporting TCP/IP and IPX/SPX in a Hierarchical Star topology. Direct attachment
of a LAN to a BLAN is provided via unshielded twisted pair or fiber optic
connection to either a bridge or router module card in the BLAN concentrator.
Workstations and printers are connected to the LAN using 3Com Etherlink3 network
interface cards, or compatible cards.
Direct connectivity to the BLAN from government-furnished standalone
workstations, ADP hosts, and other equipment supporting an IEEE 802.3i interface
is provided via an Unshielded Twisted Pair (UTP) connection to a Model 28XX
Series 10Base-T Concentrator, then via either UTP or fiber optic cabling
directly to the BLAN backbone (Model 3000) concentrator.
Page J5 - 1
<PAGE>
SECTION J - ATTACHMENT 5 USCA-95-C-004
DESCRIPTION OF JUDICIARY'S DATA COMMUNICATIONS NETWORK (DCN)
The BLANs connect to the FTS 2000-based WAN through Customer Premise
Equipment (CPE) consisting of X.25 gateways, and switched dedicated digital and
analog equipment.
The DCN provides electronic mail (e-mail) services via cc:Mail running on
a NetWare server. The mail gateway consists of a 80386SX processor card and a
3Com IEEE 802.3i Ethernet LAN adapter card that resides on a ChatterBox/NRS. DCN
users located at sites that are served by standalone or portable workstations
have dial-in access to e-mail through the use of pcANYWHERE. A remote version of
the product is required at the user's workstation, and a host version resides on
the Chatterbox/NRS at a mail gateway location. Hayes Ultra 96 modems provide the
linkage between the user and gateway site.
The communications standards for the DCN are listed below:
- IEEE 802.3i in an Ethernet-II MAC layer frame to support LAN and
BLAN communications between UNIX-based platforms.
- TCP/IP supporting Telnet, File Transfer Protocol (FTP), and Simple
Mail Transfer Protocol (SMTP).
- IPX/SPX, Novell's proprietary protocol, supported on an IEEE
802.2/802.3 standard.
- SNMP for Network Management status reporting.
- CCITT X.25 for both direct and backup connections and remote
database access (to computer-assisted legal research databases).
In addition to the DCN 10Base-T environment, the judiciary has a
requirement for thinnet connectivity.
Page J5 - 2
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
Table of Contents
Page
K.1. 52.203-2 CERTIFICATE OF INDEPENDENT PRICE
DETERMINATION. (APR 1985) .............................. K - 2
K.2. 52.203-4 CONTINGENT FEE REPRESENTATION AND
AGREEMENT. (APR 1984) .................................. K - 3
K.3. 52.203-8 REQUIREMENT FOR CERTIFICATE OF
PROCUREMENT INTEGRITY. (NOV 1990) ...................... K - 4
K.4. 52.203-11 CERTIFICATION AND DISCLOSURE REGARDING
PAYMENTS TO INFLUENCE CERTAIN FEDERAL
TRANSACTIONS. (APR 1991) ............................... K - 6
K.5. 52.204-3 TAXPAYER IDENTIFICATION. (SEP 1992) ................. K - 7
K.6. 52.209-5 CERTIFICATION REGARDING DEBARMENT,
SUSPENSION, PROPOSED DEBARMENT, AND OTHER
RESPONSIBILITY MATTERS. (MAY 1989) ..................... K - 9
K.7. 52.215-6 TYPE OF BUSINESS ORGANIZATION.
(JUL 1987) .............................................. K - 11
K.8. 52.215-11 AUTHORIZED NEGOTIATORS. (APR 1984) ................. K - 11
K.9. 52.215-20 PLACE OF PERFORMANCE. (APR 1984) ................... K - 11
K.10. 52.219-1 SMALL BUSINESS CONCERN REPRESENTATION
(FEB 1990) .............................................. K - 12
K.11. 52.222-19 WALSH-HEALEY PUBLIC CONTRACTS ACT
REPRESENTATION. (APR 1984) ............................. K - 13
K.12. 52.219-22 SIC CODE AND SMALL BUSINESS SIZE STANDARD
(JAN 1991) .............................................. K - 13
K.13. 52.222-21 CERTIFICATION OF NONSEGREGATED
FACILITIES (APR 1984) ................................... K - 13
K.14. 52.223-1 CLEAN AIR AND WATER CERTIFICATION.
(APR 1984) .............................................. K - 14
K.15. 52.223-5 CERTIFICATION REGARDING A DRUG-FREE
WORKPLACE. (JUL 1990) .................................. K - 15
K.16. 52.225-1 BUY AMERICAN CERTIFICATE. (DEC 1989) ................ K - 17
Amendment 1, October 12, 1994 Page K - 1
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
K.1. 52.203-2 CERTIFICATE OF INDEPENDENT PRICE DETERMINATION.
(APR 1985)
(a) The offeror certifies that -
(1) The prices in this offer have been arrived at independently,
without, for the purpose of restricting competition, any consultation,
communication, or agreement with any other offeror or competitor relating
to (i) those prices, (ii) the intention to submit an offer, or (iii) the
methods or factors used to calculate the prices offered;
(2) The prices in this offer have not been and will not be knowingly
disclosed by the offeror, directly or indirectly, to any other offeror or
competitor before bid opening (in the case of a sealed bid solicitation)
or contract award (in the case of a negotiated solicitation) unless
otherwise required by law; and
(3) No attempt has been made or will be made by the offeror to
induce any other concern to submit or not to submit an offer for the
purpose of restricting competition.
(b) Each signature on the offer is considered to be a certification by the
signatory that the signatory -
(1) Is the person in the offeror's organization responsible for
determining the prices being offered in this bid or proposal, and that the
signatory has not participated and will not participate in any action
contrary to subparagraphs (a)(1) through (a)(3) above; or
(2) (i) Has been authorized, in writing, to act as agent for the
following principals in certifying that those principals have not
participated, and will not participate in any action contrary to
subparagraphs (a)(1) through (a)(3) above
Thomas P. Dunn, President
- --------------------------------------------------------------------------------
(insert full name of person(s) in the offeror's organization responsible for
determining the prices offered in this bid or proposal, and the title of his or
her position in the offeror's organization);
(ii) As an authorized agent, does certify that the principals named
in subdivision (b)(2)(i) above have not participated, and will not
participate, in any
Page K - 2
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
action contrary to subparagraphs (a)(1) through (a)(3) above; and
(iii) As an agent, has not personally participated, and will not
participate, in any action contrary to subparagraphs (a)(1) through (a)(3)
above.
(c) If the offeror deletes or modifies subparagraph (a)(2) above, the
offeror must furnish with its offer a signed statement setting forth in detail
the circumstances of the disclosure.
K.2. 52.2O3-4 CONTINGENT FEE REPRESENTATION AND AGREEMENT. (APR 1984)
(a) Representation. The offeror represents that, except for full-time bona
fide employees working solely for the offeror, the offeror -
(Note: The offeror must check the appropriate boxes. For interpretation of
the representation, including the term bona fide employee, see subpart 3.4
of the Federal Acquisition Regulation.)
(1) ____ has, X has not employed or retained any person or company
to solicit or obtain this contract; and
(2) ____ has, X has not paid or agreed to pay to any person or
company employed or retained to solicit or obtain this contract any
commission, percentage, brokerage, or other fee contingent upon or
resulting from the award of this contract.
(b) Agreement. The offeror agrees to provide information relating to the
above Representation as requested by the Contracting Officer and, when
subparagraph (a)(1) or (a)(2) is answered affirmatively, to promptly submit to
the Contracting Officer -
(1) A completed Standard Form 119, Statement of Contingent or Other
Fees, (SF 119); or
(2) A signed statement indicating that the SF 119 was previously
submitted to the same contracting office, including the date and
applicable solicitation or contract number, and representing that the
prior SF 119 applies to this offer or quotation.
Page K - 3
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
K.3. 52.203-8 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT
INTEGRITY. (NOV 1990)
(a) Definitions. The definitions at FAR 3.104-4 are hereby incorporated in
this provision.
(b) Certifications. As required in paragraph (c) of this provision, the
officer or employee responsible for this offer shall execute the following
certification:
CERTIFICATE OF PROCUREMENT INTEGRITY
(1) I, Thomas P. Dunn (Name of certifier), am the officer or
employee responsible for the preparation of this offer and hereby certify
that, to the best of my knowledge and belief, with the exception of any
information described in this certificate, I have no information
concerning a violation or possible violation of subsection 27(a), (b),
(d), or (f) of the Office of Federal Procurement Policy Act, as amended*
(41 U.S.C. 423), (hereinafter referred to as "the Act"), as implemented in
the FAR, occurring during the conduct of this procurement USCA-94R-004
(solicitation number).
(2) As required by subsection 27(e)(1)(B) of the Act, I further
certify that, to the best of my knowledge and belief, each officer,
employee, agent, representative, and consultant of Dunn Computer
Corporation (Name of Offeror) who has participated personally and
substantially in the preparation or submission of this offer has certified
that he or she is familiar with, and will comply with, the requirements of
subsection 27(a) of the Act, as implemented in the FAR, and will report
immediately to me any information concerning a violation or possible
violation of subsections 27 (a), (b), (d), or (f) of the Act, as
implemented in the FAR, pertaining to this procurement.
(3) Violations or possible violations: (Continue on plain bond paper
if necessary and label Certificate of Procurement Integrity (Continuation
Sheet), ENTER NONE IF NONE EXIST)
None.
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Page K - 4
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
(4) I agree that, if awarded a contract under this solicitation, the
certifications required by subsection 27(e)(1)(B) of the Act shall be
maintained in accordance with paragraph (f) of this provision.
[Signature of the officer or employee responsible for the offer and
date]
/s/ Thomas P. Dunn 11/21/94
-------------------------------------------------------------------
[Typed name of the officer or employee responsible for the offer)
Thomas P. Dunn
-------------------------------------------------------------------
* Subsections 27 (a), (b), and (d) are effective on December 1,
1990. Subsection 27(f) is effective on June 1, 1991.
THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY
OF THE UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT
CERTIFICATION MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER TITLE 18,
UNITED STATES CODE, SECTION 1001.
(End of certification)
(c) (1) For procurements using sealed bidding procedures, the signed
certifications shall be submitted by each bidder with the bid submission except
for procurements using two-step sealed bidding procedure (see Subpart 14.5). For
those procurements, the certifications shall be submitted with submission of the
step two sealed bids. A certificate is not required for indefinite delivery
contracts (see Subpart 16.5) unless the total estimated value of all orders
eventually to be placed under the contract is expected to exceed $100,000.
(2) For contracts and contract modifications which include options,
a certificate is required when the aggregate value of the contract or
contract modification and all options (see 3.104-4(e)) exceeds $100,000.
(3) Failure of a bidder to submit the signed certificate with its
bid shall render the bid nonresponsive.
(d) Pursuant to FAR 3.104-9(d), the Offeror may be requested to execute
additional certifications at the request of
Page K - 5
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
the Government. Failure of an Offeror to submit the additional certifications
shall cause its offer to be rejected.
(e) A certification containing a disclosure of a violation or possible
violation will not necessarily result in the withholding of award under this
solicitation. However, the Government, after evaluation of the disclosure, may
cancel this procurement or take any other appropriate actions in the interests
of the Government, such as disqualification of the Offeror.
(f) In making the certification in paragraph (2) of the certificate, the
officer or employee of the competing contractor responsible for the offer may
rely upon a one-time certification from each individual required to submit a
certification to the competing contractor, supplemented by periodic training.
These certifications shall be obtained at the earliest possible date after an
individual required to certify begins employment or association with the
contractor. If a contractor decides to rely on a certification executed prior to
the suspension of section 27 (i.e., prior to December 1, 1989), the Contractor
shall ensure that an individual who has so certified is notified that section 27
has been reinstated. These certifications shall be maintained by the Contractor
for 6 years from the date a certifying employee's employment with the company
ends or, for an agent, representative, or consultant, 6 years from the date such
individual ceases to act on behalf of the Contractor.
(g) Certifications under paragraphs (b) and (d) of this provision are
material representations of fact upon which reliance will be placed in awarding
a contract.
K.4. 52.203-11 CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO INFLUENCE
CERTAIN FEDERAL TRANSACTIONS. (APR 1991)
(a) The definitions and prohibitions contained in the clause, at FAR
52.203-12, Limitation on Payments to Influence Certain Federal Transactions,
included in this solicitation, are hereby incorporated by reference in paragraph
(b) of this certification.
(b) The offeror, by signing its offer, hereby certifies to the best of his
or her knowledge and belief that on or after December 23, 1989--
(1) No Federal appropriated funds have been paid or will be paid to
any person for influencing or attempting to
Page K - 6
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress on
his or her behalf in connection with the awarding of any Federal contract,
the making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment or modification of any Federal contract,
grant, loan, or cooperative agreement;
(2) If any funds other than Federal appropriated funds (including
profit or fee received under a covered Federal transaction) have been
paid, or will be paid, to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress on
his or her behalf in connection with this solicitation, the offeror shall
complete and submit, with its offer, OMB standard form LLL, Disclosure of
Lobbying Activities, to the Contracting Officer; and
(3) He or she will include the language of this certification in all
subcontract awards at any tier and require that all recipients of
subcontract awards in excess of $100,000 shall certify and disclose
accordingly.
(c) Submission of this certification and disclosure is a prerequisite for
making or entering into this contract imposed by section 1352, title 31, United
States Code. Any person who makes an expenditure prohibited under this provision
or who fails to file or amend the disclosure form to be filed or amended by this
provision, shall be subject to a civil penalty of not less than $10,000, and not
more than $100,000, for each such failure.
K.5. 52.204-3 TAXPAYER IDENTIFICATION. (SEP 1992)
(a) Definitions.
"Common parent," as used in this solicitation provision, means that
corporate entity that owns or controls an affiliated group of corporations
that files its Federal income tax returns on a consolidated basis, and of
which the offeror is a member.
"Corporate status," as used in this solicitation provision, means a
designation as to whether the offeror is a corporate entity, an
unincorporated entity (e.g., sole proprietorship
Page K - 7
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
or partnership), or a corporation providing medical and health care
services.
"Taxpayer Identification Number (TIN)," as used in this solicitation
provision, means the number required by the IRS to be used by the offeror
in reporting income tax and other returns.
(b) All offerors are required to submit the information required in
paragraphs (c) through (e) of this solicitation provision in order to comply
with reporting requirements of 26 U.S.C. 6041, 6041A, and 6050M and implementing
regulations issued by the Internal Revenue Service (IRS). If the resulting
contract is subject to reporting requirements described in FAR 4.903, the
failure or refusal by the offeror to furnish the information may result in a 31
percent reduction of payments otherwise due under the contract.
(c) Taxpayer Identification Number (TIN).
|X| TIN: 54-1424-654
|_| TIN has been applied for.
|_| TIN is not required because:
|_| Offeror is a nonresident alien, foreign corporation, or foreign
partnership that does not have income effectively connected with the
conduct of a trade or business in the U.S. and does not have an
office or place of business or a fiscal paying agent in the U.S.;
|_| Offeror is an agency or instrumentality of a foreign government;
|_| Offeror is an agency or instrumentality of a Federal, state or
local government;
|_| Other. State basis. ________________________
(d) Corporate Status.
|_| Corporation providing medical and health care services, or
engaged in the billing and collecting of payments for such services;
Page K - 8
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
|X| Other corporate entity;
|_| Not a corporate entity;
|_| Sole proprietorship
|_| Partnership
|_| Hospital or extended care facility described in 26 CFR 501(c)
(3) that is exempt from taxation under 26 CFR 501(a).
(e) Common Parent.
|X| Offeror is not owned or controlled by a common parent as defined
in paragraph (a) of this clause.
|_| Name and TIN of common parent:
Name ______________________________
TIN ____________________________
K.6. 52.209-5 CERTIFICATION REGARDING DEBARMENT, SUSPENSION, PROPOSED
DEBARMENT, AND OTHER RESPONSIBILITY MATTERS. (MAY 1989)
(a) (1) The Offeror certifies, to the best of its knowledge and belief,
that -
(i) The Offeror and/or any of its Principals -
(A) Are ___ are not X presently debarred, suspended, proposed
for debarment, or declared ineligible for the award of
contracts by any Federal agency;
(B) Have ___ have not X, within a 3-year period preceding this
offer, been convicted of or had a civil judgment rendered
against them for: commission of fraud or a criminal offense in
connection with obtaining, attempting to obtain, or performing
a public (Federal, state, or local) contract or subcontract;
violation of Federal or state antitrust statutes relating to
the submission of offers; or commission of embezzlement,
theft, forgery, bribery,
Page K - 9
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
falsification or destruction of records, making false
statements, or receiving stolen property; and
(C) Are ___ are not X presently indicted for, or otherwise
criminally or civilly charged by a governmental entity with,
commission of any of the offenses enumerated in subdivision
(a)(1)(i)(B) of this provision.
(ii) The Offeror has ___ has not X , within a 3-year period
preceding this offer, had one or more contracts terminated for
default by any Federal agency.
(2) "Principals," for the purposes of this certification, means
officers; directors; owners; partners; and, persons having primary
management or supervisory responsibilities within a business entity (e.g.,
general manager; plant manager; head of a subsidiary, division, or
business segment, and similar positions).
This certification concerns a matter within the jurisdiction of an
agency of the United States and the making of a false, fictitious, or
fraudulent certification may render the maker subject to prosecution under
section 1001, title 18, United States Code.
(b) The Offeror shall provide immediate written notice to the Contracting
Officer if, at any time prior to contract award, the Offeror learns that its
certification was erroneous when submitted or has become erroneous by reason of
changed circumstances.
(c) A certification that any of the items in paragraph (a) of this
provision exists will not necessarily result in withholding of an award under
this solicitation. However, the certification will be considered in connection
with a determination of the Offeror's responsibility. Failure of the Offeror to
furnish a certification or provide such additional information as requested by
the Contracting Officer may render the Offeror nonresponsible.
(d) Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render, in good faith, the
certification required by paragraph (a) of this provision. The knowledge and
information of an Offeror is
Page K - 10
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
not required to exceed that which is normally possessed by a prudent person in
the ordinary course of business dealings.
(e) The certification in paragraph (a) of this provision is a material
representation of fact upon which reliance was placed when making award. If it
is later determined that the Offeror knowingly rendered an erroneous
certification, in addition to other remedies available to the Government, the
Contracting Officer may terminate the contract resulting from this solicitation
for default.
K.7. 52.215-6 TYPE OF BUSINESS ORGANIZATION. (JUL 1987)
The offeror or quoter, by checking the applicable box, represents that -
(a) It operates as X a corporation incorporated under the laws of
the State of Virginia, __ an individual, __ a partnership, __ a nonprofit
organization, or __ a joint venture; or
(b) If the offeror or quoter is a foreign entity, it operates as ___
an individual, ___ a partnership, a nonprofit organization, ___ a joint
venture, or ___ a corporation, registered for business in
___________________ (country).
K.8. 52.215-11 AUTHORIZED NEGOTIATORS. (APR 1984)
The offeror or quoter represents that the following persons are authorized
to negotiate on its behalf with the Government in connection with this request
for proposals or quotations:
Thomas P. Dunn, President, Claudia Ottenstein, Vice President
---------------------------------------------------------------------------
John Vazzana, Vice President - all at (703) 450-0400
---------------------------------------------------------------------------
(list names, titles, and telephone numbers of the authorized negotiators)
K.9. 52.215-20 PLACE OF PERFORMANCE. (APR 1984)
(a) The offeror or quoter, in the performance of any contract resulting
from this solicitation, x intends, ___ does not intend (check applicable block)
to use one or more plants or facilities located at a different address from the
address of the offeror or quoter as indicated in this proposal or quotation.
Page K - 11
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
(b) If the offeror or quoter checks intends in paragraph (a) above, it
shall insert in the spaces provided below the required information:
Place of Performance Name and address of
Owner (Street Address, City, and Operator of the
Plant or County, State, Zip Code) Facility if Other than
Offeror or Quoter
IBM Corporation IBM Corporation
1001 WT Harris Blvd. W. 1001 WT Harris Blvd. W.
Mecklenburg County Mecklenburg County
Charlotte, NC 28262 Charlotte, NC 28262
K.10. 52.219-1 SMALL BUSINESS CONCERN REPRESENTATION. (FEB 1990)
(a) Representation. The offeror represents and certifies as part of its
offer that it [X] is, [_] is not a small business concern and that [_] all, [X]
not all end items to be furnished will be manufactured or produced by a small
business concern in the United States, its territories or possessions, Puerto
Rico, or the Trust Territory of the Pacific Islands.
(b) Definition. "Small business concern," as used in this provision, means
a concern, including its affiliates, that is independently owned and operated,
not dominant in the field of operation in which it is bidding on Government
contracts, and qualified as a small business under the criteria and size
standards in this solicitation.
(c) Notice. Under 15 U.S.C. 645(d), any person who misrepresents a firm's
status as a small business concern in paragraph (A) of this clause in order to
obtain a contract to be awarded under the preference programs established
pursuant to sections 8(a), 8(d),. 9, or 15 of the Small Business Act or any
other provision of Federal law that specifically references section 8(d) for a
definition of program eligibility, shall (1) be punished by imposition of a
fine, imprisonment, or both; (2) be subject to administrative remedies; and (3)
be ineligible for participation in programs conducted under the authority of the
Act.
Amendment 1, October 12, 1994 Page K - 12
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
K.11. 52.222-19 WALSH-HEALEY PUBLIC CONTRACTS ACT REPRESENTATION. (APR 1984)
The offeror represents as a part of this offer that the offeror is ___ or
is not ___ a regular dealer in, or is ____ or is not ___ a manufacturer of, the
supplies offered.
K.12. 52.219-22 SIC CODE AND SMALL BUSINESS SIZE STANDARD. (JAN 1991)
(a) The standard industrial classification (SIC) code for this acquisition
is 3571 for the computer equipment processors and 3577 for the peripherals.
(b) 1. The small business size standard is 1,000 employees.
2. The small business size standard for a concern which submits
an offer in its own name, other that on a construction or
service contract, but which proposes to furnish a product
which it did not itself manufacture, is 1,000 employees.
K.13. 52.222-21 CERTIFICATION OF NONSEGREGATED FACILITIES (APR 1984)
(a) "Segregated facilities," as used in this provision, means any waiting
rooms, work areas, rest rooms and wash rooms, restaurants and other eating
areas, time clocks, locker rooms and other storage or dressing areas,
parking lots, drinking fountains, recreation or entertainment areas,
transportation, and housing facilities provided for employees, that are
segregated by explicit directive or are in fact segregated on the basis of
race, color, religion, or national origin because of habit, local custom,
or otherwise.
(b) By the submission of this office, the offeror certifies that it does
not and will not maintain or provide for its employees any segregated
facilities at any of its establishments, and that it does not have and
will not permit its employees to perform their services at any location
under its control where segregated facilities are maintained. The offeror
agrees that a breach of this certification is a violation of the Equal
Opportunity clause in this contract.
Amendment 1, October 12, 1994 Page K - 13
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
(c) The offeror further agrees that (except where it has obtained
identical certifications from proposed subcontractors for specific time
periods) it will -
(1) Obtain identical certifications from proposed subcontractors
before the award of subcontracts under which the subcontractor will
be subject to the Equal Opportunity clause;
(2) Retain the certifications in the files; and
(3) Forward the following notice to the proposed subcontractors
(except if the proposed subcontractors have submitted identical
certifications for specific time periods):
NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT FOR CERTIFICATIONS OF
NONSEGREGATED FACILITIES.
A Certification of Nonsegregated Facilities must be submitted before the
award of a subcontract under which the subcontractor will be subject to
the Equal Opportunity clause. The certification may be submitted either
for each subcontract of for all subcontracts during a period (i.e.,
quarterly, semiannually, or annually).
NOTE: The Penalty for making false statements in offers is prescribed in
18 U.S.C. 1001.
(End of Provision)
K.14. 52.223-1 CLEAN AIR AND WATER CERTIFICATION. (APR 1984)
The Offeror certifies that -
(a) Any facility to be used in the performance of this proposed contract
is ___ , is not X listed on the Environmental Protection Agency (EPA) List
of Violating Facilities;
(b) The Offeror will immediately notify the Contracting Officer, before
award, of the receipt of any communication from the Administrator, or a
designee, of the EPA, indicating that any facility that the Offeror
proposes to use for the performance of the contract is under consideration
to be listed on the EPA List of Violating Facilities; and
Amendment 1, October 12, 1994 Page K - 14
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
(c) The Offeror will include a certification substantially the same as
this certification, including this paragraph (c), in every nonexempt
subcontract.
K.15. 52.223-5 CERTIFICATION REGARDING A DRUG-FREE WORKPLACE. (JUL 1990)
(a) Definitions. As used in this provision,
"Controlled substance" means a controlled substance in schedules I through
V of section 202 of the Controlled Substances Act (21 U.S.C. 812) and as
further defined in regulation at 21 CFR 1308.11-1308.15.
"Conviction" means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal or
State criminal drug statutes.
"Criminal drug statute" means a Federal or non-Federal criminal statute
involving the manufacture, distribution, dispensing, possession or use of
any controlled substance.
"Drug-free workplace" means the site(s) for the performance of work done
by the Contractor in connection with a specific contract at which
employees of the Contractor are prohibited from engaging in the unlawful
manufacture, distribution, dispensing, possession, or use of a controlled
substance.
"Employee" means an employee of a Contractor directly engaged in the
performance of work under a Government contract. Directly engaged is
defined to include all direct cost employees and any other Contractor
employee who has other than a minimal impact or involvement in contract
performance.
"Individual" means an offeror/contractor that has no more than one
employee including the offeror/contractor.
(b) By submission of its offer, the offeror, if other than an individual,
who is making an offer that equals or exceeds $25,000, certifies and agrees,
that with respect to all employees of the offeror to be employed under a
contract resulting from this solicitation, it will - no later than 30 calendar
days after contract award (unless a longer period is agreed to in writing), for
contracts of 30 calendar days or more performance duration;
Amendment 1, October 12, 1994 Page K - 15
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
or as soon as possible for contracts of less than 30 calendar days performance
duration, but in any case, by a date prior to when performance is expected to be
completed -
(1) Publish a statement notifying such employees that the unlawful
manufacture, distribution, dispensing, possession or use of a controlled
substance is prohibited in the Contractor's workplace and specifying the
actions that will be taken against employees for violations of such
prohibition;
(2) Establish an ongoing drug-free awareness program to inform such
employees about -
(i) The dangers of drug abuse in the workplace;
(ii) The Contractor's policy of maintaining a drug-free workplace;
(iii) Any available drug counseling, rehabilitation, and employee
assistance programs; and
(iv) The penalties that may be imposed upon employees for drug abuse
violations occurring in the workplace;
(3) Provide all employees engaged in performance of the contract with a
copy of the statement required by subparagraph (b)(1) of this provision;
(4) Notify such employees in writing in the statement required by
subparagraph (b)(l) of this provision that, as a condition of continued
employment on the contract resulting from this solicitation, the employee
will -
(i) Abide by the terms of the statement; and
(ii) Notify the employer in writing of the employee's conviction
under a criminal drug statute for a violation occurring in the
workplace no later than 5 calendar days after such conviction;
(5) Notify the Contracting Officer in writing within 10 calendar days
after receiving notice under subdivision (b)(4)(ii) of this provision,
from an employee or otherwise receiving actual notice of such conviction.
The notice shall include the position title of the employee; and
Amendment 1, October 12, 1994 Page K - 16
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
(6) Within 30 calendar days after receiving notice under subdivision
(b)(4)(ii) of this provision of a conviction, take one of the following
actions with respect to any employee who is convicted of a drug abuse
violation occurring in the workplace:
(i) Take appropriate personnel action against such employee, up to
and including termination; or
(ii) Require such employee to satisfactorily participate in a drug
abuse assistance or rehabilitation program approved for such
purposes by a Federal, State, or local health, law enforcement, or
other appropriate agency.
(7) Make a good faith effort to maintain a drug-free workplace through
implementation of subparagraphs (b)(1) through (b)(6) of this provision.
(c) By submission of its offer, the offeror, if an individual who is
making an offer of any dollar value, certifies and agrees that the offeror will
not engage in the unlawful manufacture, distribution, dispensing, possession, or
use of a controlled substance in the performance of the contract resulting from
this solicitation.
(d) Failure of the offeror to provide the certification required by
paragraph (b) or (C) of this provision, renders the offeror unqualified and
ineligible for award. (See FAR 9.104-1(g) and 19.602-1(a)(2)(i).)
(e) In addition to other remedies available to the Government, the
certification in paragraphs (b) or (c) of this provision concerns a matter
within the jurisdiction of an agency of the United States and the making of a
false, fictitious, or fraudulent certification may render the maker subject to
prosecution under title 18, United States Code, section 1001.
K.16. 52.225-1 BUY AMERICAN CERTIFICATE. (DEC 1989)
The offeror certifies that each end product, except those listed below, is
a domestic end product (as defined in the clause entitled Buy American Act -
Supplies), and that components of unknown origin are considered to have been
mined, produced, or manufactured outside the United States.
Amendment 1, October 12, 1994 Page K - 17
<PAGE>
SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS
OF OFFERORS OR QUOTERS USCA-94-R-004
Excluded End Products Country of Origin
Desktop Chassis Taiwan
Tower Chassis Taiwan
3.5" Diskette Drive Malaysia
5.25" Diskette Drive Malaysia
(List as necessary)
Offerors may obtain from the contracting officer lists of articles,
materials, and supplies excepted from the Buy American Act.
Contd. Excluded End Products Country of Origin
Serial Mouse Malaysia
CD-ROM Drive - int. & ext. Japan
Amendment 1, October 12, 1994 Page K - 18
<PAGE>
Exhibit 10.7
DUPLICATE ORIGINAL
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
AWARD/CONTRACT 1. THIS CONTRACT IS A RATED ORDER RATING PAGE OF PAGES
UNDER DPAS (15 CFR 350) 1 136
- ------------------------------------------------------------------------------------------------------------------------------------
2. CONTRACT (Prod. Inst. Ident.) NO. 3. EFFECTIVE DATE 4. REQUISITION/PURCHASE REQUEST/PROJECT NO.
500-94-C-0053 See Block 20c 558-94-77000
- ------------------------------------------------------------------------------------------------------------------------------------
5. ISSUED BY CODE OAG 6. ADMINISTERED BY (if other than item 5) CODE OAG
------------- ---------
HEALTH CARE FINANCING ADMIN HEALTH CARE FINANCING ADMINISTRA
OFFICE OF ACQUISITION & GRANTS RM 389 EAST HIGH RISE BLDG, OAG
6325 SECURITY BOULEVARD/ROOM 389 6325 SECURITY BLVD
BALTIMORE, MARYLAND 21207 BALTIMORE, MD 21207-5187
- ------------------------------------------------------------------------------------------------------------------------------------
7. NAME AND ADDRESS OF CONTRACTOR (No., street, city 8. DELIVERY
country, State and ZIP Code
[ ]FOB ORIGIN [X]OTHER (See below)
DUNN COMPUTER CORPORATION ----------------------------------------------------
22455 DAVIS DRIVE 9. DISCOUNT FOR PROMPT PAYMENT
SUITE 208
Sterling, VA 20166 Net 30
----------------------------------------------------
10. SUBMIT INVOICES ITEM
(4 copies unless
otherwise specified
- --------------------------------------------------------------------------------TO THE ADDRESS
CODE FACILITY CODE SHOWN IN: 12
- ------------------------------------------------------------------------------------------------------------------------------------
11. SHIP TO/MARK FOR CODE BDMS/OIT 12. PAYMENT WILL BE MADE BY CODE ACCT
-------------------- -----------------------
HCFA/BDMS/OIT See Schedule
RM 108 SOP BUILDING
6325 SECURITY BOULEVARD
BALTIMORE, MD 21207
- ------------------------------------------------------------------------------------------------------------------------------------
13. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION: 14. ACCOUNTING AND APPROPRIATION DATA
[ ]10 USC 2304(c)( ) [ ]41 USC 253(c)( ) 45995599 2562 7540511 TIN: 54-11424654
- ------------------------------------------------------------------------------------------------------------------------------------
15A. ITEM NO. 15B. SUPPLIES/SERVICES 15C. QTY 15D. UNIT 15E. UNIT PRICE 15F. AMOUNT
- ------------------------------------------------------------------------------------------------------------------------------------
THIS IS AN INDEFINITE QUANTITY/INDEFINITE DELIVERY CONTRACT FOR STATE-
OF-THE-ART MICROCOMPUTER WORKSTATIONS, PERIPHERALS, SOFTWARE,
MAINTENANCE AND SUPPORT SERVICES.
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
15G. TOTAL AMOUNT OF CONTRACT $ -0-
- ------------------------------------------------------------------------------------------------------------------------------------
16. TABLE OF CONTENTS
- ------------------------------------------------------------------------------------------------------------------------------------
(X) SEC. DESCRIPTION PAGE(S) (X) SEC. DESCRIPTION PAGE(S)
- ------------------------------------------------------------------------------------------------------------------------------------
PART I - THE SCHEDULE PART II - CONTRACT CLAUSES
- ------------------------------------------------------------------------------------------------------------------------------------
X A SOLICITATION/CONTRACT FORM 2 X I CONTRACT CLAUSES 7
- ------------------------------------------------------------------------------------------------------------------------------------
X B SUPPLIES OR SERVICES AND PART III - LIST OF DOCUMENTS,
PRICES/COSTS 11 EXHIBITS AND OTHER ATTACH.
- ------------------------------------------------------------------------------------------------------------------------------------
X C DESCRIPTION/SPECS./WORK J LIST OF ATTACHMENTS
STATEMENT 65
- ------------------------------------------------------------------------------------------------------------------------------------
X D PACKAGING AND MARKING 3 PART IV - REPRESENTATIONS AND
INSTRUCTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
X E INSPECTION AND ACCEPTANCE 5 K REPRESENTATIONS, CERTIFICATIONS
AND OTHER STATEMENTS OF OFFERORS
- -------------------------------------------------------
X F DELIVERIES OR PERFORMANCE 5
- ------------------------------------------------------------------------------------------------------------------------------------
X G CONTRACT ADMINISTRATION DATA 12 L INSTR., CONDS., AND NOTICES TO
OFFERORS
- ------------------------------------------------------------------------------------------------------------------------------------
X H SPECIAL CONTRACT REQUIREMENTS 26 M EVALUATION FACTORS FOR AWARD
- ------------------------------------------------------------------------------------------------------------------------------------
CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE
- ------------------------------------------------------------------------------------------------------------------------------------
17. [X] CONTRACTORS NEGOTIATED AGREEMENT 18. [ ] AWARD (Contractor is not required to sign
(Contractor is required to sign this this document.) Your offer on Solicitation
document and return 3 copies to issuing Number __________________, including the
office.) Contractor agrees to furnish additions or changes made by you which
and deliver all items or perform all the additions or changes are set forth in full above,
services set forth or otherwise is hereby accepted as to the items listed above
identified above and on any continuation and on any continuation sheets. This award
sheets for the consideration stated herein. consummates the contract which consists of the
The rights and obligations of the parties following documents: (a) the Government's
to this contract shall be subject to and solicitation and your offer, and (b) this
governed by the following documents: award/contract. No further contractual
(a) this award/contract, (b) the solicitation, document is necessary.
if any, and (c) such provisions, representations,
certifications, and specifications, as are
attached or incorporated by reference
herein. (Attachments are listed herein.)
- ------------------------------------------------------------------------------------------------------------------------------------
19A. NAME AND TITLE OF SIGNER (Type or print) 20A. NAME OF CONTRACTING OFFICER
/s/ THOMAS P. DUNN, PRESIDENT DAVID J. ZARUBA
- ------------------------------------------------------------------------------------------------------------------------------------
19B. NAME OF CONTRACTOR 19C. DATE SIGNED 20B. UNITED STATES OF AMERICA 20C. DATE SIGNED
/s/ Thomas P. Dunn 9-28-94 BY /s/ David J. Zaruba 9/29/94
----------------------------- -----------------------------
(Signature of person (Signature of
authorized to sign) Contracting Officer)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NSN 7540-01-152-8069 26-107 STANDARD FORM 26 (REV. 2-85)
PREVIOUS EDITION UNUSABLE Prescribed by GSA
FAR (48 CFR) 53.214(a)
<PAGE>
SECTION B- SUPPLIES OR SERVICES AND PRICES/COSTS
B.1 Brief Description of Supplies
B.2 Consideration and Payment Schedule
B.3 Withholding of Payments
B.4 Incorporation of Technical and Price Proposal
B.5 Pricing Tables
B-1
<PAGE>
SECTION B- SUPPLIES OR SERVICES AND PRICES/COSTS
B.1 Brief Description of Supplies
The purpose of this indefinite quantity/indefinite delivery contract is to have
the contractor provide state-of-the-art microcomputer workstations, peripherals,
software, maintenance and supports services.
Pursuant to Federal Acquisition Regulation (FAR) clauses 52.225-1, Buy American
Certificate, and 52.225-8, Buy American Act Trade Agreements Act Balance of
Payments Program Certificate (see Section K), offerors shall separately identify
in the price schedules for each proposed item which is not a "domestic end
product", as defined in the latter clause.
B.2 Consideration and Payment Schedule
a. This is a Firm-Fixed Price Indefinite/Quantity, Indefinite Delivery
Contract. The total fixed price ceiling inclusive of the base period
and option periods (if the options are exercised) shall not exceed
$9,295,333.
b. The prices set forth in the Section B pricing schedules (Table B-l
through B-4) are fixed for all line items for the duration of the
contract year specified, but are subject to applicable discounts, if
appropriate.
c. It is HCFA's intent to replace approximately one-fifth of its 4200
workstations each year with state-of-the-art workstations, while
continuing to provide a workstation for each new employee. The
maximum quantity the Government is expected to purchase per year and
aver the life of the contract is 3600 workstations. However, due to
agency budgetary constraints, the government can only commit to
a minimum quantity of 60 workstations per year. It is anticipated
that the minimum quantity associated with maintenance will be
satisfied within the first contract year.
Note: The maximum quantity limitation does not include the
quantities to be purchased under the Government Employee Acquisition
Procedure (GEAP).
B-2
<PAGE>
- --------------------------------------------------------------------------------
CONTINUATION SHEET REF. NO. OF BEING CONT'D. PAGE 2 OF 136
###-##-####
- --------------------------------------------------------------------------------
NAME OF OFFEROR OR CONTRACTOR
DUNN COMPUTER CORPORATION
- --------------------------------------------------------------------------------
ITEM No. SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT
- --------------------------------------------------------------------------------
1 THE CONTRACTOR IS TO PROVIDE 1 EA
STATE-OF-ART MICROCOMPUTER
WORKSTATIONS, PERIPHERALS,
SOFTWARE, MAINTENANCE AND
SUPPORT SERVICES.
FOB: Destination
Payment:
DHHS, HCFA, OBA, OFM
DIVISION OF ACCOUNTING
P.O. BOX 7520
BALTIMORE, MARYLAND 21207-0520
(410) 966-5459
- --------------------------------------------------------------------------------
<PAGE>
SECTION B- SUPPLIES OR SERVICES AND PRICES/COSTS
B.3 Withholding of Payments
Notwithstanding any other payment provisions of this contract, failure of the
Contractor to submit required reports when due, or failure to perform or deliver
required work, supplies, or services, will result in the withholding of payments
under this contract unless such failure arises out of causes beyond the control,
and without the fault or negligence of the Contractor as defined by the clause
entitled "Excusable Delays:" or "Default:," as applicable. The Government shall
promptly notify the Contractor of its intention to withhold payment of any
invoice or voucher submitted.
B.4 Incorporation of Technical and Price Proposal
The Contractor's technical and business proposal entitled, "End User Computing
II", dated May 19, 1994 and amended by Best and Final Offer dated August 9, 1994
submitted in response to HCFA-RFP-93-034/CR is hereby incorporated into the
contract by reference and made a part of this contract. The Contractor shall
perform the work substantially as set forth in the technical proposal. Any major
revision to the Contractor's technical or cost proposal that would significantly
alter the technical approach must be approved in writing by the Contracting
Officer. In the event of any inconsistency between the provisions of this
contract and the Contractor's technical proposal, the inconsistency shall be
resolved by giving precedence in the following order: (a) Part I, The Schedule,
(b) Part II, FAR Clauses incorporated under Section I, (c) Contractor's
technical proposal, and (d) Other provisions of the contract, whether
incorporated by reference or otherwise.
Section K (Representations, Certifications, and Other Statements of Offerors),
as signed by the contractor on May 19, 1994 and is hereby incorporated by
reference into this contract.
B-3
<PAGE>
TABLE B-1 MANDATORY EQUIPMENT/SOFTWARE UNIT PRICE SCHEDULE
<TABLE>
<CAPTION>
Estimated
UNIT PRICE CONTRACT QUANTITY COMMERCIAL INSTALLATION
CLIN I DESCRIPTION OFFERED YEAR PRICE
<S> <C> <C> <C> <C> <C> <C>
0001 Desktop Workstation $1,785.00 1 1000 $2,142 $35
$1,099.00 2 1000 $1,319 $35
$822.00 3 1000 $986 $35
0004 Laptop Computer $2,499.00 1 135 $2,999
$2,415.00 2 135 $2,898
$1,932.00 3 130 $2,318
0010 Laser Printer $1,650.00 1 170 $1,980
$1,550.00 2 165 $1,860
$1,350.00 3 165 $1,620
Last Equipment Item
</TABLE>
B-4
<PAGE>
TABLE B-2 MANDATORY OPTIONAL FEATURES
UNIT PRICE CONTRACT *Estimated COMMERCIAL
CLIN I DESCRIPTION OFFERED YEAR QUANTITY PRICE
0002 Tower Workstation $1,889 1 200 $2,495
$1,160 2 200
$945 3 200
0003 Network Interface Option $160 1 1200 $299
$140 2 1200
$136 3 1200
0005 Color Laptop Computer $4,556 1 35 $4,650
$3,797 2 35
$3,038 3 30
0006 17' Display Upgrade $425 1 65 $1,295
$350 2 65
$300 3 70
0007 500MB Fixed Disk Option $160 1 165 $895
$100 2 165
$88 3 170
0006 6MB RAM Upgrade $256 1 330 $399
$256 2 330
$256 3 340
0009 ISA CD-ROM Reader & Kit $648 1 100 $795
$398 2 100
$324 3 100
0009A MCA CD-ROM Reader and Kit $773 1 70 N/A
$475 2 65
$386 3 65
l001A WordPerfect- Workstation DOS $89 1 120 $295
WINDOWS,0S/2 $85 2 120
$80 3 210
1001B WP-network-5 user license $445 1 50 $950
$422 2 50
$400 3 50 --
1001C WP-network-20 user license $1,760 1 25 $3,500
$1,691 2 25
$1,602 3 25
1001D WP-network-100 user license $8,900 1 5
$8,455 2 5 $16,500
$8,010 3 4
1001E WP documentation $40 1 250 $40
$38 2 250
$36 3 250
1002A LOTUS 1-2-3 workstation DOS $122 1 120 $349
Windows, OS/2 $116 2 120
$110 3 210
1002B LOTUS 1-2-3 network-S user $610 1 50 $1,295
license $579 2 50
$549 3 50
1002C LOTUS 1-2-3 network-20 user $2,440 1 25 $4,450
license $2,318 2 25
$2,196 3 25
B-5
<PAGE>
TABLE B-2 MANDATORY OPTIONAL FEATURES
UNIT PRICE CONTRACT *Estimated COMMERCIAL
CLIN I DESCRIPTION OFFERED YEAR QUANTITY PRICE
1002D LOTUS 1-2-3 network-10 user $12,200 1 5 $24,950
license $11,590 2 5
$10,980 3 4
1 002E LOTUS documentation $20 1 250 $35
$19 2 250
$18 3 250
OPTIONAL EQUIPMENT
1-2/2001 466DX2166 DESKTOP $1,95 $ 2,899
ISA/VESA Mothboard
chassis and power supply
15" SVGA,MPR,NI,.28dp monitor
Mouse and pad
340mb HDD
8MB RAM
Video WI 1MB VRAM
1 Parallel, 2 serial ports
3.5" floppy
101 keyboard
DOS 6.2
2 boxes 3.5" HD disketts
3 yr on-site warranty
1-2/2002 Cache upgrade to 256KB $149 $199
1-2/2003 15" Monitor upgrade $300 $499
1-2/2004 545 MB DISC $550 $695
1-2/2005 SE305 TAPE DRIVE $299 $349
*The estimated quantities listed above may vary throughout the period of
performance of the contract.
B-6
<PAGE>
TABLE B-3 MANDATORY OPTIONAL SOFTWARE/EOUIPMENT FOR DISABLED ACCESSIBILTY
UNIT PRICE CONTRACT *Est. COMMERCIAL
CLIN I DESCRIPTION OFFERED YEAR QUANTITY PRICE
3001 Telesensory screenpower speech $1,495 1 1 $1,495
$1,495 2 1
3002 $1,495 3 1
Telesensory screenpower braille $3,995 1 1 $3,995
$3,995 2 1
3003 $3,995 3 1
Telesensory vista/ track $2,495 1 1 $2,495
$2,495 2 1
3004 $2,495 3 1
MSl seeBeep $29 1 1 $29
$29 2 1
3005 $29 3 1
IBM keyguard $79 1 1 $79
$79 2 1
3005 $79 3 1
IBM access DOS $10 1 1 $10
$10 2 1
3007 $10 3 1
Dragon dictate classic $995 1 1 $995
$995 2 1
$995 3 1
*The estimated quantities listed above may vary throughout the period of
performance of the contract.
B-7
<PAGE>
Table B-4 Mandatory Remedial Maintenance on Existing Equipment
<TABLE>
<CAPTION>
UNIT PRICE CONTRACT * Estimated COMMERCIAL
CLIN DESCRIPTION OFFERED YEAR QUANTITY PRICE
2001 Maintenance
<S> <C> <C> <C> <C> <C>
2001A IBM PS/2 Model 30 $5.40 1 1000
$5.40 2 1000 NOT
$5.40 3 1000 AVAILABLE
2001B IBM PS/2 Model 4OSX $5.40 1 100
$5.40 2 100
$5.40 3 100
2001C IBM PS/2 Model 50 $5.40 1 25
$5.40 2 25
$5.40 3 25
2001D IBM PS/2 Model 50Z $5.40 1 25
$5.40 2 25
$5.40 3 25
2001E IBM PS/2 Model S5SX $5.40 1 300
$5.40 2 300
$5.40 3 300
2001F IBM PS/2 Model 56SLC $6.30 1 0
$6.30 2 0
$6.30 3 250
2001G IBM PS/2 Model 60 $5.40 1 20
$5.40 2 20
$5.40 3 20
2001H IBM PS/2 Model 70 $6.30 1 75
$6.30 2 75
$6.30 3 75
20011 IBM PS/2 Model 80 $7.20 1 300
$7.20 2 300
$7.20 3 300
2001J IBM Value Point Model M51 $6.30 1 0
$6.30 2 0
$6.30 3 500
2001k AST 286 $5.40 1 75
$5.40 2 75
$5.40 3 75
2001L Compaq LTE 286 $5.40 1 25
$5.40 2 25
$5.40 3 25
2001M Compaq Portable II $8.10 1 30
$8.10 2 30
$8.10 3 30
2001N ToshibaTl2OO $8.10 1 10
$8.10 2 10
$8.10 3 10
</TABLE>
B-8
<PAGE>
Table B-4 Mandatory Remedial Maintenance on Existing Equipment
<TABLE>
<CAPTION>
UNIT PRICE CONTRACT * Estimated COMMERCIAL
CLIN DESCRIPTION OFFERED YEAR QUANTITY PRICE
<S> <C> <C> <C> <C>
20010 ToshibaT3lOO $7.20 1 50
$7.20 2 50
$7.20 3 50
2001P Zenith286laptop $8.10 1 15
$8.10 2 15
$8.10 3 15
2001Q HPLaserJet $6.30 1 3
$6.30 2 3
$6.30 3 3
2001R HP LaserJet Series II $6.30 1 50
$6.30 2 50
$6.30 3 50
2001S HP LaserJet Series III $6.30 1 25
$6.30 2 25
$6.30 3 25
2001T HP LaserJet Series IV $6.30 1 30
$6.30 2 30
$6.30 3 40
2001U HPDeskJet5OO+ $7.20 1 10
$7.20 2 10
$7.20 3 10
2001V HPScanJet9l9OA $3.60 1 2
$3.60 2 2
$3.60 3 2
2001W IBM Laser Pnnter Model 4019 $6.30 1 300
$6.30 2 300
$6.30 3 300
2001X IBM Laser Printer Model 4029 $6.30 1 50
$6.30 2 100
$6.30 3 200
</TABLE>
*The estimated quantities listed above may vary throughout the period of
performance of the contract.
B-9
<PAGE>
TABLE B-5 NON EVALUATED OPTION- EMPLOYEE PURCHASE PLAN
<TABLE>
<CAPTION>
UNIT PRICE CONTRACT INSTALLATION
CLIN DESCRIPTION OFFERED YEAR
<S> <C> <C> <C> <C>
0001 Desktop Workstation $1,785.00 1 $50
$1,099.00 2 $50
$957.00 3 $50
0004 Laptop Computer $2,499.00 1
$2,415.00 2
$1,932.00 3
0010 Laser Printer $1,650.00 1
$1,550.00 2
$1,350.00 3
Last Equipment Item
</TABLE>
Prices do not include maintenance
B-10
<PAGE>
TABLE B-6 PRICE EVALUATION SUMMARY
<TABLE>
<CAPTION>
CLIN TABLE YEAR COST YEAR COST YEAR COST
<S> <C> <C> <C> <C> <C> <C> <C>
0001 B-1 1 $1,820,000 2 $1,134,000 3 $857,000
0002 B-2 1 $377,800 2 $232,000 3 $189,000
0003 B-2 1 $192,000 2 $168,000 3 $163,200
0004 B-1 1 $337,365 2 $326,025 3 $251,160
0005 B-2 1 $159,460 2 $132,895 3 $91,140
0006 B-2 1 $27,625 2 $22,750 3 $21,000
0007 B-2 1 $26,400 2 $16,500 3 $14,960
0008 B-2 1 $84,480 2 $84,480 3 $87,040
0009A B-2 1 $64,800 2 $39,800 3 $32,400
0009B B-2 1 $54,110 2 $30,875 3 $25,090
0010 B-1 1 $280,500 2 $255,750 3 $222,750
1001
l00lA B-2 1 $10,680 2 $10,200 3 $16,800
1001B B-2 1 $22,250 2 $21,100 3 $20,000
1001C B-2 1 $44,500 2 $42,275 3 $40,050
1001D B-2 1 $44,500 2 $42,275 3 $32,040
1001E B-2 1 $10,000 2 $9,500 3 $9,000
1002 B-2 1 $0 2 $0 3 $0
1002A B-2 1 $14,640 2 $13,920 3 $23,100
1002B B-2 1 $30,500 2 $28,950 3 $27,450
1002C B-2 1 $61,000 2 $57,950 3 $54,900
1002D B-2 1 $61,000 2 $57,950 3 $43,920
1002E B-2 1 $5,000 2 $4,750 3 $4,500
2001A B-4 1 $64,800 2 $64,800 3 $64,800
2001B B-4 1 $6,480 2 $6,480 3 $6,480
2001C B-4 1 $1,620 2 $1,620 3 $1,620
2001D B-4 1 $1,620 2 $1,620 3 $1,620
2001E B-4 1 $19,440 2 $19,440 3 $19,440
2001F B-4 1 $0 2 $0 3 $18,900
2001G B-4 1 $1,296 2 $1,296 3 $1,296
200H B-4 1 $5,670 2 $5,670 3 $5,670
2001I B-4 1 $25,920 2 $25,920 3 $25,920
2001J B-4 1 $0 2 $0 3 $37,800
2001K B-4 1 $4,860 2 $4860 3 $4,860
2001L B-4 1 $1,620 2 $1,620 3 $1,620
2001M B-4 1 $2,916 2 $2,916 3 $2,916
2001N B-4 1 $972 2 $972 3 $972
2001O B-4 1 $4,320 2 $4,320 3 $4,320
2001P B-4 1 $1,458 2 $1,458 3 $1,458
2001Q B-4 1 $227 2 $227 3 $227
2001R B-4 1 $3780 2 $3,780 3 $3,780
2001S B-4 1 $1,890 2 $1,890 3 $1,890
2001T B-4 1 $2,268 2 $2,268 3 $3,024
2001U B-4 1 $864 2 $864 3 $864
2001V B-4 1 $86 2 $86 3 $86
2001W B-4 1 $22,680 2 $22.680 3 $22,680
2001X B-4 1 $3,780 2 $7,560 3 $15,120
3,907,177 2,914,292 $2,473,863
</TABLE>
B-11
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
C.1 Introduction
C.2 Scope of Work
C.3 MANDATORY GENERAL REOUIREMENTS
C.3.l Compatibi1ity
C.3.2 Safety
C.3.3 Energy-Efficient Microcomputers. Video Displays and Printers
C.4 MANDATORY EOUIPMENT/SOFTWARE SPECIFICATIONS
C.4.1 Workstation
C.4.1.1 Genera1 Requirements
C.4.1.2 System Board
C.4.1.3 Microprocessor
C.4.1.4 Math Coprocessor
C.4.1.5 Memory
C.4.l.6 Keyboard
C.4.1.7 3.5 Inch Diskette Drive
C.4.1.8 220 Megabyte Fixed Disk (Minimum Size)
C.4.l.9 Super Video Graphics Array (SVGA) Color Disp1ay (14") /Adapter
C.4.1.l0 Surge Suppressor
C.4.2 Laser Printer
C.4.3 Laptop Computer
C.4.3.l General Requirements
C.4.3.2 System Unit
C.4.3.3 Laptop Display/Adapter Specifications
C.4.3.4 Laptop Fixed Disk
C.4.3.5 Laptop Diskette Drive
C.4.3.6 Laptop Keyboard
C.4.3.7 Carrying Case
C.4.3.8 Battery
C.4.3.9 Laptop Pointinq Device
C.4.3.l0 Modem
C.4.4 Operating System
C.4.5 Diagnostic Utility
C-1
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
C.5 MANDATORY OPTIONAL FEATURES
C.5.l Network Interface Option
C.5.2 500 Megabytes Fixed Disk (Minimum Size)
C.5.3 Super VGA Color Display (17")
C.5.4 Word Processing Software
C.5.5 Word Processing Software (LAN Version)
C.5.6 Spreadsheet Software
C.5.7 Spreadsheet (LAN Version)
C.5.8 External CD-ROM Reader & Interface Kit
C.5.9 Color Laptop Computer
C.5.9.l Color Display
C.5.9.2 Display Adapter
C.5.l0 Tower Workstation
C.5.l0.1 Case
C.5.l0.2 Expansion Bays
C.5.l0.3 Expansion Slots
C.5.ll Workstation Memory Augmentation
C.6 MANDATORY OPTIONAL SOFTWARE/EOUIPMENT FOR DISABLED
C.6.l FUNCTIONAL SPECIFICATIONS
C.6.l.l Input Alternatives
C.6.l.2 Output Alternatives
C.6.l.3 Documentation
C.7 INSTALLATION/DELIVERY
C.7.l Miscellaneous
C.7.2 System Assembly and Burn-in Procedures
C.7.2.l Hardware Burn-in
C.7.2.2 Software Loading
C.7.2.3 Installation Problems
C.7.2.4 Site Visit
C.7.3 Test Equipment
C.8 REMEDIAL MAINTENANCE
C.8.l On-Call Maintenance Services
C.8.2 Maintenance Coverage
C.8.3 Remedial Maintenance
C.8.4 Return-To-Operation Time
C.8.5 Responsibilities of the Contractor
C.8.6 Maintenance Items
C.9 FIELD-PROVEN EOUIPMENT AND SOFTWARE
C.l0 USE OF EXISTING FACILITIES
C-2
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
C.ll NEW EOUIPMENT
C.12 SOFTWARE SUPPORT
C.13 TECHNOLOGY SUBSTITUTION
C.13.1 Overview
C.13.2 Types of Substitutions
C.13.3 Minimum Qualifications For Acceptance of Substitutions
C.13.4 Pricing of Substitutions
C.13.5 Delivery of Substitutions
C.13.6 Identification of Technologically Advanced Products
C.13.7 Technologically Advanced Products From Alternate Sources
C.14 NON-EVALUATED OPTION
C.14.l EMPLOYEE PURCHASES
C-3
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
C.l Background
The current environment within the Health Care Financing Administration (HCFA)
is built on a three-tiered architecture. The highest tier is composed of 2 IBM
3090 mainframe computers. The middle tier consists of two 9370 minicomputers in
the HCFA Data Center (HDC) and one 9370 in each regional office. The final tier
is composed of approximately 4,200 microcomputers HCFA-wide of various
configurations and capabilities. Many of these microcomputers are connected to
the mainframe computers, the minicomputers or both through direct 3270
connection or Local Area Network (LAN) gateways. In the next few years, the
Baltimore components, including the HDC, are projected to be physically
relocated to a single site. Future plans forecast that there will be upgrades
and connectivity which will allow for the minicomputer platform to be replaced
by a phase-in of LANs connected by fiber optic backbone to each other and to the
mainframe in a single site location.
Objective
The purpose of this contract is to provide continued End User Computing II
(EUCII) support in fiscal year 1994 and beyond, in the areas of microcomputer
hardware, software, maintenance and support services. This contract is for the
acquisition of up to 3600 personal computer systems and related accessories for
base year and two (2) option years, as well as for the ongoing remedial
maintenance of a currently installed base of approximately 1700 personal
computers and accessories located in HCFA's Washington, D.C. offices, ten
regional offices, and outstations of regional offices.
C-4
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SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
C.2 Scope of Work
(a) The contractor shall furnish, as required, the hardware, software,
supplies, maintenance and other contractor support services required
for the installation and support of all items supplied under this
contract. Such hardware, software, supplies, maintenance and other
contractor support services shall be supplied in conformance with the
terms and conditions of this contract.
(b) These specifications describe the necessary hardware, software and
services used to support workstations for Health Care Financing
Administration (HCFA) offices. The workstations will be used to
support end user computing and office automation activities in all
HCFA offices in Baltimore, Maryland; Washington, D.C., 10 regional
offices; and regional office outstations as listed in Section J.
(c) The contractor shall provide the hardware, software, supplies,
maintenance and other contract support services according to the
specifications stated in Section C. Any additional components
necessary to satisfy the specified performance and configuration
requirements shall also be identified by the contractor and included
in the equipment cost tables in Section B.
(d) The contractor shall provide maintenance on existing microcomputer
equipment in all HCFA geographical locations except Baltimore,
Maryland.
(e) Following award of the contract, the contractor shall provide
equipment to be tested by the Government as defined in Section E. The
Government shall inspect this equipment to ensure proper component
installation, hardware and software setup, and proper
interoperability. Such inspection shall take place after the delivery
of test equipment to HCFA in Baltimore and before any equipment is
delivered to user locations.
C-5
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
C.3 MANDATORY GENERAL REOUTREMENTS
C.3.l Compatibility
The objective of this procurement is to provide end user computing and
office automation capabilities to HCFA offices. The workstations shall
be multifunction microcomputers. It is HCFA's intention to use these
workstations with the software provided in this contract plus
commercial off-the-shelf and custom developed applications obtained
outside this contract. HCFA will connect these workstations with
Novell local area networks (LANs) and wide area networks (WANs). In
order for the workstations provided in this contract to become an
integral part of HCFA's IRM System Plan, it is essential that they be
100% software compatible with the IBM PC/AT and IBM PS12. This does
not mean that the equipment shall be IBM, but that it shall fully
accommodate hardware and software designed to operate on IBM
microcomputers.
C.3.2 Safety
Shielded Power Supply - All power supplies shall be shielded to meet
industry standards as listed below.
(1) Federal Communication Commission (FCC) Certification - All
hardware, where applicable, shall meet FCC requirements for
certification of compliance with maximum allowable radiation
limits. The workstation, laptop computer, video display, external
disk cartridge system, portable disk cartridge system and
printer(s) shall be FCC Class B certified as of the RFP closing
date.
(2) Underwriter's Laboratories (UL) Approval - All hardware requiring
a 120 volt power source shall be UL listed (approved) as of the
RFP closing date. UL stickers shall be displayed externally on
the hardware.
C-6
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
C.3.3 Energy-Efficient Microcomputers. Video Displays and Printers
All desktop and laptop computers and laser printers shall meet the
following specifications:
(1) The equipment shall qualify for the EPA Energy Star logo by
meeting the EPA requirements for energy efficiency, effective
October 21, 1993. For notebook PCs, offerors shall document
manufacturer compliance to Energy Star requirements.;
(2) The equipment shall have equivalent functionality to similar
non-power managed commercially available models. This
functionality should include but is not limited to:
a. The ability to run commercial off-the-shelf software both
before and after recovery from a low-power state, including
retention of files opened before the power management
feature was activated.
b. Complete interoperability with local area networks and other
operational environments.
(3) The equipment shall be equipped with a lower-power standby
feature unless it meets the EPA Energy Star requirements at all
times. If equipped with a lower-power standby feature, it shall:
a. Be shipped with this feature fully enabled;
b. Have the capability of entering and fully recovering from the
low-power standby mode, and maintaining RAM intact. Equipment
shall automatically recover full operating capability immediately
upon the next access of the device;
c. Have user-selectable power management features including the
power level in standby mode and the length of inactivity before
initiating standby mode.
C-7
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
C.4 MANDATORY EOUIPMENT/SOFTWARE SPECIFICATIONS
"Mandatory Equipment/Software Specifications" designates base requirements
that are minimum specifications and must be met in order for the proposal
to be technically acceptable.
The project officer will be responsible for specifying the configuration
and physical location of each system at the issuance of a delivery order.
C.4.l Workstation
C.4.l.l General Requirements
a. Workstation Configuration
A workstation shall consist of:
1) a system unit including:
o 80486DX microprocessor;
o microprocessor speed of 33 MHz or greater;
o 220 MB Hard Drive or larger, 16 ms or faster
average seek time;
o 8 MB RAM minimum;
o 1 MB Video RAM minimum;
o 1 parallel and 2 serial ports, minimum;
o Mouse Port;
o 3.5" 1.44 MB diskette Drive;
2) 14" Video Display, Super VGA, low emission,
non-interlaced, .28 dot pitch or lower;
3) Mouse and mouse pad
4) 101 Keyboard;
5) Pre-loaded MS DOS 6.0 or, at the government's option,
the most current DOS version;
6) Two (2) boxes of ten (10) 3.5" high density diskettes
each;
b. Case
The workstations shall be constructed with a heavyweight
steel recyclable case. The front panel may be of plastic.
C-8
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
c. IBM Compatible
All processing units shall be 100 IBM PC/AT and IBM PS/2
software compatible machines.
d. Processor and Operating System Compatibility
The processor is a functional unit that interprets and
executes instructions. The workstation processor shall run
the latest release of MS-DOS (Version 6.0 or the most
current version) and OS/2 (Version 2.1 Extended Edition (EE)
or the most current version). It shall also run Novell
Netware 3.11 and all more current versions. Applications
designed to run under these operating systems shall meet the
required standard of operation on the offered hardware.
e. Software Compatibility
(1) Workstations shall be able to run commercial
off-the-shelf software designed for MS-D051 Windows,
and OS/2 without hardware or software modification and
without any special configuration procedures. At a
minimum, all workstations shall run all of the software
provided under this contract, Microsoft Windows 3.1 and
all later versions, Wordperfect 5.0 and all later
versions, and Lotus 1-2-3 2.01 and all later versions.
(2) Workstations shall run off-the-shelf application
software developed and written for the IBM PC/AT or IBM
PS/2 without modification.
f. Security
Security shall be provided to prevent unauthorized access to
the system. The user shall have the capability to lock the
system without the need to reboot the system when the
workstation is unlocked. If keylocks are used,
C-9
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
at least two (2) keys shall be provided with each
workstation and there shall be at least 50 distinct key
profiles, randomly distributed, to minimize the number of
workstations a single key will unlock. Two (2) sets of
master keys shall be provided to the project officer.
A user-selectable power-on password capability shall also be
included.
g. Internal Day/Time Clock
Each system shall include an internal day/date tine clock
with a battery backup, so that the date and time is
maintained when the system is turned off, or electrical
power fails.
h. Case Dimensions
The case for the desktop system shall not exceed any of the
following external dimensions:
o 8 inches high;
o 18 inches wide; and
o 18 inches deep.
i. Expansion Bays
After the workstation has been configured, the system unit
chassis shall have at least one half-height bay available
for addition of disk drives or other devices. The unused
expansion bay shall be externally accessible with a cover
over the opening if no other devices are included.
j. Power Supply
The power supply shall be a minimum of 200 watts. It shall
comply with the EPA Energy Star requirements. Shall be
capable of operating on 110 volt, 60 cycles per second
alternating current.
C-10
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
k. Serial Ports
Each workstation shall be equipped with at least two (2) serial
ports integrated on the system board, with connectors that are
either IBM PC/AT style RS-232 9-pin male serial connectors or 25-pin
male connectors conforming to EIA RS-232C specifications. The serial
ports shall be capable of sustaining input and output transmission
speeds of 115,000 baud or higher.
If the contractor provides a 9-pin serial port, the contractor shall
provide a 9-pin to 25-pin molded cable for connection to external
data communication equipment (DCE), a minimum of 6 feet in length.
1. Mouse Port
Mouse port shall be standard PS/2 compatible DIN, 6 pin
configuration.
m. Mouse
An ergonomically designed mouse shall be ordered configured with a
workstation. It shall meet the following specifications:
(1) Ball Type Mouse
Shall operate on any flat surface without the need for special
pads or surfaces. The mouse shall connect to the dedicated
mouse port on the workstation.
(2) Resolution
Shall have a resolution of at least 400 points per inch.
(3) Buttons
Shall have a minimum of two (2) programmable buttons and a
maximum of three (3) programmable buttons. Shall be
programmable for a right-handed or left-handed user.
C-11
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
(4) Cord Length
Cord length shall be at least six (6) feet.
(5) Emulation
Shall have the capability of emulating the latest version of
the Microsoft Mouse and Logitech Mouse drivers available on
the RFP closing date.
(6) Applications Software Compatibility
Shall support the following applications software at a
minimum:
o all of the software provided under this contract;
o Microsoft Windows 3.1 (and later);
o WordPerfect 5.0 (and later); and
o Lotus 1-2-3 2.01 (and later).
(7) Mouse Drivers
a. Shall be capable of using the mouse drivers supplied
with the most recent version of MS-DOS, OS/2, and
Windows.
b. The driver shall support ballistic tracking.
(8) Shall include a mouse pad.
(9) Documentation
Each mouse shall come with a complete set of documentation.
All manuals shall be original and phototypeset. Manuals shall
be the same quality as those provided by the manufacturer to
its commercial customers.
C-12
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
n. Parallel Port
Each workstation shall be equipped with a minimum of one enhanced
parallel port integrated on the system board, with a 25-pin
connector that allows connection to devices that use a standard
Centronics parallel communications interface. The port shall allow
simultaneous bi-directional data transfer.
o. Setup Utility
The workstation shall include an internal setup utility to modify
the stored configuration and the date and time. This utility shall
be able to be activated during the power-on process via keyboard
control.
p. Speaker
Each workstation shall be equipped with an internal speaker.
q. BIOS Shadowing
Each workstation shall be equipped with the ability to provide
shadowing of BIOS which can be enabled and disabled by the user
through the setup utility described in section C.4.1.1(o).
r. Power and Reset Controls
Each system unit shall have operable system unit power on/off and
reset switches located on the front of the system unit. Each system
unit shall also have an operable power indicator light that visibly
displays the on/off state of the system unit.
s. System Operation
The system unit and all installed devices shall be fully functional
whether the system unit is in a vertical or horizontal position.
C-13
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
t. Documentation
Each workstation shall come with a complete set of documentation for
all hardware components, software and the operating system. The
manuals shall include, at a minimum, the settings of all
switches/jumpers on the system board, memory expansion and
configuration procedures, set-up procedures, and layout of the
system board. All manuals shall be original and phototypeset.
Manuals shall be the same quality as those provided by the
manufacturer to its commercial customers.
C.4.l.2 System Board
a. Bus Compatibility
All processing units shall use either the 16-bit Industry Standard
Architecture (ISA) or Extended Industry Standard Architecture
(EISA). The system board shall include Video Electronics Standards
Association (VESA) local bus capability.
b. Expansion Slots
After the workstations have been configured, the peripheral bus
shall have at least four (4) unused slots for future expansion.
Three of the unused slots shall accommodate full-size printed
circuit boards designed for the bus provided. At least one of the
unused slots shall be VLSA local bus capable.
c. Adapter Board Width
Installed boards provided by the contractor shall not restrict the
use of the unused slots, i.e., installed boards shall not be so wide
as to prevent installation of boards in adjacent slots.
C-14
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
d. System Board Design
System board design shall not restrict the installation of
full-length cards in the unused slots (e.g., memory modules on the
system board shall not obstruct installation of full-size cards in
the unused slots).
The system board shall be designed to allow access to microprocessor
and memory upgrade sockets without removal of the system board from
the case.
e. Component Compatibility
IBM token ring adapter and IBM 3270 emulation boards designed for
the IBM PC/AT bus shall function in the workstation.
f. Memory Capacity
Each workstation shall have a minimum capacity of 64MB of RAM on the
system board utilizing 4MB or larger Simulated Inline Memory Modules
(SIMMs). All SIMM sockets shall be located so that removal of the
power supply, fixed disk, or diskette drive, is not necessary to
perform an upgrade to 16MB of RAM.
g. Clock/Battery
Each workstation shall include an internal day/date time clock with
battery backup, so that date and time is maintained when the
workstation is turned off or electrical power fails.
h. The system board shall include a minimum 64KB cache that shall work
in conjunction with the microprocessor.
C. 4.1.3 Microprocessor
a. Processor
The workstation microprocessor shall be an 80486DX microprocessor,
or a microprocessor that is functionally equivalent to the 80486DX.
Functional equivalence shall include:
C-15
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
o full 32-bit data bus structure
o capability to address 4 gigabytes of main memory directly
o integrated math coprocessor, cache controller, and cache
memory.
The processor shall include an internal cache of at least 8KB. See
C.4.1.4 Math Coprocessor.
b. 33MHz Processor Speed
The microprocessor shall operate at an internal clock speed of
33,000,000 hertz (33MHz), NON-DOUBLED, or greater.
C.4.l.4 Math Coprocessor
The math coprocessor is a microprocessor physically integrated into the
80486DX chip. The mathcoprocessor supplements the operations of the main
processor in the system unit performing complex mathematical operations.
The math coprocessor shall operate at an internal clock speed of
33,000,000 hertz (33MHz), NON-DOUBLED, or greater. See C.4.l.3a.,
Processor.
C.4.1.5 Memory
a. 8MB RAM Memory
Each workstation shall contain 8MB of 32-bit RAM on the system
board, consisting of 4MB or larger SIMMs.
b. Memory Speed
RAM speed shall be rated at 80 nanoseconds or faster.
C.4.l.6 Keyboard
Each workstation shall be equipped with a detachable keyboard that meets
or exceeds the following specifications:
a. Number of Keys
Minimum of 101 keys, with a separate numeric
C-16
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
keypad to the right of the standard alphanumeric keys.
b. Keyboard Layout
Standard full-size typewriter style layout (QWERTY) with standard
placement of the Shift and Carriage Return keys.
c. Code Generation
Capable of generating the full 127 character American Standard Code
for Information Interchange (ASCII) set (decimal characters 1-27)
and the IBM high order ASCII characters (decimal characters 128 -
255).
d. Function Keys
There shall be at least twelve (12) dedicated user-defined function
keys located at the top of the keyboard.
e. Keyboard Modification
The keyboard character generation shall support modification by the
Shift, Ctrl and Alt keys to provide four (4) sets of key-codes from
the keyboard.
f. Mode Indicators
Light Emitting Diode (LED) indicator lamps shall display the state
of the following moues: Num Lock, Caps Lock and Scroll Lock and
shall be located on the keyboard.
g. Template Holder
Shall have a flat surface which extends at least 1.5 inches above
the function keys for holding keyboard templates.
h. Automatic Repeat
Shall have an automatic repeat function for all printable ASCII
characters, cursor controls and backspace functions.
1. Multikey Rollover
C-17
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
A multikey rollover function shall be included, i.e., when more than
one key is depressed simultaneously, the effective key is the last
one depressed.
j. Coiled Cord
Shall have a coiled cord at least seven (7) feet long, when
extended.
k. Style
Shall be a keyboard that gives positive tactile feedback.
C.4.l.7 3.5 Inch Diskette Drive
Each workstation delivered shall be equipped with one (1) diskette drive
that meets the following specifications:
a. Internal
Shall be installed in the workstations and configured as drive A:.
b. Capacity
Shall have a DOS formatted capacity of at least 1.44MB and support
formatted capacity of 1.44MB and 720KB.
c. In-Use Indicator
Shall have a visible in-use indicator located on the front of the
drive.
d. High Density Compatibility
Shall read and write 3.5 inch, 1.44MB and 720KB diskettes.
Formatting of 1.44MB and 720KB diskettes shall be capable on the
workstation provided.
e. IBM Compatible
Shall be compatible with the IBM PS/2 1.44MB 3.5 inch diskette
drive. Data exchange shall not require the use of conversion.
C-18
<PAGE>
SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
f. Mean Time Between Failure (MTBF)
Shall have a MTBF of at least 20,000 hours, as rated by the
manufacturer.
g. Diskettes
Twenty (20) 3.5 inch diskettes capable of storing 1.44MB of data
shall be provided with each workstation. Each diskette shall come
with a jacket and a label. Diskettes shall be 100 percent certified
error free (no batch testing) and shall be individually certified to
a clipping level of 65 or above as certified by the manufacturer.
C.4.1.8 220 Megabyte Fixed Disk (Minimum Size)
The minimum 220MB fixed disk shall be ordered configured with a
workstation. The fixed disk shall include a VESA local bus Integrated
Drive Electronics (IDE) controller. It shall meet the following
specifications:
(1) Capacity
Shall have a minimum DOS-formatted capacity of 220MB, as validated
by the operating system FDISK utility (1MB = 1048576 bytes). This
capacity shall be reached without use of disk compression software.
(2) Data transfer between the processor and the fixed disk shall be
through a 32-bit interface at a minimum.
(3) Sector Interleave
Shall allow and operate at maximum efficiency at a sector interleave
of 1-to-1.
(4) In-Use Indicator
Shall have a visible in-use indicator located on the front of the
system unit.
(5) Average Seek Time
Average seek time shall not be slower than 16 milliseconds, as
validated by The Norton Utilities, Version 7.0 or the most current
version.
C-19
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SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
(6) Data Transfer Rate
Shall have a data transfer rate of at least 1MB per second, as
validated by The Norton Utilities, Version 7.0 or the most current
version.
(7) Mean Time Between Failure (MTBF)
Shall have a MTBF of at least 100,000 hours of use, as rated by the
manufacturer.
(8) Parking of Heads
Fixed disk read/write heads shall automatically "park" (i.e., move
to a position to avoid physical damage) and lock during normal
power-down of the system.
(9) Head Disk Assembly
The disk drive shall have a shock-mounted head disk assembly.
C.4.l.9 Super Video Graphics Array (SVGA) Color Display (14") /Adapter
Each workstation shall be equipped with a Super Video Graphics Array
(SVGA) color display and adapter that meets or exceeds the following
specifications:
(1) In text mode, the video display shall have a minimum of 25 lines
with 80 characters per line, and shall display the 95 character
ASCII subset (decimal characters 32-126) and the IBM extended ASCII
character set (decimal characters 1-31 and 128-254).
(2) The video display shall be a high resolution color graphic display
generating a 1024x768 or greater matrix of picture elements
(pixels).
(3) The video display shall support and generate at least 256 colors at
a time at a resolution of 786,432 or greater pixels.
(4) The video display shall have a dot pitch of no more than .28
millimeters or an aperture grille pitch (for Trinitron tube) of no
more than .25 millimeters. The refresh rate shall be 72 hertz or
faster at a resolution of 800X600.
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(5) The video display shall have a cathode ray tube (CRT) with a minimum
diagonal size of 14 inches. The viewable portion of the screen shall
measure a minimum of 12.5 inches on the diagonal.
(6) The video display shall have operator adjustable screen lighting
intensity and contrast control features, a power on/off switch,
vertical and horizontal positioning adjustment, and a power
indicator light. These controls shall be located on the front of the
video display, and shall not extend beyond the face of the display.
(7) The video display shall have a non-glare viewing surface without the
need for an overlay shield.
(8) The video display shall limit electromagnetic fields (EMF). The
video display shall meet the Swedish MPR-II specification.
(9) The video display shall have a tilt and swivel base.
(10) The video display shall be compatible with all of the following
display adapter modes of operation:
o IBM Enhanced Graphics Adapter (EGA);
o IBM Video Graphics Array (VGA - 640x480);
o Video Electronics Standards Associations (VESA) Super VGA
(SVGA - 1024x768).
(11) The video display adapter shall be VESA Local Bus with a 32-bit data
bus and at least lMB of dual-ported video RAM.
(12) The video display adapter shall be capable of operating in all the
following emulation modes:
o IBM EGA;
o IBM VGA - 640x480;
o SVGA - 1024x768.
(13) The video display adapter shall support SVGA (1024x768) in both
standard 16-color and extended 256-color modes.
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(14) The video display shall operate in a non-interlaced mode in SVGA
(1024x768) mode.
(15) Shall include all video display drivers required to be compatible
with Windows version 3.1 and all more current versions, and OS/2
version 2.1 and all more current versions.
(16) Documentation
Each video display system shall come with a complete set of
documentation. All manuals shall be original and phototypeset.
Manuals shall be the same quality as those provided by the
manufacturer to its commercial customers.
C.4.l.10 Surge Suppressor
Each workstation shall be provided with a surge suppressor that meets the
following specifications:
a. Bar Type
Shall be of the bar type; i.e., outlets are in a single row, with a
minimum 6 foot cord.
b. Outlets
1) Shall have a minimum of six (6) outlets with all three (3)
polarity sockets (hot, neutral and ground) protected.
2) One of the outlets shall accommodate electrical transformers
that extend at least 0.75 inches to one side of the outlet.
Insertion of such transformers shall not interfere with other
outlets, switches or indicators.
c. Filtration
Shall have EMI/RFI electrical noise filters.
d. Illuminated Switch
Shall have an illuminated ON/OFF switch. This switch shall be
separated from surge protection "active" indicator light.
e. Internal Circuit Breaker
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Shall contain an internal circuit breaker with an external reset
switch that can be reset manually without the use of tools or
supplies. The use of fuses that require replacement is not
acceptable.
f. Response Time
Response time shall be one (1) nanosecond or less.
g. Peak Voltage
Shall have a maximum surge voltage of 6,000 volts or greater.
h. Surge Indicator
Shall have a lighted "protection active" indicator.
i. UL Approved
Shall have a UL 1449 rating of 400 volts or less for all three
polarity sockets.
j. Mounting Capability
Shall include hardware for optional mounting on wall, etc.
C.4.2 Laser Printer
The laser printer may be configured with a workstation or purchased
separately. It shall meet the following specifications:
(1) Shall print the 95-character ASCII subset (decimal characters 32-126
as well as the IBM extended ASCII character set (decimal characters
128-254).
(2) The printer shall have a manufacturer's rated speed of at least
eight (8) pages per minute in text mode and at least four (4) pages
per minute in graphics and mixed text/graphics modes.
(3) Shall include a memory buffer of at least 4MB. The memory shall be
fully contained and integrated into the printer.
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(4) Shall have a centronics parallel communications interface port that
interfaces to:
o to an IBM PC/AT parallel printer port, and
o the enhanced parallel printer port specified in Section
C.4.l.l.n.
(5) Shall provide Hewlett Packard (HP) LaserJet Series II (Printer
Control Language (PCL)), HP LaserJet Series III (PCL5), and IBM 4019
enhanced laser printer (Personal Printer Data Stream) emulation
modes.
(6) Shall include a molded printer cable at least ten (10) feet long to
connect the printer to the workstation's parallel port.
(7) Shall be able to accept font patterns intended for HP LaserJet
printers. These fonts shall be downloaded electronically from the
host computer to the printer and stored in the printer's memory.
(8) Shall provide at least the following resident (internally installed
in the printer, not downloaded) or font cartridge fonts. These fonts
shall include:
o Courier (10 pitch);
o 12 pitch serif font (e.g. Prestige Elite);
o 15 - 17 pitch font;
o Scalable, proportional sans serif font (e.g. Helvetica); and
o Scalable, proportional serif font (e.g. Times Roman).
(9) All fonts required in Section C.4.2(8) shall support bold,
underline, Italics and superscript/subscript printing.
(10) All fonts required in Section C.4.2(8) shall print in landscape, and
portrait modes.
(11) Both scalable fonts required in Section C.4.2(8) shall be scalable
in a range of at least 4 -144 points.
(12) Shall be able to store at least thirty-two (32) fonts at any one
time.
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(13) Shall be capable of printing a full, legal-size page of graphics at
300 dots per inch in a single pass.
(14) In both text and graphics mode, shall provide a resolution of 300
dots per inch for full page printing.
(15) Shall be capable of printing on overhead transparencies, envelopes
and standard HCFA 24-pound printed letterhead.
(16) Input and output trays shall hold standard 8 1/2 X 11 inch paper.
Input paper bin capacity shall be at least 200 sheets. Output paper
bin capacity shall be at least 100 sheets.
(17) Shall support an optional envelope feeder (not included in this
contract). Feeder shall feed envelopes of 7.36 - 9.5 inches in
length and 3.875 - 6.377 inches in width.
(18) The printer shall support and the contractor shall provide legal
size (8 1/2 X 14 inch) trays with the same capacity as the standard
trays. It is acceptable if one tray, with adjustment, can be used
for both standard and legal size paper.
(19) Shall accept paper weights from 16 to 24 pound inclusive.
(20) The printer engine shall have a manufacturer's estimated life
expectancy of at least 250,000 pages.
(21) The toner cartridge shall have at least a minimum of 250 grams of
toner cartridge capacity for optimum performance.
(22) The toner cartridge shall be a new cartridge, capable of being
recycled, and shall also serve as the reservoir for toner when the
printer is operating. Adding toner to the printer shall not involve
transfer of toner from one container to another.
(23) The contractor shall provide with each laser printer, enough
supplies (other than paper) to print 20,000 pages of text. All
supplies shall
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include clear instructions on their use and replacement procedures.
(24) Shall provide the following controls:
o Power on/off;
o Online/Offline;
o Continue/Reset;
o Form feed; and
o Self-test, with printout of results.
(25) Laser printer supplies, including toner or toner cartridges
recycling service and other consumable items, shall be available to
the Government from independent suppliers.
(26) Shall be fully operational with and supported by all of the software
available in this contract. The contractor shall identify and
implement any installation options and drivers necessary to make the
laser printer fully operational with the software.
(27) Shall be fully supported by WordPerfect 5.0 through the most current
version including all fonts supplied with the printer. If a driver
is needed, it shall be supplied and installed on the workstation.
(28) Printer noise level shall be no greater than 50 dBA (A-weight sound
pressure level) when measured at a distance of one meter from the
front of the printer. The contractor shall use integrated sound
muffling devices.
(29) Shall have a visual display of at least 12 characters showing error
messages and/or error codes. All messages and codes shall be fully
explained in the user's manual. The printer shall have menu-driven
function setup and emulation that shall be selectable through
front-panel controls. The printer shall be self-testing on power-up.
(30) Shall be Food and Drug Administration, Center for Device and
Radiological Health (CDRH) compliant.
(31) The printer shall allow the user to load a single sheet of paper,
separate from the input tray, that takes precedence over the input
tray without the
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need to remove the input tray.
(32) The printer shall use standard plain copier paper.
(33) The printer shall be capable of printing in both portrait and
landscape modes, on both letter and legal paper.
(34) Documentation
Each laser printer shall come with a complete set of documentation.
All manuals shall be original and phototypeset. Manuals shall be the
same quality as those provided by the manufacturer to its commercial
customers.
C.4.3 Laptop Computer
The laptop computer shall be ordered as a separate item. The laptop
computer shall meet the following specifications:
C.4.3.l General Requirements
a. Laptop Configuration
A laptop computer shall consist of:
1) 80486DX microprocessor operating at 33MHZ;
2) 8 MB RAM;
3) 160 MB Hard Drive, 16 ms or faster;
4) AC/DC capability
5) Power Pack;
6) Carrying Case;
7) Two Rechargeable Batteries;
8) Math Co-processor;
9) Internal Fax Modem, 9,600 bits per second (bps);
10) Mouse Port;
11) 1 serial port / 1 parallel port;
12) Pointing Device;
13) 3.5" 1.44 MB diskette drive;
14) Pre-loaded MS DOS 6.0, or most current version;
15) Pre-loaded Wordperfect 5.1, or the most current DOS version;
16) Two (2) boxes of ten (10) 3.5" high density diskettes each;
17) Two (2) Personal Computer Memory Card
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International Association (PCMCIA), type II or type III,
expansion slots, minimum.
18) VGA monochrome display, 9" diagonal display area
b. The entire system, including system unit, display, keyboard,
pointing device and battery shall close into a single unit for
transportation.
c. The entire system including system unit, display, fixed disk,
diskette drive, keyboard, battery, AC power connection, pointing
device and carrying case shall not exceed ten (10) pounds in weight.
d. Shall be capable of operating on 110 volt, 60 cycles per second
alternating current.
C.4.3.2 System Unit
a. Processor and Operating System Compatibility
The laptop computer processor shall run the latest release of MS-DOS
(currently Version 6.0) and OS/2 (Version 2.1 EE or the most current
version). Applications designed to run under these operating systems
shall work properly on the offered hardware.
b. DOS Compatibility
1) Laptop computers shall be able to run commercial off-the-shelf
software designed for MS-DOS without hardware or software
modification and without any special configuration procedures.
At minimum, all laptop computers shall run all of the software
provided under this contract, Microsoft Windows 3.1 (or the
most current version), Wordperfect 5.0 (or the most current
version) and Lotus 1-2-3 2.01 (or the most current version)
2) Laptop computers shall run off-the-shelf application software
developed and written for the IBM PC/AT or IBM PS/2 without
modification.
c. Shall include a 15-pin connector for attachment
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of an external 1024x768 color SVGA video display.
d. Microprocessor shall be a 80486DX microprocessor or equivalent to
the 80486DX (see section C.4.l.3(a)) and shall operate at a speed of
33 megahertz, NON-DOUBLED, or greater. It shall include an internal
cache of at least 8KB.
e. Shall include an internal day/date time clock with battery backup,
so that date and time is maintained when the system is turned off,
or electrical power fails.
f. Shall have a minimum of 8MB of RAM.
g. Shall be equipped with a serial port with a connector that is either
an IBM PC-AT RS232 9-pin male serial connector or a 25-pin male
connector conforming to EIA RS-232c specifications.
h. Shall be equipped with a parallel port with an IBM-compatible 25-pin
connector that allows connection to devices that use a standard
Centronics parallel communications interface.
1. Shall be equipped with an internal speaker.
C.4.3.3 Laptop Display/Adapter Specifications
a. Each laptop computer shall be equipped with a display and adapter
that meets the following specifications.
b. In text mode, the video display shall have a minimum of 25 lines
with 80 characters per line and shall display the 95 character ASCII
subset (decimal characters 32-126) and the IBM extended ASCII
character set (decimal characters 1-31 and 128-254).
c. The video display and adapter shall be compatible with the IBM Video
Graphics Array (VGA - 640x480) and shall provide at least 64 shades
of gray. The adapter shall be configured with a minimum of 1MB of
dual-ported video RAM.
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d. The video display shall be high quality to allow easy viewing and
reading of data from the display. The display shall use one of the
following technologies:
o electroluminescent; or
o backlit supertwist liquid crystal display (LCD).
e. The visible portion of the screen shall measure a minimum of nine
(9) inches on the diagonal.
f. The display shall include contrast and intensity controls.
g. Shall have an external color VGA adapter port capable of supporting
an external monitor and displaying a minimum of 256 colors.
C.4.3.4 Laptop Fixed Disk
Each laptop computer shall contain a fixed disk that meets the following
specifications:
a. Shall have a minimum DOS-formatted capacity of 160MB as validated by
the operating system FDISK utility (1MB = 1048576 bytes).
b. Shall have a visible in-use indicator.
c. Fixed disk read/write heads shall automatically "park" (i.e., move
to a position to avoid physical damage to the heads) during normal
power-down of the system.
d. The fixed disk drive shall include a "spin-down" feature to
discontinue spinning of the fixed disk drive during idle periods.
The fixed disk drive shall automatically resume operation
immediately upon the first access after an idle period.
e. The fixed disk shall have a shock mounted head disk assembly.
f. The fixed disk shall have a data transfer rate of 600Kb per second
as validated by the Norton Utilities, Version 7.0 or the most
current version.
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C.4.3.5 Laptop Diskette Drive
Each laptop computer shall be equipped with a diskette drive that meets
the following specifications:
a. Shall have a DOS formatted capacity of 1.44MB.
b. Shall have a visible in-use indicator.
c. Shall read and write 3.5 inch 1.44MB diskettes. Formatting of 1.44MB
diskettes shall be performed on the laptop computers provided.
d. Shall read and write 3.5 inch, 720KB diskettes. Formatting of 720KB
diskettes shall be performed on the laptop computers provided.
e. Shall be compatible with the IBM PS/2 1.44MB diskette drive. Data
exchange shall not require the use of conversion.
f. Ten (10) 3.5 inch diskettes capable of storing 1.44MB of data shall
be provided with each laptop computer. Each diskette shall come with
a jacket and a label. Diskettes shall be 100 percent certified error
free (no batch testing) and shall be individually certified to a
clipping level of 65 or above as certified by the manufacturer.
C.4.3.6 Laptop Keyboard
Each laptop computer shall be equipped with a keyboard that meets the
following specifications.
a. Capable of generating the full 127 character American Standard Code
for Information Interchange (ASCII) set (decimal characters 1-127)
and the IBM high order ASCII characters (decimal characters 128-255)
and of being redefined by software.
b. Standard typewriter style layout (QWERTY) with standard placement of
the Shift and Carriage Return keys.
c. Shall have cursor control keys that have an automatic repeat
function and are located in the lower right hand corner in an
"inverted T" layout.
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d. The Pg-Up, Pg-Dn, Home and End keys shall be invoked in a single key
stroke (without the need for any other keys).
e. There shall be at least twelve (12) user-definable function keys.
f. Function key operation shall be capable of being redefined by Alt,
Ctrl and Shift Keys.
g. Shall have an automatic repeat function for all printable ASCII
characters, cursor controls and backspace functions.
h. A multikey rollover function shall be included (i.e., when more than
one key is depressed simultaneously, the effective key is the last
one depressed).
C.4.3.7 Carrying Case
Shall include a carrying case for transporting of the entire system;
padded nylon, zipper, carry hand or shoulder, external compartments,
internal compartments. Be able to contain the following; laptop, AC
adapter and cord, (ten) 10 diskettes, documentation, extra battery and
pointing device.
C.4.3.8 Battery
a. Shall be equipped with a nickel-metal-hydride (NiMH) battery power
supply with a rated life of at least three hours without the need
for recharging. The battery shall be located such that the user has
easy access to it for replacement. The laptop shall have the
capability to swap batteries while using the laptop, without
shutting off the power, and without loss of data in memory ("hot
swap" feature).
b. Each laptop computer shall be supplied with a spare battery and a
spare battery charger/AC adapter to allow charging of the spare
while the computer is in use.
c. Shall be equipped with an LED to indicate low battery power.
d. Battery shall fully recharge from a charge of
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less than fifteen (15) percent, in two (2) hours or less, under the
following conditions: in the laptop while in use; in the laptop
while not in use; and in the spare battery charger.
C.4.3.9 Laptop Pointing Device
Each laptop computer shall be equipped with a pointing device that meets
the following specifications:
a. The pointing device shall be of the stationary type. It shall be
center-mounted, or mountable on both the left and right side of the
keyboard.
b. The pointing device shall attach to the system without blocking the
diskette drive or the display controls.
c. Pointing device shall have a drag-lock feature that toggles the
button on and off.
d. Pointing device shall connect to the laptop through a dedicated
mouse port.
e. Shall have a resolution with a programmable range of at least 150
dots per inch.
f. Shall have a minimum of two (2) buttons and a maximum of three (3).
g. Shall be capable of using the mouse drivers supplied with the most
recent version of MS-D0S, OS/2, and Windows.
h. The driver shall support ballistic tracking.
1. Shall support the following applications software at a minimum:
o All of the software provided under this contract;
o Microsoft Windows 3.1 or the most current version;
o WordPerfect 5.0 and 5.1 or the most current version; and
o Lotus 1-2-3 2.3 or the most current version.
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j. Documentation
Each laptop computer shall come with a complete set of
documentation. All manuals shall be original and phototypeset.
Manuals shall be the same quality as those provided by manufacturer
to its commercial customers.
C.4.3.l0 Modem
Shall include an internal asynchronous fax modem that operates at least
9,600 (V.32, data compression and error checking) bits per second both
data and fax mode and is fully compatible with the Hayes command set.
Modem shall meet all FCC specifications for attachment in the public
switch to a telephone network.
C.4.4 Operating System
Each workstation and laptop computer shall be provided with operating
system software. The software proposed shall be the latest release of the
package as of the closing date of the RFP.
(1) Compatibility
The software shall operate fully on the workstation and the laptop
computer and not preclude the execution of any other software
ordered on this contract.
(2) Disk Operating System
An operating system shall be provided that recognizes and executes
the same command set and functions in a manner identical to the most
recent version of MS-DOS (currently version 6.0) as published by
Microsoft Corp.
(3) Utilities
Utilities equivalent to those included with MS-DOS 6.0 shall be
provided. These utilities shall include a virtual disk driver to
emulate a disk drive in RAM (VDISK), a printer spooler to expedite
printing operations (PRINT), an extended memory manager (HIMEM), an
expanded memory emulator (EMM386), a disk caching program
(SMARTDRV), and
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MORE, SORT and FIND filters, disk compression/decompression
utilities and virus scan utility capable of detecting and
eradicating the latest known viruses.
(4) High Memory Loadable
The operating system shall provide the capability of loading device
driver software and resident programs into the upper memory area.
(5) Hardware Compatible
All features and functions of the operating system shall be fully
supported by the hardware.
(6) Documentation
Each copy of the operating system shall come with a complete set of
documentation. All manuals shall be original and phototypeset.
Manuals shall be the same quality as those provided by the
manufacturer to its commercial customers. Original disks should also
be provided with the documentation. Manuals/documentation shall be
priced separately.
C.4.5 Diagnostic Utility
Each workstation and laptop computer shall be provided with diagnostic
utility software. The software proposed shall be the latest release of the
package as of the closing date in the RFP.
(1) Compatibility
The software shall operate fully on the workstation and the laptop
computer and not preclude the execution of any other software
ordered on this contract.
(2) Configuration Table Report
Shall be able to report on the configuration table of the system,
including:
o hardware interrupts;
o I/O addresses of all components;
o DMA addresses; and
o memory location of drivers, etc.
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(3) Communications Ports Test
Shall be able to test serial and parallel ports.
(4) Locate Failed RAM
Shall be able to test and specifically identify and locate failed
RAM chips.
(5) Video Test
Shall be able to test the video adapter.
(6) Hard Drive Test
The hard drive test should include both a logical test (FAT
integrity, etc.) and a physical test for media surface defects.
(7) Diskette Drive Test
Shall be able to test the 3.5 inch double and high density diskette
drives, and 5.25 inch double and high density diskette drives.
(8) Keyboard Test
Shall be able to evaluate keyboard performance.
(9) Virus Detection & Eradication
Shall include virus checking and eradication with the following
capabilities:
o monitors command and executable files;
o contains options to minimize RAM usage of monitoring software;
o checks MSDOS.SYS and IO.SYS;
o checks all command, executable and system files on the drives
specified by user;
o checks all RAM and high memory areas;
o checks for all common known viruses;
o displays message if virus detected; and
o removes virus from infected files.
(10) Documentation
Each copy of the diagnostic software shall come with a complete set
of documentation. All manuals
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shall be original and phototypeset. Manuals shall be the same
quality as those provided by the manufacturer to its commercial
customers. Manuals/documentation shall be priced separately.
C.5 MANDATORY OPTIONAL FEATURES
The term "Mandatory Optional Features" designates items the Government
will evaluate and may elect to include in full or in part in the contract.
Like Mandatory Specifications, items marked Mandatory Optional Features
are minimum specifications that must be met in order for the proposal to
be technically acceptable, i.e., Mandatory Optional Features must be
included in the proposal for it to be technically acceptable. The
Government reserves the right to unilaterally exercise any Mandatory
Optional Features at any time during the contract life at the contract
price listed in Section B. It is therefore required that offerors price
each option separately and honor those prices for the duration of the
contract. Delivery and/or implementation of all options shall be
accomplished by the contractor within 30 calendar days of the issuance of
the order exercising the option, or concurrent with system installation,
if the order is placed at date of award unless a different date is
specified on the order. Any date less than 30 days must be mutually agreed
to by both parties.
The Mandatory Optional Features are as follows:
(1) Network Interface Option
(2) 500 Megabytes Fixed Disk
(3) Super VGA Color Display (17")
(4) Word Processing Software
(5) Word Processing Software (LAN Version)
(6) Spreadsheet Software
(7) Spreadsheet (LAN Version)
(9) External CD-ROM Reader
(10) Color laptop computer
(11) Tower Workstation
(12) Workstations Memory Augmentation
C.5.1 Network Interface Option
The network interface option is the device enabling the connection to a
token ring network. The network interface option may be ordered configured
with a workstation. It shall be provided as either an installed card or
integrated with the system board. It shall meet the following
specifications:
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(1) Shall comply with the IEEE 802.5 Token Ring standard.
(2) Shall be capable of 4 megabits per second (Mbps) or both 4 Mbps and
16 Mbps LAN speeds, at the option of the user. Specific type of card
will be specified by the Government on the delivery order.
(3) Shall be capable of allowing a Locally Administered Address (LAA) to
be assigned (in the CONFIG. SYS file) while maintaining the IEEE
802.2 interface standard including the Logical Link Control (LLC).
The option shall have a Universally Administered Address (UAA),
specifically assigned to the manufacturer by the IEEE, burned into
the chip set.
(4) The option shall be compatible with the bus of the workstation
proposed response to section C of this contract.
(5) Shall provide access to the following devices:
o 4 Mbps option shall be 100 percent compatible with the IBM
Token Ring card; and
o 4/16 Mbps option shall be 100 percent compatible with the IBM
Token Ring card.
(6) Each network interface option shall include a cable that meets one
of the following 2 sets of specifications (as specified by the
Government on the delivery order) at the same price:
a. Adapter Cable
Eight (8) feet in length, made according to IBM Type 6
specification number 4716743, and terminating at one end with
a 9 position DB connector and at the opposite end with a 4
position Type A data connector compatible with IBM part number
8310574 (with strain relief);
or
b. Media Filter
Eight (8) feet in length, made according to Type 3 media
filter IBM specifications number 6466941, and consisting of 2
twisted pairs of copper wire terminated at one end with
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a 9 position DB connector and at the opposite end with a 4 pin
RJ-11 modular plug, with a low-pass filter in the DB
connector.
(7) The 4 Mbps option shall have at least l6KB of onboard memory. The
4/16 Mbps option shall have at least 64KB of onboard memory.
(8) The contractor shall provide any and all drivers and software
necessary to ensure operation with PC/MS-DOS 3.3, and all more
current versions and OS/2 2.1EE, or the most current versions,
operating systems. The contractor shall also provide the IBM LAN
Support Program or equivalent network application programs for the
following:
o IEEE 802.2 interface, and
o NETBIOS interface.
(9) Shall be able to generate any necessary drivers and software for
each of the following:
o Novell Netware 3.11 or at government's option, the most
current version;
o IBM LAN Server; and
o Open Datalink Interface (ODI).
(10) Any driver and memory resident software shall be able to be loaded
into the DOS upper memory area (above 640KB) by the operating system
or memory manager software proposed for this contract.
(11) Shall be configurable to hardware interrupt IRQ2 at a minimum.
(12) Documentation
Each network interface option shall come with a complete set of
documentation. All manuals shall be original and phototypeset.
Manuals shall be the same quality as those provided by the
manufacturer to its commercial customers. Manuals/documentation
shall be priced separately.
C.5.2 500 Megabytes Fixed Disk (Minimum Size)
The optional 500MB fixed disk shall be ordered configured with the
workstation. It shall include any adaptors, controllers, software, or
cables required for it to function in the workstation. It shall meet the
following
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specifications:
(1) Capacity
Shall have a minimum DOS-formatted capacity of 500MB, as validated
by the operating system FDISK utility (1MB = 1048576 bytes).
(2) Data transfer between the processor and the fixed disk shall be
through a 32-bit interface at a minimum.
(3) Sector Interleave
Shall allow and operate at maximum efficiency at a sector interleave
of 1-to-1.
(4) In-Use Indicator
Shall have a visible in-use indicator located on the front of the
system unit.
(5) Average Seek Time
Average seek time shall be 12 milliseconds or faster as validated by
the Norton Utilities, Version 7.0.
(6) Data Transfer Rate
Shall have a data transfer rate of at least 1MB per second, as
validated by the Norton Utilities, Version 7.0 or the most current
version.
(7) Mean Time Between Failure (MTBF)
Shall have a MTBF of at least 100,000 hours of use, as rated by the
manufacturer.
(8) Parking of Heads
Fixed disk read/write heads shall automatically "park" (i.e., move
to a position to avoid physical damage) and lock during normal
power-down of the system.
(9) The fixed disk shall have a shock mounted head disk assembly.
C.5.3 Super VGA Color Display (17")
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The optional 17" Super VGA display shall meet or exceed the following
specifications:
(1) In text mode, the video display shall have a minimum of 25 lines
with 80 characters per line, and shall display the 95 character
ASCII subset (decimal characters 32-126) and the IBM extended ASCII
character set (decimal characters 1-31 and 128-254).
(2) The video display shall be a high resolution color graphic display
generating a 1024x768 or greater matrix of picture elements
(pixels).
(3) The video display shall support and generate at least 256 colors at
a time at a resolution of 786,432 or greater pixels.
(4) The video display shall have a dot pitch of no more than .28
millimeters or an aperture grille pitch (for Trinitron tube) of no
more than .25 millimeters. The video display shall have a refresh
rate of 72 hertz or faster.
(5) The video display shall have a cathode ray tube (CRT) with a minimum
diagonal size of 17 inches. The viewable portion of the screen shall
measure a minimum of 15.5 inches on the diagonal.
(6) The video display shall have operator adjustable screen lighting
intensity and contrast control features, a power on/off switch,
vertical and horizontal positioning adjustment, and a power
indicator light. These controls shall be located on the front of the
video display, and shall not extend beyond the face of the video
display.
(7) The video display shall have a non-glare viewing surface without the
need for an overlay shield.
(8) The video display shall limit electromagnetic fields (EMF). The
video display shall meet the Swedish MPR-II specification.
(9) The video display shall have a tilt and swivel base.
(10) The video display shall be compatible with all of the following
display adapter modes of operation:
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o IBM Enhanced Graphics Adapter (EGA);
o IBM Video Graphics Array (VGA - 640x480;
o Video Electronics Standards Associations (VESA) Super VGA
(SVGA) - 1024x768.
(11) The video display shall operate in a non-interlaced mode in SVGA
(1024x768) mode.
(12) Documentation
Each video display system shall come with a complete set of
documentation. All manuals shall be original and phototypeset.
Manuals shall be the same quality as those provided by the
manufacturer to its commercial customers.
C.5.4 Word Processing Software
Wordperfect from Wordperfect Corporation has been established as an agency
standard at HCFA. It shall meet the following specifications.
(1) At the government's option, the contractor shall provide WordPerfect
5.1 or a more current DOS, Windows, or OS/2 version. The project
officer will indicate which version of the software is to be
supplied.
(2) Each copy of WordPerfect shall be complete with all of the functions
and features that are included in the packaging of the software for
commercial customers.
(3) At the government's option, an original copy of the corresponding
WordPerfect manual shall be provided. The manual shall be priced
separately.
(4) Each copy of WordPerfect shall be provided with a WordPerfect 5.1 or
current template suitable for the workstation keyboards. The
template shall be of a quality comparable to that provided to
commercial WordPerfect customers.
(5) Each copy of WordPerfect shall be provided with a copy of the
tutorial for that version.
(6) Each copy of WordPerfect shall be provided with the most recent
version of printer drivers for the laser printer provided under this
contract, the Hewlett-Packard LaserJet Series II, and the IBM
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Laser Printer model 4019. The specified printer drivers shall be
loaded on the workstations, and printer driver media diskettes
(3.5") shall be provided with the software.
C.5.5 Word Processing Software (LAN Version)
Wordperfect from Wordperfect Corporation has been established as an agency
standard at HCFA. Wordperfect 5.1 (LAN version) or a more current LAN
version, if it exists, may be ordered configured with a workstation. The
project officer will indicate which version of software is to be supplied.
It shall meet the following specifications:
(1) At the government's option, the contractor shall provide Wordperfect
software for operation on both the file server and user workstation.
This software shall be provided as five-user licenses, twenty-user
licenses, and one hundred-user licenses. Each of these options shall
be priced separately.
(2) Each copy of Wordperfect shall be complete with all of the functions
and features that are included in the commercial packaging of the
software for commercial customers.
(3) At the government's option, the contractor shall provide original
copy(s) of the Wordperfect manual corresponding to the version of
Wordperfect software provided. The manual shall be priced
separately.
(4) Each of the user licenses shall be provided with an original copy of
the Wordperfect quick reference guide corresponding to the version
of software provided. The quick reference card shall be of a quality
comparable to that provided to commercial Wordperfect customers.
(5) Each of the required five concurrent users shall have access to the
Wordperfect tutorial corresponding to the version of software
provided.
(6) Each copy of WordPerfect shall be provided with the most recent
version of printer drivers for the laser printer provided under this
contract, the Hewlett-Packard LaserJet Series II, and the IBM Laser
Printer model 4019.
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C.5.6 Spreadsheet Software
Lotus 1-2-3 from Lotus Development corporation has been established as a
HCFA standard. Lotus 1-2-3 may be ordered configured with a workstation.
The project officer will indicate which version of software is to be
supplied. It shall meet the following specifications:
(1) For each order, the contractor shall provide Lotus 1-2-3 version 2.4
or the most current DOS, Windows, or OS/2 version, at the
government's option.
(2) Each copy of Lotus 1-2-3 shall be complete with all of the functions
and features that are included in the commercial packing of the
software for commercial customers.
(3) At the government's option, an original copy of the corresponding
Lotus 1-2-3 manual shall be provided. The manual shall be priced
separately.
(4) Each copy of Lotus 1-2-3 shall be provided with an original copy of
the 1-2-3 quick reference guide corresponding to the version of
software provided. The quick reference card shall be of a quality
comparable to that provided to commercial Lotus 1-2-3 customers.
(5) Each copy of Lotus 1-2-3 shall be provided with a copy of Lotus
1-2-3 tutorial corresponding to the version of software provided.
C.5.7 Spreadsheet (LAN Version)
Lotus 1-2-3 from Lotus Development Corporation has been established as an
agency standard at HCFA. Lotus 1-2-3 (LAN version) or a more current
version, if it exists, shall be ordered configured with a workstation. The
project officer will indicate which version of software is to be supplied.
It shall meet the following specifications:
(1) At the government's option, the contractor shall provide Lotus 1-2-3
software for operation on both the file server and user workstation.
This software shall be provided as five-user licenses, twenty-user
licenses, and one hundred-user licenses. Each of these options shall
be priced separately.
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(2) Each copy of Lotus 1-2-3 shall be complete with all of the functions
and features that are included in the commercial packaging of the
software for commercial customers.
(3) At the government's option, the contractor shall provide original
copy(s) of the Lotus 1-2-3 manual corresponding to the version of
Lotus 1-2-3 software provided. The manual shall be priced
separately.
(4) Each of the required five concurrent users shall be provided with an
original copy of the Lotus 1-2-3 quick reference guide corresponding
to the version of software provided. The quick reference card shall
be of a quality comparable to that provided to commercial Lotus
1-2-3 customers.
(5) Each of the required five concurrent users shall have access to the
Lotus 1-2-3 tutorial corresponding to the version of software
provided.
C.5.8 External CD-ROM Reader & Interface Kit
The contractor shall separately price ISA and Micro Channel Architecture
(MCA) Compact Disk Read Only Memory (CD-ROM) reader and interface kit
configurations. Each configuration shall meet the following requirements:
(1) It shall be hardware-compatible with an IBM PC/AT, IBM PS/2 and 100
percent compatible PCs.
(2) Each interface kit shall include cables, interface card, power
cords, Microsoft extension software drivers, installation software,
and SCSI terminator. The adapter shall be capable of operating at
any of a minimum of four different memory-mapped addresses. The
adapter shall have changeable device interrupts for network
installations and shall be operable simultaneously with the network
interface option (Section C.5.1) without using the interrupt IRQ5
for the CD-ROM.
(3) The SCSI cable connecting the adapter to the reader shall be
shielded. It shall be a minimum of three feet in length and a
maximum of six feet in length.
(4) Each CD-ROM shall come with a complete set of documentation for both
the reader and the adapter. All manuals shall be original and
phototypeset.
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Manuals shall be the same quality as those provided by the manufacturer to
its commercial customers.
(5) Shall be International Standards Organization (ISO) 9660 compatible.
It shall read 5-1/4" compact disks with a capacity of 680MB.
(6) Shall support the Multimedia Personal Computer (MPC) standard.
(7) Shall support the CD-ROM Extended Architecture (XA) standard.
(8) Shall have a 3OOKB per second data transfer rate or faster and an
average access time of 280 milliseconds or faster.
(9) Shall have an audio interface for a headphone and RCA, pinout
Left/Right.
(10) Shall have at least 256K memory buffer on the adapter.
(11) Shall use a standard data cartridge (caddy), that shall be included
with the reader.
(12) All required driver and memory resident software shall be able to be
loaded into the DOS upper memory area (above 640KB) by the operating
system or memory manager software proposed for this contract.
(13) The CD-ROM reader shall be capable of full functionality in a
horizontal or vertical position.
C.5.9 Color Laptop Computer
The contractor shall offer a color display version of the laptop computer.
It shall meet all specifications for the laptop computer (Section C.4.3),
with the exception of the video display and adapter. Additionally, it
shall meet the following specification:
C.5.9.1 Color Displav
The color laptop shall include a thin film transistor, liquid crystal
display, active matrix VGA video display. The display shall have a minimum
diagonal viewing area of nine (9) inches.
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C.5.9.2 Display Adapter
The color display adapter shall be a VESA local bus device with a minimum
of 1MB of dual-ported video RAM. It shall be capable of displaying 256
colors.
C.5.l0 Tower Workstation
The contractor shall offer a tower version of the workstation. It shall
meet all specifications for the desktop workstation (Section C.4.1), with
the exception of case dimensions and the number of expansion bays and
slots. Additionally, it shall meet the following specifications:
C.5.l0.1 Case
The case for the tower system shall not exceed any of the following
external dimensions:
o 27 inches high,
o 9 inches wide, and
o 21 inches deep.
It shall include a pedestal base for stability.
C.5.l0.2 Expansion Bays
After the workstation has been configured, the system unit chassis shall
have at least three half-height bays available for addition of disk drives
or other devices. The unused expansion bays shall be externally accessible
with a cover over the opening if no other devices are included.
C.5.l0.3 Expansion Slots
After the workstations have been configured, the peripheral bus shall have
at least six (6) unused slots for future expansion. All of the unused
slots shall accommodate full-size printed circuit boards designed for the
bus provided. At least one of the unused slots shall be VESA local bus
capable.
C.5.ll Workstation Memory Augmentation
Eight megabyte (8MB) memory upgrades may be ordered configured with a
workstation or ordered separately as an addition to an already delivered
workstation's memory. The following specifications shall be met:
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8MB Additional Capacity
Shall provide an additional 8MB RAM for the workstation, in the same
configuration and to the same specifications as the original 8MB of
RAM (see Section C.4.1.5).
C.6 MANDATORY OPTIONAL SOFTWARE/EQUIPMENT FOR DISABLED ACCESSIBILITY
The term "Mandatory Optional Software/Equipment for Disabled
Accessibility" designates items the Government will evaluate and may
elect, to include in full or in part, in the contract. Like Mandatory
Specifications, items marked Mandatory Optional Software/Equipment for
Disabled Accessibility are minimum specifications that must be met in
order for the proposal to be technically acceptable, i.e., Mandatory
Optional Software/Equipment for Disabled Accessibility must be included in
the proposal for it to be technically acceptable. The Government reserves
the right to unilaterally exercise any Mandatory Optional
Software/Equipment for Disabled Accessibility at any time during the
contract period at the contract price listed in Section B. It is therefore
required that offerors price each option separately and honor those prices
for the duration of the contract. Delivery and/or implementation of all
options shall be accomplished by the contractor within 30 calendar days of
the issuance of the order exercising the option, or concurrent with system
installation if the order is placed at date of award unless a different
date is specified on the order. Any date less than 30 days must be
mutually agreed to by both parties.
C.6.l FUNCTIONAL SPECIFICATIONS
These specifications are organized by functional requirement into three
categories: input, output and documentation. This organization reflects
the major areas that need to be considered during planning and
acquisition. The capabilities set forth in these specifications are
currently available from industry in various degrees of functional
adequacy, except for access to screen memory for translating bit-mapped
graphic images.
C.6.l.1 Input Alternatives
Access problems concerning the input interface to a microcomputer differ
according to the type and severity of an employee's functional limitation.
Some users with disabilities are capable of using a keyboard, if it can
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be modified slightly. Others require an alternative input strategy. The
following is an overview of common input alternatives and other input
functional requirements that should be considered:
a. Multiple Simultaneous Operation.
Microcomputers have many commonly used functions that require
simultaneous striking of multiple keys or buttons. Sequential
activation control provides an alternative method of operation by
enabling a user to depress keys or buttons one at a time to execute
the same function.
b. Input Redundancy
Some programs require a "mouse" or other fine motor control device
for input. Some users with motor disabilities cannot operate these
devices. An input redundancy feature permits the functions of these
devices to be performed by the keyboard or other suitable
alternative such as voice input.
c. Alternative Input Devices
The capability to connect an alternative input device can be made
available to a user who is not able to use a modified standard
keyboard. This feature supplements the keyboard and any other
standard input system used. The alternative input capability
consists of a port (serial, parallel, etc.) or connection capability
allowing an accommodation aid to be connected to the system to
augment or replace the keyboard. For example, an alternative input
device, such as a switch, eye scan, or headtracking system, may be
customized to provide the most effective method of input for a user
while supporting transparent hardware emulation for standard input
devices, such as the keyboard and the mouse.
d. Key Repeat
A typical microcomputer generates repetitions of a character if the
key for that character remains depressed. This is a problem for
users without sufficient motor control. A key repeat
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feature can give a user control over the repeat start time and rate
by allowing the timing parameters to be extended or the repeat
function to be turned off.
e. Toggle Key Status Control
Microcomputer toggle keys provide visual indications of whether they
are on or off. A toggle key status feature provides an alternative,
non-visual means of showing the on or off status of a toggle key.
f. Keyboard Orientation Aids
To orient a visually impaired user to a particular keyboard, a set
of tactile overlays should be available to identify the most
important keys. The tactile overlays can be in the form of keycap
replacements or transparent sticky tape with unique symbols to
identify the various keys.
g. Keyguards
To assist a motor-disabled user, a keyguard should be available to
stabilize movements and help ensure that the correct keys are
depressed. A keyguard is a keyboard template with holes
corresponding to the location of the keys.
C.6.l.2 0utput Alternatives
Some users with disabilities need an alternative output to be able to
functionally use FIP resources. The following is an overview of common
output alternatives, and other output functional requirements, that should
be considered:
a. Auditory Output
The auditory output capability on current microcomputers is
sufficient to beep and play music. However, some users with
disabilities may require a speech capability. A speech synthesizer
is required to generate speech on today's computers. The capability
to support a speech synthesizer should continue to be available in
future generations of computers,
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or this capability may be internalized through an upgrade of the
computer's internal speaker. The speech capability should include
user-adjustable volume control and a headset jack.
b. Information Redundancy
Currently, several programs activate a speaker on the microcomputer
to provide information to the user. Some programs do not have the
capability to present this information visually to the
hearing-impaired user. An information redundancy feature presents a
visual equivalent of the auditory information provided.
c. Video Display
The requirement to enhance text size, reproduce text orally or in
braille, or modify display characteristics is crucial for some users
with visual disabilities. To ensure that this access continues, the
following capabilities are required:
(1) Large Print Display
There should be a means for enlarging a portion of the screen
for a low-vision user. This process uses a window or similar
mechanism allowing magnification to be controlled by a user. A
user can invoke the large-print display capability from the
keyboard or control pad for use in conjunction with any
work-related applications software. If applications software
includes graphics, enlargement of graphic displays should also
be available.
(2) Access to Visually Displayed Information
The capability to access the screen is necessary to support
the speech or braille output requirement of many blind users.
Currently, blind users are able to select and review the
spoken or braille equivalent of text from any portion of the
screen while using standard applications software. Third-party
vendors should have access to the screen contents in a manner
that can be
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translated and directed to any internal speech chip, a speech
synthesizer on a serial or parallel port, or a braille display
device. Information presented pictorially also needs to be
available in such a manner that, as software sophistication
improves, it may eventually be translated using alternative
display systems.
(3) Color Presentation
When colors must be distinguished in order to understand
information on the display, color-blind end users should be
provided with a means of selecting the colors to be displayed.
C.6.l.3 Documentation
Access to documentation for computer technology in a usable format should
be provided for Federal employees with disabilities. Braille, large print,
or ASCII disk equivalents of standard manuals are options to be
considered.
C. 7 INSTALLATION/DELIVERY
C. 7.1 Miscellaneous
(1) Orders for equipment under this contract shall be placed as follows:
a. System orders are comprised of a workstation or laptop
computer in addition to some number of accessories.
b. Accessory orders shall be configured with a workstation or
laptop computer.
c. Standalone orders for laser printers or external CD-ROM
readers and adapters may be placed independent of workstation
or laptop computers.
(2) Orders shall be shipped or delivered to the site specified by the
Government and installed by the contractor.
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(3) The contractor shall ship the workstation configurations to the
appropriate sites with all boards installed in the system units and
all software loaded and operational on the fixed disk. Workstations
shall be packed as specified in Section C-4(b)(3). The contractor
shall unpack, set up, and test equipment at the specified locations
unless the project officer specifies otherwise for specific
deliveries. The contractor shall remove all packing material and
boxes within 24 hours of set-up.
(4) The contractor shall provide all necessary cables and connectors for
the system to perform. The minimum length shall be as specified in
the table below:
Cable Minimum Length
----- ---------------
system unit power 6 feet
keyboard 7 feet (extended)
printer power 6 feet
printer interface 10 feet
video display power 6 feet
video display interface 6 feet
surge suppressor 6 feet
CD-ROM interface 3 feet
network interface 8 feet
(5) Each video display, system unit, laser printer, keyboard, laptop PC,
and CD-ROM reader shall be delivered with the model and serial
number of the item printed on a non-removable label not to exceed
one-half inch high and two inches wide, and to be at a minimum 6
mils thick. This label shall also include a bar-coded representation
of the serial number, using the Symbology Code 39 bar-coding
standard. The project officer shall specify the location of the
labels on each type of equipment following award of the contract.
(6) For each system delivered to HCFA, the contractor shall provide the
project officer with a configuration worksheet specifying the
manufacturer's make/model/part number, and serial number of the
chassis, fixed disk drive, all adapter boards, system board, video
display, keyboard, and accessories. In addition, the worksheet shall
include all hardware interrupts, switch settings, direct memory
access (DMA) channels, and memory addresses of installed
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devices, where appropriate. This worksheet shall be provided to the
government in an electronic and hard copy format to be specified by
the project officer after award of the contract.
C.7.2 System Assembly and Burn-in Procedures
C.7.2.l Hardware Burn-in
The contractor shall assemble and burn-in each system prior to shipment
according to the following procedure:
a. The system hard disk shall be initialized with a sector interleave
of 1-to-1.
b. The contractor shall install all necessary boards (graphics adapter,
etc.) and cables. This includes boards and cables required for
orderable accessory items.
c. The fixed disk shall be partitioned as specified by the Government,
formatted with the operating system and operationally configured.
d. The system diagnostics shall be run continuously for at least 24
hours on all components of the system, configured as specified by
the government, and all detected errors shall be corrected prior to
shipment.
e. The maximum allowable tolerance for "bytes in bad sectors" (from DOS
CHKDSK command) for each system fixed drive delivered shall be no
more than 0.1 percent (one-tenth of one percent) of the total
formatted capacity of the fixed drive.
C.7.2.2 Software Loading
The contractor shall partition and format the fixed disk and install the
operating system as specified by the government.
The contractor shall configure and install CONFIG.SYS and AUTOEXEC.BAT
appropriate to the specified configuration. The contractor shall configure
and load the CONFIG.SYS and AUTOEXEC.BAT files for optimal memory usage,
i.e., allowing the largest amount of conventional memory for application
programs.
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The contractor shall install application software purchased under this
contract as specified by the government
The contractor shall install application software owned by the government
but not purchased under this contract as specified by the government.
Each software application shall be installed in a separately named
directory, as specified by the government.
The contractor shall install and enable all hardware and application
device drivers for hardware and software installed by the contractor.
The contractor shall configure each application as specified by the
government. This shall include, but not be limited to, such functions as
screen color, printer selection, and default directories.
The contractor shall provide the project officer copies of the standard
load disks used to configure workstations provided under this contract.
The government reserves the right to review the standard fixed disk
configurations and specify changes.
Disk organization and application configuration specifications shall be
provided by the government in writing prior to placing an order.
The government shall provide the contractor with copies of
government-licensed or government-developed application software to be
loaded on the fixed disk using mutually agreeable media. The Government
shall have the right to make changes to the configurations with a 15 day
written notice to the contractor. The delivery order(s) shall specify
which set of additional software is required on each workstation.
The contractor shall certify each workstation and laptop PC to be virus
free at the time of delivery to HCFA.
C.7.2.3 Installation Problems
The contractor shall take steps to minimize the number of deliveries that
will not include the correct hardware and/or software items. In the event
that any site receives an incomplete or incorrect configuration, the
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contractor shall provide the correct/required configuration by using one
of the following methods. The method selected shall be at the option of
the Government:
Making an on-site visit to make the configuration conform to the
configuration required by the delivery order,
or
Reshipping an entire new configuration,
or
Reshipping missing or incorrect items.
In all cases, the contractor shall provide the correct configuration
within five (5) working days of written notification by the Government
project officer that the delivered configuration was incorrect.
C.7.2.4 Site Visit
a. The Government shall be provided with the opportunity to inspect the
contractor's facility(s) for workstation assembly and burn-in and to
inspect the final design of the shipping parcels.
b. The Governmental reserves the right to make site visits to the
contractor's production facility(s) during the life of the contract.
C.7.3 Test Epuipment
At the government's option, the offeror shall provide to the government,
without charge, a fully configured test unit of all items offered. The
government shall have thirty days in which to test this equipment, after
which the offeror shall retrieve the test equipment at no cost to the
government.
C. 8 REMEDIAL MAINTENANCE
C.8.l On-Call Maintenance Services
(1) The contractor shall provide the Government with on-call maintenance
service on an on-site repair basis (i.e., contractor personnel
report to the site of the equipment for repair).
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(2) The contractor shall provide on-call maintenance services at the
fixed monthly charges shown in Section B of this contract during the
Principal Period of Maintenance (PPM), which is defined as Monday
through Friday, 8AM to 5PM local prevailing time, exclusive of
Federal holidays.
(3) On-call maintenance service shall be provided for equipment which
may be located in Washington, D.C. regional offices and regional
outstations of any of the locations set forth in Section B,
Attachment B1, Page B-11a. Maintenance shall be provided for
existing equipment not under warranty and devices that come off
warranty during the life of this contract. A list of equipment types
and approximate quantities is provided in Section B, Pages B-11a.
(4) The contractor shall provide remedial maintenance (labor and parts)
at the prices shown in Section B. Maintenance service shall not
include electrical work external to the equipment, furnishing
supplies, or adding or removing any devices not supplied by the
contractor. It shall not include repair of damage resulting from
accident, transportation between Government sites, neglect, misuse,
failure of electrical power, air-conditioning, or humidity control
or causes other than ordinary use.
C.8.2 Maintenance Coverage
(1) The government shall have the right to order maintenance on items
shown in Section B for periods of one (1) year or less at the
monthly rate specified in Section B.
(2) For equipment purchased under this contract, the effective date of
maintenance service shall not be prior to the expiration of the
three year warranty period prescribed in Section H-19.
(3) For equipment purchased under this contract during the three year
warranty period prescribed in Section H-19, the same level of
service as specified under this Section C-8 of the contract shall be
provided by the contractor.
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C.8.3 Remedial Maintenance
(1) Remedial maintenance shall be performed after notification from the
project officer or designated HCFA staff that hardware and/or
software is inoperative. The contractor shall provide to the
Government a single designated point of contact in the form of a
24-hour toll-free telephone number. The contractor shall make
arrangements to provide an answering service or other continuous
telephone coverage to permit the Government to make such contact
seven days a week. Refer to Section H-12.
(2) Calls for remedial maintenance shall be made by the project officer
whenever there is an equipment failure, including new devices that
fail upon installation.
(3) The ADP coordinators or their representatives for each of HCFA'S 10
regional offices and the regional outstations will contact the
vendor of services directly for remedial maintenance, including new
devices that fail upon installation.
(4) The contractor shall maintain facilities for receiving maintenance
calls such that Government waiting time (i.e., time spent by
Government employee waiting for contractor personnel to take
information about required maintenance) shall not exceed (5) five
minutes.
(5) The contractor shall contact the user within one hour from the time
of receipt of the notification of the equipment failure. The purpose
of this call is to provide the user contact, within a reasonable
time, with the contractor. The call also provides the contractor the
opportunity to speak with the user while the problem/failure is
fresh in the user's mind.
C.8.4 Return-To-Operation Time
(1) The contractor shall return the equipment to service within 24 hours
of oral notification (followed up by written notification) that
remedial maintenance is required, excluding weekends and Federal
holidays.
(2) A system shall be considered out of service if any item for which
the contractor is responsible for
C-58
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SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
maintenance is malfunctioning and the system cannot be used for all
of its intended functions.
(3) Equipment shall be considered returned to service when the
contractor has notified the HCFA Action Desk (for Baltimore or
Washington, D.C. repairs) or the ADP Coordinator (for regional
office repairs) of the successful completion of the repairs.
C.8.5 Responsibilities of the Contractor
(1) The contractor's responsibilities under maintenance shall include
the replacement of non-functioning batteries in workstations and
laptop computers, and repair/replacement of burned out or damaged
surge suppressors.
(2) Failed equipment shall be repaired or replaced at the option of the
contractor. If the contractor elects to replace a failed item, it
shall be replaced with identical equipment (i.e., identical make and
model) or comparable equipment subject to the approval of the
Government Project Officer.
(3) Only new standard parts shall be used in effecting repairs. If new
standard parts are no longer available, the Contractor may
substitute, subject to the Project Officer's written approval, parts
of at least equivalent function and quality. Parts which have been
replaced shall become the property of the contractor.
(4) Equipment repairs shall take place during the Principal Period of
Maintenance (see Section C.8.l.(2)) except by mutual agreement
between the contractor and the Government.
(5) The Government retains the right to interchange items (boards,
drives, video displays, printers, etc.) among the workstations
covered, with no penalty for so doing unless the equipment is
damaged. In such cases, the Government shall be responsible for any
damage caused by Government personnel while interchanging equipment.
(6) The contractor is required to service all equipment covered in this
contract. The Government retains the right to configure systems
included in this contract with components acquired from sources
outside of this contract. The contractor shall not
C-59
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SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
be responsible for maintenance of such components or any damage
caused by their addition to systems included in this contract unless
the component is covered by the maintenance provisions of this
contract.
(7) When it has been determined that a fixed disk is to be replaced, the
contractor shall provide the Government user an opportunity to
perform a fixed disk backup prior to removing the disk to be
replaced.
(8) When a fixed disk is replaced with a new unit by the contractor, the
contractor shall erase or otherwise destroy all data on the replaced
unit. The contractor shall be liable for unauthorized release of
data contained on replaced data storage devices.
(9) Contractor maintenance engineers shall use virus-free diagnostic
software when making repairs to ensure that a virus is not
introduced into the workstation during service. After maintenance is
performed on a system, the contractor shall run a virus check on the
system to ensure it is free from viruses.
(10) The contractor shall supply monthly report(s) of maintenance repairs
made by location of equipment. These reports shall include but not
be limited to the make, model, and serial number of equipment
repaired, date and time of failure and repair, the nature of the
repair, and whether the repair was made under warranty. The
format(s) and content of this report(s) shall be specified by the
project officer following award of the contract.
C.8.6 Maintenance Items
There shall be no additional charges to the Government for:
(1) Remedial maintenance, regardless of when the maintenance is
performed;
(2) Replacement parts, unless such parts are required due to the fault
or negligence of the Government;
(3) Time spent by maintenance personnel after arrival at the site
awaiting the arrival of additional
C-60
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SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
maintenance personnel and/or delivery of parts, tools,
accessories, and materials, after a service call has
commenced; and
(4) Any travel expenses, meals, lodging expense, parking expenses,
fares, or tolls for maintenance personnel.
(5) Time spent on return calls due to temporary inaccessibility of
equipment to be repaired.
C.9 FIELD-PROVEN EQUIPMENT AND SOFTWARE
Each item shall be off-the-shelf and field proven in Government or
commercial customer accounts that are financially independent from the
offeror or the offeror's subcontractors and are not test sites; shall be
in an ongoing, current production mode by the manufacturer(s) as of the
issue date of the RFP; and shall meet the following minimum requirements:
(a) Each component, including hardware and software, provided to meet
the Government's specifications shall have been in satisfactory use
by a minimum of 5 customers by the issue date of this RFP. This date
is shown on page A-1 under ISSUE DATE.
(b) The total minimum number of installed devices at the 5 or more
customers shall equal or exceed 200 of each item.
(c) A hardware or software item shall be considered field proven only
if:
(1) The make, model and version proposed meets the requirements of
Sections C.;
or
(2) The item proposed is a commercially available upgrade (as of
the closing date of the solicitation document) to an item that
meets the requirements of Sections C.
(d) The requirements of this section shall not apply to the mandatory
optional equipment for disabled accessibility.
C.l0 USE OF EXISTING FACILITIES
All equipment shall operate in a normal office environment using available
facilities as specified below.
C-61
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SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
(a) Available Power
120 Volt, 60 Cycle, 15 ampere maximum draw.
(b) Available Air Conditioning
Equipment shall operate within a temperature range of 60-85
degrees Fahrenheit (15.5-32.2 degrees Celsius), and 30 percent
through 80 percent relative humidity, non-condensing.
C.11 NEW EQUIPMENT
All equipment shall be new. Used or reconditioned equipment shall not be
accepted.
C.12 SOFTWARE SUPPORT
Should any of the software provided under the terms of this contract
contain defects for which the software manufacturer provides repair or
replacement to its customers free of charge, the contractor shall provide
said repair or replacement to the Government at no additional charge to
the Government.
Should the manufacturer of any software provided under the terms of this
contract upgrade the product with a new release, the Government shall,
whenever possible, have the option to
(a) require the latest release for subsequent deliveries or
(b) require no change in delivered software.
If the OEM of the software makes available updates, upgrades, new
releases, or new versions of their software at no additional cost, the
Contractor shall likewise deliver, at no charge, the updates, upgrades,
new release, or new version to all customers under this contract. If on
the other hand, the OEM of the software makes available updates, upgrades,
new releases or new versions of their software at an additional cost, the
Contractor shall submit an Engineering Change Proposal (ECP) as described
in Section H.16, "Engineering Changes."
C.13 TECHNOLOGY SUBSTITUTION
C.13.1 Overview
During the life of this contract, and under its terms and
conditions, the Government may request or the contractor may propose
technologically advanced equipment/software
C-62
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SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
and components:
o which become commercially available after this
contract's effective date;
o which become economically feasible to offer after this
contract's effective date; or
o which are proposed as replacements for equipment/
software/components which become commercially
unavailable after this contract's effective date.
These items may be added under the terms and conditions of this
clause.
C.13.2 Types of Substitutions
The substitutions covered by this clause shall be substituted for
items already listed in Section B. The substitutions may be in total
or in part.
It is further understood by the parties to this contract that this
clause envisions technological refreshment related to the general
type of equipment/software/component covered by the scope of this
contract. HCFA shall have the right to test proposed
equipment/software/component consistent with the provisions of
Section C.7.3, Test Equipment.
C.13.3 Minimum Qualifications For Acceptance of Substitutions
The Government is under no obligation to substitute or upgrade any
item already listed in the contract. However, subject to mutual
agreement, when items are added under this clause, that item or
items must meet the following criteria:
(1) Must provide an improved cost to performance ratio over the
most similar items in the contract;
(2) Be judged technically acceptable by the project Officer; and
(3) Be approved in writing by the Contracting Officer and the
Contractor through a bi-lateral modification to the contract.
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SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
C.13.4 Pricing of Substitutions
The pricing of these items shall be negotiated on a case by case
basis. Should the Government require an upgraded release of which
the manufacturer has altered the list price, the unit cost for that
item in this contract shall be subject to renegotiation.
C.13.5 Delivery of Substitutions
Notwithstanding the delivery requirements set forth in Section F,
delivery requirements for upgrade items shall be mutually agreed
upon by the parties to this contract at the time the substitution
item is added. The Contracting Officer shall have the right to set
the delivery schedule based on the longer of the standard commercial
delivery schedule of the items or the Contractor's standard delivery
schedule for similar items, if a mutually agreeable schedule cannot
be set.
C.13.6 Identification of Technologically Advanced Products
While the Government reserves the right to independently solicit a
proposal from the Contractor under the terms of this clause at any
time, potential substitutions will normally be brought to the
Government's attention by the contractor.
C.13.7 Technologically Advanced Products From Alternate Sources
The Government may also request that the Contractor propose to
provide as orderable items, technologically advanced
hardware/software/components under the conditions described in
Section C.13.l, Overview, components from sources other than the
Contractor. If the Government and the Contractor mutually agree for
the Contractor to make these items available as orderable items,
these items may be added under the terms and conditions of this
contract in accordance with this clause.
C.14 NON-EVALUATED OPTION
C.14.l EMPLOYEE PURCHASES
Under this contract, HCFA employees may purchase hardware, software
and perpherials. A Government Employee Acquisition Procedure (GEAP)
shall be established, detailing the purchase, delivery, maintenance,
warranty and employee payment procedures,
C-64
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SECTION C - DESCRIPTION/SPECIFICATION/WORK STATEMENT
etc., before any purchases are made. Acquisition procedures shall be
developed by the contractor and provided to the Government within 45
calendars days after contract award.
C-65
<PAGE>
SECTION D- PACKAGING AND MARKING
D.1 Packaging and Shipping
D.2 Packaging and Marking
D.3 Packing Lists
D-1
<PAGE>
SECTION D- PACKAGING AND MARKING
D.1 Packaging and Shipping
a. After successful completion of burn-in and software loading, the
system and/or items (including user manuals and supplies) shall be
repacked, using the original packing materials, for shipment to the
HCFA site. The system items' individual boxes shall be packaged for
shipment.
b. Shipment of a system or standalone order to each site shall be in a
single parcel. The parcel is defined as a single box or several
boxes that are banded or wrapped together. The parcel shall be
clearly labeled. The design of the parcel shall be such that it can
be moved easily through a standard 30"-wide, normal movement by
freight companies. The individual item boxes shall be packed in the
shipping parcel in such a way that they are stationary when the
shipping parcel is moved. Filler boxes should be used to fill space
in the shipping parcel.
c. Each shipping parcel shall have a shipping label placed externally
for easy viewing by the freight company and the user. The shipping
label shall contain the destination address (including room number),
user contact person and contact telephone.
d. A separate label placed under or above the shipping label shall
contain an internal HCFA identification number in characters which
are at least one (1) inch high for easy identification. The HCFA
identification number shall be provided by the Government in the
delivery order.
e. The contractor shall attach to the outside of the parcel an
inventory, listing every item (hardware and software) included in
the equipment order including serial numbers.
f. Equipment not packaged and shipped as required shall be subject to
refusal of delivery by the project officer.
g. Read-Me-First Document
Included in the system parcel shall be a "Read-Me-First" document
that shall be immediately recognizable and attached to the video
display. This document shall be desktop publishing quality. The
Government shall provide the contractor with a sample document to
use as a prototype, at the time of contract award. The contractor
D-2
<PAGE>
SECTION D- PACKAGING AND MARKING
shall provide the finished document in both hard copy and electronic
copy on the system fixed disk. The electronic copy shall be in
Wordperfect format. Included in this document shall be an acceptance
form to be filled out by the recipient. The form will be returned
via interoffice mail to the Government Project Officer.
h. The contractor shall provide with each equipment order three (3)
copies of a checklist of all equipment included in the shipment.
This will be used to report receipt/acceptance data to the
Government Project Officer. The checklist shall list each orderable
item shipped and its serial number, provide space for comments and
spaces for date of receipt and signature of the employee receiving
the order.
D.2 Packaging and Marking
a. Unless otherwise specified, all items shall be packaged and packed
in accordance with normal commercial practices. *
b. The Government shall furnish such labor as may be necessary for
packing unpacking, and placement of equipment when in the possession
of the Government (unless otherwise specified herein). Supervision
of packing, unpacking, and placement of equipment shall be furnished
by the Contractor without charge to the Government.
* NOTE: If magnetic media is involved, extra markings should be
considered for protection against exposure to magnetic fields or
temperature extremes.
D.3 Packing Lists
A packing list or other suitable shipping document shall accompany each
shipment and shall show the (a) name and address of consignor; (b) the
name and address of consignee; (c) Government contract (and delivery
order, if used ) number; (d) Government bill of lading number covering the
shipment, if any; and (e) description of the material shipped, including
item number, quantity, number of containers, and package number, if any.
D-3
<PAGE>
E.1 52.252-2 Clauses Incorporated by Reference. (JUN 1988)
E.2 Approvals by the Project Officer
E.3 Standard of Performance and Acceptance of system
E.4 Date of Acceptance
E.5 Delay of Start of Performance Period
E.6 Operational Capability Demonstration
<PAGE>
SECTION E - INSPECTION AND ACCEPTANCE
E.1 52.252-2 Clauses Incorporated by Reference (JUN 1988)
This contract incorporates one or more clauses by reference, with the same force
and effect as if they were given in full text. Upon request, the Contracting
Officer will make their full text available.
52.246-2 Inspection of Supplies - Fixed-Price JUL 1985
52.246-4 Inspection of Services - Fixed-Price FEB 1992
52.246-16 Responsibility for Supplies APR 1984
E.2 Approvals by the Project Officer
All items to be delivered to the Project Officer will be deemed to have been
approved 30 calendar days after date of delivery, except as otherwise specified
in this contract, if written approval or disapproval has not been given within
such period. The Project Officer's approval or revision to the items submitted
shall be within the general scope of work stated in this contract.
E.3 Standard of Performance and Acceptance of system
This clause establishes a standard of performance which must be met before any
equipment or software delivered under this contract is accepted by the
Government. This provision also includes replacement, substitute equipment, and
equipment which is added or field-modified (modification of equipment from one
model to another) after a successful performance period.
(a) Performance Period (For testing and acceptance)
The performance period shall begin on the day following installation
date, and shall end when the equipment has met the standard of
performance for a period of ten (10) consecutive (calendar) days by
operating in conformance with the Contractor's technical
specifications and functional descriptions, or as quoted in the
Contractor's proposal, which must satify the requirements of Section
C. at an effectiveness level of 90% or more.
E-2
<PAGE>
SECTION E - INSPECTION AND ACCEPTANCE
(b) Continuance of Performance Period
If the equipment does not meet the standard of performance during
the initial 10 consecutive (calendar) days, the performance period
may continue on a day-by-day basis until the standard of performance
is met for a total of 10 consecutive days.
(c) Failure to meet Standard of Performance
If the equipment fails to meet the standard of performance after 90
calendar days from the installation date or start of the performance
period, whichever is later, the Government may at its option request
a replacement or terminate the contract for default and request the
immediate removal of the equipment or software.
(d) Effectiveness Level Computations
The effectiveness level for an equipment is computed by dividing the
operation use time by the sum of the operational use time plus
system failure downtime.
(e) Changes in Equipment
The effectiveness level for equipment added, field-modified, or
substituted, or for replacement equipment is a percentage figure
determined by dividing the operational use time of the system by the
sum of the time plus downtime resulting from system failure of the
equipment/software being tested.
(f) Operational use time for Equipment
Operational use time for performance testing for an equipment is the
accumulated time during which the equipment is in actual operation.
(g) Operational Use Time For Equipment
Operational use time for performance testing for equipment added,
field-modified, or substituted, or for replacement equipment, is
defined as the accumulated time during which the equipment is in
actual use.
E-3
<PAGE>
SECTION E - INSPECTION AND ACCEPTANCE
(h) Equipment Failure Downtime
Equipment failure downtime is that period of time during which the
scheduled productive workload, or simulated workload, being used for
acceptance testing cannot be continued on the system due to
equipment failure. If simulated workload is being used, it must be
consistent with the requirements set forth elsewhere in the
contract.
(i) Equipment Failure Downtime
Equipment failure downtime for equipment added, field-modified, or
substituted, or for replacement equipment after the system has
completed a successful performance period is that period of time
when such equipment is inoperable due to its failure.
(j) Start of Downtime
Downtime for each incident shall start from the time the Government
reports (or makes a bona-fide attempt to contact the Contractor's
designated representative) the problem until the equipment is
returned to the Government in proper operating condition, exclusive
of actual travel time required by the Contractor's maintenance
personnel (but not in excess of 1 hour on each day such services
were requested) if equipment is removed from the Government's site.
However, at the request of the Contractor, the Government shall make
available not only the failed equipment/software, but also the
equipment/software which the Contractor must use to accomplish such
repairs.
(k) Equipment use during system downtime
During a period of equipment failure downtime, the Government may
use operable equipment when such action does not interfere with
maintenance of the inoperable equipment/software. The equipment will
be considered down during such periods of use. Whenever the operable
equipment is not released to the Contractor upon request, all such
usage periods shall be considered equipment operational use time in
computing the effectiveness level.
E-4
<PAGE>
SECTION E - INSPECTION AND ACCEPTANCE
(l) Minimum of Use Time
During the performance period for the equipment, a minimum of 48
hours of operational use time with scheduled productive or simulated
work will be required as a basis for computing the effectiveness
level. However, in computing the effectiveness level, the actual
number of operational use hours shall be used when that number
exceeds the minimum of 48 hours. Added equipment, field-modified
equipment, and substitute equipment are subject to the 48 hour
minimum use time requirement. However, the Government shall accept
such equipment without the addition of simulated work solely to
achieve the minimum of 48 hours use time, provided the average
effectiveness for the day acceptance period is equal to or better
than the level specified in the paragraph entitled "Performance
Period".
(m) Measure of Operational Use Time
Operational use time and downtime shall be measured in hours and
whole minutes.
E.4 Date of Acceptance
Upon successful completion of the 10-day performance test period, the Government
will provide the contractor with written notice of acceptance, identifying the
actual date of acceptance and retroactively establishing the first day of the
successful 10-day performance period.
E.5 Delay of Start of Performance Period
If necessary, the Government may delay the start of the performance period, but
such a delay shall not exceed 10 consecutive days. Should the Government delay
the start of the performance period, rental and/or maintenance charges shall
accrue for that period of time between the installation date and the start of
the performance period and shall be paid only upon completion of the successful
performance period.
E-5
<PAGE>
SECTION F - DELIVERIES OR PERFORMANCE
F.1 Period of Performance
F.2 Delivery
F.3 Notice of Listing of Contract Clauses Incorporated By Reference
F.4 Required Reports
F.5 Variation in Quantity (FAR 52.212-9) (APR 1984)
F.6 Installation Requirements and Options
F.7 Waiver of Delivery Schedule
F.8 Notice of Shipment
F-1
<PAGE>
SECTION F - DELIVERIES OR PERFORMANCE
F.1 Period of Performance
The period of performance for completion of all work under this contract shall
be from the date of contract award through twelve months thereafter with two
additional twelve (12) month options.
F.2 Delivery
All items shall be delivery within 30 days from the date of the delivery order
unless a later delivery date is specified on the delivery order. In no case
shall the contractor be required to deliver an item in less than 30 days without
the mutual agreement of both parties.
F.3 Notice of Listing of Contract Clauses Incorporated By Reference
NOTICE: The following solicitation and/or contract clauses pertinent to this
section are hereby incorporated by reference:
FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1)
NUMBER DATE TITLE
52.212-13 AUG 89 STOP-WORK ORDER
52.212-15 APR 84 GOVERNMENT DELAY OF WORK
52.247-34 APR 84 F.O.B. DESTINATION
52.247-55 APR 84 F.O.B. POINT FOR DELIVERY OF
GOVERNMENT-FURNISHED PROPERTY
F.4 Required Reports
The Contractor shall furnish the following reports.
a. Monthly Progress Report
The Contractor shall submit one copy to the Contracting Officer and
the Project Officer of a monthly progress report briefly stating the
progress made, including percent completion of the contract as of
the end of the reporting period. Specific areas of interest shall
include difficulties encountered during the reporting period and
remedial action taken and a statement of activity anticipated during
the subsequent reporting period. The report shall also include any
proposed changes of key personnel concerned with the contract
effort. The monthly progress reports shall be submitted on or before
the fifteenth day of each month, following the first complete month
of contract performance.
F-2
<PAGE>
SECTION F - DELIVERIES OR PERFORMANCE
b. Draft Final Report
(1) The Contractor shall submit to the Project Officer two (2)
copies of the draft final report within forty-five (45) days
prior to the completion of the period of performance set forth
under Section F, "Deliveries or Performance." The Contractor
shall furnish to the Contracting Officer a copy of the letter
transmitting the draft to the Project Officer.
(2) The Government will review and return each submission of the
Draft Final Report indicating approval or disapproval, and
comments, if necessary, within fifteen (15) calendar days. In
the event the Government delays review and return of any
submission of the Draft Final Report beyond the period
specified, the Contractor shall immediately notify the
Contracting Officer in writing and the Contractor will be
entitled to a day-for-day extension in submission of the
approved Final Report(s). The Draft Final Report shall be
typed double spaced or space-and-a-half and shall include all
illustrations, tables, drawings, charts, data sheets, and
other pertinent material required for an approved Final
Report.
c. Delivery Reports
For each delivery order, the contractor shall provide to the
Government Project Officer documentation that the equipment
(hardware and/or software) has been delivered or shipped. This
document shall contain at a minimum, the internal HCFA
identification number (taken from the delivery order), the delivery
location, the manufacturer, description and serial number of each
item (hardware and software), and the date the equipment was
shipped or delivered. The contractor shall provide a sample of this
reporting mechanism in their proposal. The required information
shall be in a PC database format as approved by the Government
Project Officer prior to contract award. The information shall be
transmitted to the Government Project Officer using a mutually
agreed upon medium (e.g. electronic mail, diskette) within 15
calendar days of the delivery date of the equipment. The Government
shall provide within 15 calendar days of contract award the required
data format, standardized coding requirements and standardized
equipment descriptions.
F- 3
<PAGE>
SECTION F - DELIVERIES OR PERFORMANCE
All deliveries, shall be made to the building and room location
specified in the delivery order (inside delivery). Equipment shall
be shipped to HCFA headquarters in Baltimore, Maryland; Washington,
D.C.; 10 regional offices; and regional office outstations as listed
in Section J.
F.5 Variation in Quantity (FAR 52.212-9) (APR 1984)
(a) A variation in the quantity of any item called for by this contract
will not be accepted unless the variation has been caused by
conditions of loading, shipping, or packing, or allowances in
manufacturing processes, and then only to the extent, if any,
specified in paragraph (b) below.
(b) The permissible variation shall be limited to:
10 percent increase
10 percent decrease
This increase or decrease shall apply to Tables B-2 through B-4.
F.6 Installation Requirements and Options
(a) The Contractor shall install the equipment/software, as specified in
Section C (or any attachment referenced therein), ready for use, in
accordance with the installation schedule specified in the delivery
order.
(b) The Government reserves the right to delay the installation by up to
10 calendar days, at no additional cost to the Government, provided
that:
(1) The Contractor shall receive written notice from the
Contracting Officer 5 calendar days prior to the scheduled
installation date or within 15 calendar days after issuance of
the delivery order, whichever is later, or to any date which
is mutually agreed to by the Government and the Contractor.
(2) Installation delays beyond 10 calendar days shall be mutually
agreed to by the Contractor and the Government.
(c) If the equipment is certified to be ready for use prior to the
installation date, the Government, at its option
F-4
<PAGE>
SECTION F - DELIVERIES OR PERFORMANCE
may elect to use the equipment and change the installation date
accordingly. In this event, the contract or delivery order shall be
so modified by the Government. The Government agrees to have the
site prepared in accordance with the Contractor's written site
specifications by the scheduled installation date.
(d) The Government shall provide the contractor with access to the site
for the purpose of installing the equipment prior to the scheduled
installation date. The Contractor shall specify in writing the time
required to install the equipment.
F.7 Waiver of Delivery Schedule
None of the following shall be regarded as an extension, waiver, or abandonment
of the delivery schedule or a waiver of the Government's right to terminate for
default: (i) delay by the Government in terminating for default; (ii) acceptance
of delinquent deliveries; and (iii) acceptance or approval of samples submitted
either after default in delivery or in sufficient time for the contractor to
meet the delivery schedule.
Any assistance rendered to the contractor on this contract or acceptance by the
Government of delinquent goods or services hereunder will be solely for the
purpose of mitigating damages and is not to be construed as an intention on the
part of the Government to condone any delinquency, or as a waiver of any rights
the Government may have under the subject contract.
F.8 Notice of Shipment
If specified in an order submitted under the contract, the Contractor shall, at
the time each shipment is made on such order, furnish a notice of shipment to
either the consignee or the Contracting Officer or both, as specified. This may
be done by completion and return of appropriate forms furnished by the
Contracting Officer or by the furnishing of copies of bills of lading, freight
bills, packing lists, invoices, or similar documents in accordance with normal
commercial practice if such document clearly identifies the order number, items
and quantities shipped, date of shipment, point of origin, method of shipment
and routing, and the name of initial carrier.
F-5
<PAGE>
SECTION G - CONTRACT ADMINISTRATION AND DATA
G.l Invoicing and Payment
G.2 Method of Payment
G.3 Government Project Officer
G.4 Contractor Project Director
G.5 Technical Direction
G.6 Modification Authority
G.7 Subcontract Consent
G.8 Use of Government Data (Reports/Files/Computer Tapes or Discs)
G.9 Data To be Delivered
G.10 Dissemination, Publication and Distribution of Information
G.11 Notification of Changes
G.12 Designation of Property Administrator
G.13 Project Officer
G.14 Key Personnel
G-1
<PAGE>
SECTION G - CONTRACT ADMINISTRATION AND DATA
G.1 Invoicing and Payment
a. Submission of Invoices and Payment Office
(1) invoices shall be prepared and submitted in quadruplicate
unless otherwise specified.
(2) To expedite payment, invoices shall be submitted as follows:
(a) Original and three (3) copies shall be submitted to the
address below:
Department of Health and Human Services
Health Care Financing Administration
OBA/OFM/Division of Accounting
P.O. Box 17255
Baltimore, Maryland 21203-7255
If overnight delivery is desired:
Department of Health and Human Services
Health Care Financing Administration
OBA/OFM/Division of Accounting
6325 Security Boulevard
Room 2-B-3 East Low Rise
Baltimore, Maryland 21207
(b) One (1) copy shall be sent to the Project Officer.
(c) Content of Invoice (If Applicable):
(i) Contractor's name and invoice date.
(ii) Contract number or other authorization for
delivery of property and/or services.
(iii) Description, cost or price and quantity of
property and/or services actually delivered or
rendered.
(iv) Shipping and payment terms.
(v) Other substantiating documentation or information
as required by the contract.
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SECTION G - CONTRACT ADMINISTRATION AND DATA
(vi) Name, title, phone number and complete mailing
address of responsible official to whom payment is
to be sent.
b. Invoice Payment
(1) Reimbursement for invoices submitted under this contract shall
be made not later than thirty (30) days after receipt of the
invoice from the contractor in the copies requested at the
paying office designated above.
(2) Payment will be authorized after the Division of Accounting
has audited the invoice in accordance with Federal
regulations. This audit includes certification of the invoice
by the Project Officer and verification that the invoice
amount is consistent with the payment schedule set forth under
Section B-[2], Price and Payment. Any discrepancies determined
as a result of the audit could delay the processing of the
invoice and may result in the invoice being returned to the
contractor for corrections. Inquiries relating to payments
should be directed to the Lead Accounting Technician,
Administrative Payments Unit, telephone number (301) 966-5427.
c.Interest on Overdue Payment
(3) The Prompt Payment Act, Public Law 97-177 (96 Stat. 85.31
U.S.C. 1801) is applicable to payments under this contract and
requires the payment of contractors of interest on overdue
payments and improperly taken discounts.
(4) Determinations of interest due will be made in accordance with
the provisions of the Prompt Payment Act and Office of
Management and Budget Circular A-125.
G.2 Method of Payment
a. Payment under this contract will be made by the Government by
electronic funds transfer through the Automated Clearing House
(ACH). For payment through ACH, see Attachment J-IV for the
appropriate payment information and financial institution.
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SECTION G - CONTRACT ADMINISTRATION AND DATA
b. In the event the Contractor, during the performance of this
contract, elects to designate a different financial institution for
the receipt of any payment made using electronic funds transfer
procedures; or a different method of payment, notification of such
change and the required information must be received by the
appropriate Government official 30 days prior to the date such
change is to become effective.
c. The documents furnishing the information must be dated and contain
the signature, title, and telephone number of the Contractor's
official authorized to provide it, as well as the Contractor's name
and contract number.
d. Any changes shall be furnished to HCFA, Division of Accounting,
Chief, Accounting Operations Branch, Room 2-B-3 East Low Rise
Building, 6325 Security Boulevard, Baltimore, Maryland 21207. It is
the Contractor's responsibility to furnish the changes promptly to
avoid payment to erroneous addresses or bank accounts, or delays in
payments otherwise properly due.
G.3 Government Project Officer
Tim Lawrence is hereby designated as the Project Officer. The Project Officer's
responsibilities shall include continuous monitoring of the Contractor's
compliance with all substantive project objectives.
G.4 Contractor Project Director
Jack Brennan will serve as Project Director. It will be his/her responsibility
to obtain the staff necessary and to direct the work for the conduct of this
project. The Government reserves the right to approve any necessary successor to
be designated as Project Director.
G.5 Technical Direction
a. Performance of the work under this contract shall be subject to the
technical direction of the Project Officer. The term "technical
direction" is defined to include, without limitation, the following:
(1) Directions to the Contractor which redirect the contract
effort, shift work emphasis between work areas or tasks,
require pursuit of certain lines of
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SECTION G - CONTRACT ADMINISTRATION AND DATA
inquiry, fill in details or otherwise serve to accomplish the
contractual statement of work.
(2) Provision of information to the Contractor which assists in
the interpretation of drawings, specifications, or technical
portions of the work description.
(3) Review and, where required by the contract, approval of
technical reports, drawings, specifications, and technical
information to be delivered by the Contractor to the
Government under the contract.
b. Technical direction must be within the general Scope of Work stated
in the contract. The Project Officer does not have the authority to
and may not issue any technical directions which:
(1) Constitutes an assignment of additional work outside the
general Scope of Work of the contract.
(2) Constitutes a change as defined in the contract clause
entitled "Changes - Cost Reimbursement."
(3) In any manner cause an increase or decrease in the total
estimated contract cost, fixed-fee, or the time required for
contract performance.
(4) Change any of the expressed terms, conditions, or
specifications of the contract.
c. All technical direction shall be issued in writing by the Project
Officer or shall be confirmed by him/her in writing within 5 working
days after issuance.
d. The Contractor shall proceed promptly with the performance of
technical direction duly issued by the Project Officer in the manner
prescribed by this article and within his/her authority under the
provisions of this article.
e. If, in the opinion of the Contractor, any instruction or direction
issued by the Project Officer is within one of the categories as
defined in (1) through (4) above, the Contractor shall not proceed
but shall notify the Contracting Officer in writing within 5 working
days after the receipt of any such instruction or direction and
shall request the Contracting Officer to modify the
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SECTION G - CONTRACT ADMINISTRATION AND DATA
contract, accordingly. Upon receiving such notification from the
Contractor, the Contracting Officer shall issue an appropriate
contract modification or advise the Contractor in writing that, in
his/her opinion, the technical direction is within the scope of this
contract. The Contractor shall thereupon proceed immediately with
the instructions or direction or upon the contract action to be
taken with respect thereto and shall be subject to the provision of
the contract clause entitled "Disputes."
G.6 Modification Authority
Notwithstanding any of the other provisions of this contract, the Contracting
Officer shall be the ONLY individual authorized to:
- Accept nonconforming work;
- Waive any requirements of this contract; or
- Modify any term or condition of this contract.
G.7 Subcontract Consent
a. To facilitate the review of a proposed subcontract by the Project
Officer and the Contracting Officer, the Contractor shall submit the
information required by the FAR Clause 52.244-2 entitled,
"Subcontracts Under Cost Reimbursement and Letter Contracts" to the
assigned Project Officer who shall in turn forward the information
with his/her recommendation to the Contracting Officer. The
Contracting Officer shall review the request for subcontract
approval and the Project Officer's recommendation and advise the
Contractor of his/her decision to consent to or dissent from the
proposed subcontract, in writing.
b. Consent is hereby given to issue the following subcontract(s)
Unisys Corporation
8008 Westpark Drive
McLean, VA 22102
G.8 Use of Government Data (Reports/Files/Computer Tapes or Discs)
Any data given to the Contractor by the Government shall be used only for the
performance of the contract unless the Contracting Officer specifically permits
another use, in writing. Should the
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Contracting Officer permit the Contractor the use of Government-supplied data
for a purpose other than solely for performance of this contract and, if such
use could result in a commercially viable product, the Contracting Officer and
the Contractor must negotiate a financial benefit to the Government. This
benefit should most often be in the form of a reduction in the price of the
contract; however, the Contracting Officer may negotiate any other benefits
he/she determines is adequate compensation for the use of these data.
Upon the request of the Contracting Officer, or the expiration date of this
contract, whichever shall come first, the Contractor shall return or destroy all
data given to the Contractor by the Government. However, the Contracting Officer
may direct that the data be retained by the Contractor for a specific period of
time, which period shall be subject to agreement by the Contractor. Whether the
data are to be returned, retained, or destroyed shall be the decision of the
Contracting Officer with the exception that the Contractor may refuse to retain
the data. The Contractor shall retain no data, copies of data, or parts thereof,
in any form, when the Contracting Officer directs that the data be returned or
destroyed. If the data are to be destroyed, the Contractor shall directly
furnish evidence of such destruction in a form the Contracting Officer shall
determine is adequate.
G.9 Data To be Delivered
a. Any working papers, interim reports, data given by the government or
first produced by the Contractor under the contract or collected or
otherwise obtained by the Contractor under the contract, or results
obtained or developed by the Contractor (subcontractor or
consultants) pursuant to the fulfillment of this contract are to be
delivered, documented, and formatted as directed by the Contracting
Officer.
b. In addition, information and/or data, which are held by the
Contractor related to the operation of their business and/or
institution and which are obtained without the use of Federal funds,
shall be considered "PROPRIETARY DATA" and are not "subject data" to
be delivered under this contract.
G.10 Dissemination, Publication and Distribution of Information
a. Data and information either provided to the Contractor, or to any
subcontractor or generated by activities under this contract or
derived from research or studies supported by this contract, shall
be used only for the
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SECTION G - CONTRACT ADMINISTRATION AND DATA
purposes of the contract. It shall not be duplicated, used or
disclosed for any purpose other than the fulfillment of the
requirements set forth in this contract. This restriction does not
limit the contractor's right to use data or information obtained
from a non-restrictive source. Any questions concerning "privileged
information" shall be referred to the Contracting Officer.
b. Some data or information may require special consideration with
regard to the timing of its disclosure so that preliminary findings
which could create erroneous conclusions are not stimulated. Also,
some data or information, which relate to policy matters under
consideration by the Government, may also require special
consideration with regard to the timing of its disclosure so that
the open and vigorous debate, within the government, of possible
policy options is not damaged.
c. Any questions about use or release of the data or information or
handling of material under this contract, shall be referred to the
Contracting Officer who must render a written determination. The
Contracting Officer's determinations will reflect the results of
internal coordination with appropriate program and legal officials.
d. Written advance notice of at least forty-five (45) days shall be
provided to the Contracting Officer of the Contractor's desire to
release findings of studies or research or data or information
described above. If the Contractor disagrees with the Contracting
Officer's determination, and if this disagreement cannot be settled
by the Contractor and the Contracting Officer in a mutually
satisfactory manner, then the issue will be settled pursuant to the
"Disputes" clause.
e. Any presentation of any report, statistical or analytical material
based on information obtained from this contract shall be subject to
review by the Project Officer before dissemination, publication, or
distribution. Presentation includes, but is not limited to, papers,
articles, professional publications, speeches, testimony or
interviews with public print or broadcast media. This does not apply
to information that would be available under the Federal Freedom of
Information Act.
f. The Project Officer review shall cover accuracy, content, manner of
presentation of the information, and also the
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SECTION G - CONTRACT ADMINISTRATION AND DATA
protection of the privacy of individuals. If the review finds that
the Privacy Act is or may be violated, the release/use of the
presentation shall be denied until the offending material is
removed or until the Contracting Officer makes a formal
determination, in writing, that the privacy of individuals is not
being violated.
g. If the review shows that the accuracy, content, or manner of
presentation is not correct or is inappropriate in the light of the
purpose of the project, the Project Officer shall immediately inform
the Contractor, in writing, of the nature of the problem. If the
Contractor disagrees, the Project Officer may insist that the
presentation contain, in a manner of equal importance, materials
which show the government's problem with the presentation.
h. The Contractor agrees to acknowledge support by HCFA whenever
reports of projects funding, in whole or in part, by this contract
are published in any medium. The Contractor shall include in any
publication resulting from work under this contract, an
acknowledgement substantially, as follows:
"The analyses upon which this publication is based were performed
under Contract Number [ ], entitled, " [ ]," sponsored by the
Health Care Financing Administration, Department of Health and Human
Services."
Any deviation from the above legend shall be approved, in writing,
by the Contracting Officer.
G.11 Notification of Changes
a. Definitions. As used in this article, the term "Contracting Officer"
does not include any representative of the Contracting Officer
whether or not such representative is acting within the scope of his
authority.
b. Notice. The primary purpose of this article is to obtain prompt
reporting of Government conduct which the Contractor considers to
constitute a change to this contract within the meaning of the
clause of the contract entitled "Changes - Cost Reimbursement."
Except for changes identified as such in writing and signed by the
Contracting Officer, the Contractor shall notify the Contracting
Officer in writing promptly, and in any event within fifteen (15)
calendar days from the date that the
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SECTION G - CONTRACT ADMINISTRATION AND DATA
Contractor identifies any Government conduct (including actions,
inactions, and written or oral communications) which the Contractor
regards as a change to the contract terms and conditions. The notice
shall state, on the basis of the most accurate information available
to the Contractor:
(1) the date, nature, and circumstances of the conduct regarded as
a change;
(2) the name, function, and activity of each Government individual
and Contractor official or employee involved in or
knowledgeable about such conduct;
(3) the identification of any documents and the substance of any
oral communication involved in such conduct;
(4) the particular elements of contract performance for which the
Contractor may seek an equitable adjustment under the
"Changes" clause, including:
(i) what portion(s) of the contract statement of work will
be affected by the alleged change;
(ii) what adjustments to the contract estimated cost and
fixed fee, delivery or performance schedule, and other
provisions affected by the alleged change are estimated.
c. Continued performance. The Contractor shall not proceed with the
alleged changed identified in the notice required by (b) above,
unless notified in writing by the Contracting Officer in accordance
with (d) (1) below. Until such notification is received, the
Contractor shall continue performance of this contract in accordance
with its terms and conditions.
d. Government Response. The Contracting Officer shall respond to the
notice required by (b) above in writing. In such response, the
Contracting Officer shall either;
(1) confirm that the conduct of which the Contractor gave notice
constitutes a change and, when necessary, direct the mode of
further performance in accordance with the "Changes" clause;
(2) countermand any communication regarded as a change;
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SECTION G - CONTRACT ADMINISTRATION AND DATA
(3) deny that the conduct of which the Contractor gave notice
constitutes a change and, when necessary, direct the mode of
further performance; or
(4) in the event the Contractor's notice information is inadequate
to make a decision under (1), (2), or (3) above, advise the
Contractor what additional information is required, and
establish the date by which it should be furnished.
e. Equitable Adjustments. If the Contracting Officer confirms that
Government conduct effected a change within the scope of the
"Changes - Cost Reimbursement" clause as alleged by the Contractor,
and such conduct causes an increase or decrease in the estimated
cost of, or the time required for the performance of any part of the
work under this contract, whether changed or not changed by such
conduct, an equitable adjustment may be made in accordance with the
"Changes - Cost Reimbursement" clause of this contract.
G.12 Designation of Property Administrator
The HCFA Contract Property Administrator, George Marsalek, Property and
Distribution Management Section, Division of General Services, 6325 Security
Blvd., Baltimore, Md. 2l207, is hereby by designated the property administration
function for this contract. The Contractor agrees to furnish information
regarding Government Property to the Property Administrator in the manner and to
the extent required by the Property Administrator, his duly designated
successors, and in accordance with FAR Part 45 and DHHS Manual entitled,
Contractor's Guide for Control of Government Property, (1990).
G.13 Project Officer
The following Project Officer and Alternate(s) will represent the Government for
the purpose of this contract: Tim Lawrence
The Project Officer is responsible for: (1) monitoring the Contractor's
technical progress, including the surveillance and assessment of performance and
compliance with all substantive project objectives; (2) interpreting the
statement of work and any other technical performance requirements; (3)
performing technical evaluation as required; (4) performing technical
inspections and acceptances required by this contract; (5) assisting in the
resolution of technical problems encountered during performance; and (6)
reviewing of invoices/vouchers.
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SECTION G - CONTRACT ADMINISTRATION AND DATA
The Contracting Officer is the only person with authority to act as agent of the
Government under this contract. Only the Contracting Officer has authority to:
(1) direct or negotiate any changes in the statement of work; (2) modify or
extend the period of performance; (3) change the delivery schedule; (4)
authorize reimbursement to the Contractor any costs incurred during the
performance of this contract; or (5) otherwise change any terms and conditions
of this contract.
The Government may unilaterally change its Project Officer designation.
G-14 Key Personnel
The personnel specified below are considered to be essential to the work being
performed hereunder. Prior to diverting any of the specified individuals to
another program, the Contractor shall notify the Contracting Officer reasonably
in advance and shall submit justification (including name and resume of proposed
substitution of substantially equal ability and qualifications) in sufficient
detail to permit evaluation of the impact on the program. No diversion shall be
made by the Contractor without the written consent of the Contracting Officer.
The following individuals are considered key personnel under this contract: Jack
Brennan
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
H.1 Conditions for Performance
H.2 Monitoring
H.3 Correspondence Procedures
H.4 warranty Against Dual Compensation
H.5 Prohibition Against the Use of HHS Funds to Pay for Costs of Influencing
Legislation
H.6 Excusable Delays
H.7 Organizational Conflicts of Interest
H.8 Confidentiality of Information
H.9 Replacement Parts Availability
H.10 Technology Refreshment
H.11 Engineering Changes
H.12 Delivery Orders
H.13 New Restrictions on Lobbying
H.14 Warranty
H.15 Safety and Health Standards
H.16 Disputes
H.17 Procurement Authority (OCT 90 FIRMR)
H.18 Certificate of Maintainability
H.19 Spare Parts
H.20 Risk of Loss or Damage
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
H.1 Conditions for Performance
In addition to the performance requirements of this contract as set forth under
Section C, DESCRIPTION/SPECIFICATIONS/WORK STATEMENT, the Contractor may be
required to comply with the requirements of any revisions in legislation or
regulations which may be enacted or implemented during the period of performance
of this contract, and are directly applicable to the performance requirements of
this contract.
H.2 Monitoring
The Contractor shall be subject to periodic contract performance review as may
be deemed necessary by the Contracting Officer or the Project Officer as his/her
designee. The Contractor shall make its records and facilities available to the
Contracting Officer for purposes of such monitoring of contract performance.
H.3 Correspondence Procedures
To promote timely and effective administration (except for invoices/public
vouchers, technical progress reports, deliverables) correspondence submitted
under this contract shall be subject to the following procedures:
a. Technical Correspondence-Technical correspondence (as used herein,
this term excludes technical correspondence which proposes or
otherwise involves waivers, deviations or modifications to the
requirements, terms, or conditions of this contract) shall be
addressed to the Project Officer, with an information copy of the
basic correspondence to the Contracting Officer.
b. Other Correspondence-All other correspondence shall be addressed to
the Contracting Officer, with information copies of the basic
correspondence to the Project Officer.
c. Subject Lines-All correspondence shall contain a subject line,
commencing with the Contract Number and assigning consecutive numbers
(serial numbers to permit accountability), as illustrated below:
Subject: Contract No.
Contractors Name
Request for Subcontract Approval
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
H.4 Warranty Against Dual Compensation
The Contractor warrants that no part of the total contract amount provided
herein shall be paid directly or indirectly to any officer or employee of the
Department of Health and Human Services as wages, compensation, or gifts for
acting as officer, employee, subcontractor, or consultant to the Contractor in
connection with any work contemplated or performed under or in connection with
this contract.
H.5 Prohibition Against the Use of HHS Funds to Pay for Costs of Influencing
Legislation
No part of any funds under this contract shall be used to pay the salary of
expenses of any Contractor or agent acting for the Contractor, to engage in any
activity designed to influence legislation or appropriations pending before the
Congress.
H.6 Excusable Delays
a. Except with respect to defaults of subcontractors, the Contractor
shall not bein default by reason of any failure of performance of the
contract in accordance with its terms (including any failure by the
Contractor to make progress in the prosecution of the work hereunder
which endangers such performance) if such failure arises out of causes
beyond the control and without the fault of negligence of the
Contractor.
b. Such causes may include, but are not restricted to, acts of God or of
a publicenemy, acts of the Government in either its sovereign or
contractual capability, fires, floods, epidemics, quarantine
restrictions, strikes, freight embargoes, and unusually severe
weather, but in every case the failure to perform must be beyond the
control and without the fault or negligence of the Contractor. If the
failure to perform is caused by the failure of a subcontractor to
perform or make progress, and if such failure arises out of causes
beyond the control of both Contractor and subcontractor, and without
the fault or negligence of either of them, the Contractor shall not be
deemed to be in default, unless (a) the supplies or services to be
furnished by the subcontractor were obtainable from other sources, (b)
the Contracting Officer shall have ordered the Contractor in writing
to procure such supplies or services from such other sources and (c)
the Contractor shall have failed to comply reasonable with such order.
Upon request of the Contractor, the Contracting Officer shall
ascertain the facts and extent of such failure and, or he/she shall
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
determine that any failure to perform was occasioned by any one or
more of the said causes, the delivery schedule shall be reviewed
accordingly.
H.7 Organizational Conflicts of Interest
a. Purpose. The primary purpose of this clause is to aid in ensuring that
the Contractor (1) does not obtain any unfair competitive advantage
over other parties by virtue of its performance of this contract, and
(2) is not biased because of its current or planned interest
(financial, organizational, or otherwise) which relate to the work
under this contract.
b. Scope. The restrictions described herein shall apply to performance or
participation by the Contractor and any of its affiliate organizations
or their successors in interest (hereinafter collectively referred to
as the "Contractor") in the activities covered by this clause as a
prime Contractor, subcontractor, co-sponsor, joint venturer,
consultant, or in any similar capacity.
(1) Advisory, consulting, analytical, evaluation, or study work,
including the preparation of statements of work and
specifications:
(a) If the Contractor performs advisory, consulting, analytical,
evaluation, study, or similar work under this contract, it
shall be ineligible thereafter to participate in any
capacity in Government contractual efforts (solicited or
unsolicited) which stem directly from such work, and the
Contractor agrees not to perform similar work for
prospective offerors with respect to any such contractual
efforts.
Furthermore, unless so directed in writing by the
Contracting Officer, the Contractor shall not perform any
such work under this contract on any of its products or
services, or the products or services of another firm for
which the Contractor performs similar work. Nothing in this
subparagraph shall preclude the Contractor from competing
for HHS management and technical support services follow-on
contracts as defined in paragraph 6. below.
(b) If the Contractor under this contract assists substantially
in the preparation of a
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
statement of work or specifications, the Contractor shall
be ineligible to perform or participate in any capacity in
any contractual effort which is based on such statement of
work or specifications. The Contractor shall not incorporate
its products or services in such statement of work or
specifications unless so directed in writing by the
Contracting Officer, in which case the restriction in this
subparagraph shall not apply.
(2) Access to the use of information:
(a) If the Contractor in the performance of this contract
obtains access to information, such as HHS plans, policies,
reports, studies, financial plans, or data which has not
been released to the public, the Contractor agrees not to
(a) use such information for any private purpose unless the
information has been released to the public; (b) disclose
such information for a period of six (6) months after the
completion of this contract, or the release of such
information to the public, whichever is first; (c) submit an
unsolicited proposal to the Government which is based on
such information until one (1) year after the release of
such information to the public; or (d) release such
information without prior written approval by the
Contracting Officer.
(b) In addition, the Contractor agrees that to the extent it
receives or is given access to proprietary data or other
confidential technical, business or financial information
under this contract, it shall treat such information in
accordance with any restrictions imposed on such
information.
(c) The Contractor shall have, subject to patent and security
provisions of this contract, the right to use technical data
it first produces under this contract for its private
purposes provided that, as of the date of such use, all data
requirements of this contract have been met.
(3) Subcontracts. The Contractor shall include this
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
clause, including this paragraph, in subcontracts of any tier
which involve performance of work of the type specified in b.(1)
above or access to information covered in b.(2) above. The use
of this clause in such subcontracts shall be read by substituting
the word "Subcontractor" for the word "Contractor" whenever the
word "Contractor" appears.
(4) Remedies: For breach of the above restrictions or for
non-disclosure or misrepresentation of any relevant interest
required to be disclosed concerning this contract, the Government
may, at no cost, terminate the contract, disqualify the
Contractor for subsequent related contractual efforts, and pursue
other remedies as may be permitted by law or this contract.
(5) Waiver. Any request for waiver under this clause shall be
directed in writing to the Contracting Officer and shall include
a full description of the requested waiver and the reasons in
support thereof. If it is determined to be in the best interest
of the Government, the Contracting Officer shall grant such
waiver in writing.
(6) Definitions. The term "management and technical support services"
includes any advice, assistance, analysis, consultation,
evaluation, examination, report, review, study, survey, or
similar assistance, including providing assistance in procurement
and related activities, to support any program or their
operations of HCFA.
H.8 Confidentiality of Information
a. Confidential information, as used in this clause; mean (1) information
or data of a personal nature about an individual, or (2) proprietary
information or data submitted by or pertaining to an institution or
organization.
b. In addition to the types of confidential information described in a.
(1) and (2) above, information which might require special
consideration with regard to the timing of its disclosure may derive
from studies or research, during which public disclosure of
preliminary invalidated findings could create erroneous conclusions
which might threaten public health or safety if acted upon.
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
c. The Contracting Officer and the Contractor may, by mutual consent,
identify elsewhere in this contract specific information and/or
categories of information which the Government will furnish to the
Contractor or that the Contractor is expected to generate which is
confidential. Similarly, the Contracting Officer and the Contractor
may, by mutual consent, identify such confidential information from
time to time during the performance of the contract. Failure to agree
will be settled pursuant to the "Disputes" clause.
d. If it is established elsewhere in this contract that information to be
utilized under this contract, or a portion thereof, is subject to the
Privacy Act, the Contractor will follow the rules and procedures of
disclosure set forth in the Privacy Act of 1974, 5 U.S.C. 552a, and
implementing regulations and policies, with respect to systems of
records determined to be subject to the Privacy Act.
e. Confidential information, as defined in a. (1) and (2) above, that is
information or data of a personal nature about an individual, or
proprietary information or data submitted by or pertaining to an
institution or organization, shall not be disclosed without the prior
written consent of the individual, institution, or organization.
f. Written advance notice of at least 45 days will be provided to the
Contracting Officer of the Contractor's intent to release findings of
studies or research, which have the possibility of adverse effects on
the public or the Federal agency, as described in b. above. If the
Contracting Officer does not pose any objections in writing within the
45-day period, the Contractor may proceed with disclosure.
Disagreements not resolved by the Contractor and the Contracting
Officer will be settled pursuant to the "Disputes" clause.
g. Whenever the Contractor is uncertain with regard to the proper
handling of material under the contract, or if the material in
question is subject to the Privacy Act or is confidential information
subject to the provisions of this clause, the Contractor should obtain
a written determination from the Contracting Officer prior to any
release, disclosure, dissemination, or publication.
h. Contracting Officer determinations will reflect the results of
internal coordination with appropriate program and legal officials.
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
i. The provisions of paragraph e. of this clause shall not apply when the
information is subject to conflicting or overlapping provisions in
other Federal, State or local laws.
H.9 Replacement Parts Availability
The Contractor guarantees that replacement parts for equipment in this contract
will be available for the system life stated in Section I, "Term of Contract".
The Contractor shall notify the Government 90 calendar days before the end of
the systems life as to the continuing availability of parts subsequent to this
period. If parts will not be available from the Contractor, then the Government
may require the Contractor to furnish data that is available to assist the
Government to obtain such parts from another source.
H.l0 Technology Refreshment
a. Overview
During the life of this contract, and under its terms and conditions,
the Government may request or the Contractor may propose,
technologically advanced systems and components which first become
commercially available after this contract's effective date or become
economically feasible to offer due to changes in market conditions
after this contract's effective date. These items may be added under
the terms and conditions of this clause.
b. Types of substitutions/upgrades
The substitutions/upgrades covered by this clause will be substituted
for upgrades to items/systems already listed in Section B. The
substitutions/upgrades may be in total or in part.
It is further understood by the parties to this contract that this
clause envisages technological refreshment related to the general type
of equipment covered by the scope of this contract and a test shall be
performed to verify performance of technological substitutions/upgrade
at HCFA's option.
c. Minimum qualifications for acceptance of substitutions/upgrades
The Government is under no obligation to substitute or
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
upgrade any item already listed in the contract. However, subject to
mutual agreement, when items are added under this contract, that item
or items must meet the following criteria:
(1) Meet or exceed all mandatory requirement of the contract
including availability of equipment.
(2) Must provide an improved cost to performance ratio over the most
similar items in the contract.
(3) Be judged technically acceptable by the Project Officer; and
(4) Be approved in writing by the Contracting Officer and the
Contractor through a bi-lateral modification to the contract.
d. Pricing of substitutions/Upgrades
The cost of equipment, services, and supplies of the equipment
substituted shall provide at least equivalent performance with
economic benefits or significantly enhanced performance at an
additional cost per unit of capability. The Contracting Officer shall
negotiate price, but in no case shall the Government pay more per item
than the prevailing GSA schedule price or that of the most favored
commercial customer, whichever is less.
e. Delivery of Substitutions/Upgrades
Notwithstanding the delivery requirements set forth in Section F,
delivery requirements for upgrade items shall be mutually agreed upon
by the parties to this contract at the time the upgrade item is added.
The Contracting Officer shall have the right to set the delivery
schedule based on the longer of the standard commercial delivery
schedule of the items or the Contractor's standard delivery schedule
for similar items, if a mutually agreeable schedule can not be set.
f. Identifications of technologically advanced products.
While the Government reserves the right to independently solicit a
proposal from the Contractor under the terms of this clause at any
time, potential upgrades will normally be brought to the Government's
attention by the Contractor.
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
H.11 ENGINEERING CHANGES
a. After contract award, the Government may solicit, and the Contractor
is encouraged to propose independently, engineering changes to the
equipment, or other requirements of this contract. These changes may
be proposed to save money, to improve performance, to save energy, or
to satisfy increased data processing requirements. If the proposed
changes are acceptable to both parties, the Contractor shall submit a
price change proposal to the Government for evaluation. Those proposed
engineering changes that are acceptable to the Government will be
processed as modifications to the contract.
b. This applies only to those proposed changes identified by the
Contractor, as a proposal submitted pursuant to the provisions of this
clause. As a minimum, the following information shall be submitted by
the Contractor with each proposal:
(1) A description of the difference between the existing contract
requirement and the proposed change, and the comparative
advantages and disadvantages of each;
(2) Itemized requirements of the contract which must be changed if
the proposal is adopted, and the proposed revision to the
contract for each such change;
(3) An estimate of the changes in performance and cost, if any, that
will result from adoption of the proposal;
(4) An evaluation of the effects the proposed change would have on
collateral costs to the Government, such as Government furnished
property costs, costs of related items, and costs of maintenance
and operation; and
(5) A statement of the time by which the change order adopting the
proposal must be issued so as to obtain the maximum benefits of
the changes during the remainder of this contract. Also, any
effect on the contract completion time or delivery schedule shall
be identified.
c. Engineering change proposals submitted to the Contracting Officer
shall be processed expeditiously. The Government
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
shall not be liable for proposal preparation costs or any delay in
acting upon any proposal submitted pursuant to this clause. The
Contractor has the right to withdraw, in whole or in part, any
engineering change proposal not accepted by the Government within the
period specified in the engineering change proposal. The decision of
the Contracting Officer as to the acceptance of any such proposal
under this contract shall be final and shall not be subject to the
"Disputes" clause of this contract.
d. The Contracting Officer may accept any engineering change proposal
submitted pursuant to this clause by giving the Contractor written
notice thereof. This written notice may be given by issuance of a
modification to this contract. Unless and until a modification is
executed to incorporate an engineering change proposal under this
contract, the Contractor shall remain obligated to perform in
accordance with the terms of the existing contract.
e. If an engineering change proposal submitted pursuant to this clause is
accepted and applied to this contract, an equitable adjustment in the
contract price and in any other affected provisions of this contract
shall be made in accordance with this clause and other applicable
clauses of this contract. When the cost of performance of this
contract is increased or decreased as a result of the change, the
equitable adjustment increasing or decreasing the contract price shall
be in accordance with the "Changes" clause (52.243-1) rather than
under this clause, but the resulting contract modification shall state
that it is made pursuant to this clause.
f. The Contractor is requested to identify specifically any information
contained in the engineering change proposal which the Contractor
considers confidential and/or proprietary and which the Contractor
prefers not be disclosed to the public. The identification of
information as confidential and/or proprietary is for information
purposes only and shall not be binding on the Government to prevent
disclosure of such information. Offerors are advised that such
information may be subject to release upon request pursuant to the
Freedom of Information Act (5 U.S.C. 552).
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
H.12 DELIVERY ORDERS
a. Delivery Orders issued under this contract will be identified by
four-digit, sequential numbers, beginning with 0001 and the fiscal
year of its issuance (e.g. an order issued in FY93 would read
93-0001).
b. Each delivery order shall contain the Contract Line Item Number (CLIN)
and its associated price as specified in the contract pricing table.
c. The Contractor shall begin performance as specified in Section F or as
stated in the specific delivery order if different.
d. Delivery Orders shall not change or supersede the terms or conditions
of the contract. If any language in the delivery order suggests a
change to the terms and conditions of the contract, the Contractor
shall immediately notify the Contracting Officer, and shall not
proceed until the discrepancy is resolved or clarified.
H.13 NEW RESTRICTIONS ON LOBBYING
a. Definitions. As used in this clause,
"Agency", as defined in #5 U.S.C. 552(f), includes Federal executive
departments and agencies as well as independent regulatory commissions
and Government corporations, as defined in 31 U.S.C. 9101(1).
"Covered Federal action" means any of the following Federal actions:
(1) The awarding of any Federal contract;
(2) The making of any Federal grant;
(3) The making of any Federal loan;
(4) The entering into of any cooperative agreement; and
(5) The extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.
Covered Federal action does not include receiving from an agency
a commitment providing for the United States to insure or
guarantee a loan.
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
"Indian tribe" and "tribal organization" have the meaning
provided in section 4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450B). Alaskan Natives are
included under the definitions of Indian tribes in that Act.
"Influencing or attempting to influence" means making, with the
intent to influence, any communication to or appearance before an
officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of
Congress in connection with any covered Federal action.
"Local government" means a unit of government in a State and, if
chartered, established, or otherwise recognized by a State for
the performance of a governmental duty, including a local public
authority, a special district, an intrastate district, a council
of governments, a sponsor group representative organization, and
any other instrumentality of a local government.
"Officer or employee of an agency" includes the following
individuals who are employed by an agency:
(1) An individual who is appointed to a position in the
Government under title 5, U.S. Code, including a position
under a temporary appointment;
(2) A member of the uniformed services as defined in section
101(3), title 37, U.S. Code;
(3) A special Government employee as defined in section 202,
title 18, U.S. Code; and
(4) An individual who is a member of a Federal advisory
committee, as defined by the Federal Advisory Committee Act,
title 5, U.S. Code appendix 2.
"Person" means an individual, corporation, company,
association, authority, firm, partnership, society, State,
and local government, regardless of whether such entity is
operated for profit or not for profit. This term excludes an
Indian tribe, tribal organization, or any other Indian
organization with respect to expenditures specifically
permitted by other Federal law.
"Reasonable compensation" means, with respect to a regularly
employed officer or employee of any person, compensation
that is consistent with the
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
normal compensation for such officer or employee for work
that is not furnished to, not funded by, or not furnished in
cooperation with the Federal Government.
"Reasonable payment" means, with respect to professional and
other technical service, a payment in an amount that is
consistent with the amount normally paid for such services
in the private sector.
"Recipient" includes all Contractors and Subcontractors at
any tier in connection with a Federal contract. The term
excludes an Indian tribe, tribal organization, or any other
Indian organization with respect to expenditures
specifically permitted by other Federal law.
"Regularly employed" means, with respect to an officer or
employee of a person requesting or receiving a Federal
contract, an officer or employee who is employed by such
person for at least 130 working days within one year
immediately preceding the date of the submission that
initiates agency consideration of such person for receipt of
such contract. An officer or employee who is employed by
such person for less that 130 working days within one year
immediately preceding the date of the submission that
initiates agency consideration of such person shall be
considered to be regularly employed as soon as he or she is
employed by such person for 130 working days.
"State" means a State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, a territory of
possession of the United States, an agency or
instrumentality of a State, and a multi-State, regional, or
interstate entity having government duties and powers.
b. Prohibition
(1) Section 1352 of title 31, U.S. Code provides in part that no
appropriated funds may be expended by the recipient of a Federal
contract, grant, loan, or cooperative agreement to pay any person
for influencing or attempting to influence an officer or employee
of any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection
with any of the
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
following covered Federal actions: the awarding of any Federal
contract, the making of any Federal grant, the making of any
Federal loan, the entering into of any cooperative agreement, and
the extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.
(2) The prohibition does not apply as follows:
(i) Agency and legislative liaison by Own Employees.
(A) The prohibition on the use of appropriated funds, in
paragraph (1) of this section, does not apply in the
case of a payment of reasonable compensation made to an
officer or employee of a person requesting or receiving
a Federal contract if the payment is for agency and
legislative liaison activities not directly related to
a covered Federal action.
(B) For purposes of paragraph (A) of this section,
providing any information specifically requested by an
agency or Congress is allowable at any time.
(C) For purposes of paragraph (A) of this section, the
following agency and legislative liaison activities are
allowable at any time only where they are not related
to a specific solicitation for any covered Federal
action:
(i) Discussing with an agency (including individual
demonstrations) the qualities and characteristics
of the person's products or services, conditions
or terms of sale, and service capabilities; and
(ii) Technical discussions and other activities
regarding the application or adaptation of the
person's
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
products or services for an agency's use.
(D) For purposes of paragraph (A) of this section, the
following agency and legislative liaison activities are
allowable only where they are prior to formal
solicitation of any covered Federal action:
(i) Providing any information not specifically
requested but necessary for an agency to make an
informed decision about initiation of a covered
Federal action;
(ii) Technical discussions regarding the preparation
of a unsolicited proposal prior to its official
submission; and
(iii) Capability presentations by persons seeking
awards from an agency pursuant to the provisions
of the Small Business Act, as amended by Public
Law 95-507 and other subsequent amendments.
(E) Only those activities expressly authorized by paragraph
(i) of this section are allowable under paragraph (i).
(ii) Professional and technical services by Own Employees.
(A) The prohibition on the use of appropriated funds, in
paragraph (1) of this section, does not apply in the
case of a payment of reasonable compensation made to an
officer or employee of a person requesting or receiving
a Federal contract or an extension, continuation,
renewal, amendment, or modification of a Federal
contract if payment is for professional or technical
services rendered directly in the preparation,
submission, or negotiation of any bid, proposal, or
application for that Federal contract or for meeting
requirements
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<PAGE>
SECTION H - SPECIAL CONTRACT REQUIREMENTS
imposed by or pursuant to law as a condition for
receiving that Federal contract.
(B) For purposes of paragraph (A) of this section,
"professional and technical services" shall be limited
to advice and analysis directly applying any
professional or technical discipline. For example,
drafting of a legal document accompanying a bid or
proposal by a lawyer is allowable. Similarly, technical
advice provided by an engineer on the performance or
operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable.
However, communications with the intent to influence
made by a professional (such as a licensed lawyer) or a
technical person (such as a licensed accountant) are
not allowable under this section unless they provide
advice and analysis directly applying their
professional or technical expertise and unless the
advice or analysis is rendered directly and solely in
the preparation, submission or negotiation of a covered
Federal action.
Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal
advice or analysis directly and solely related to the
legal aspects of his or her client's proposal, but
generally advocate one proposal over another are not
allowable under this section because the lawyer is not
providing professional legal services. Similarly,
communications with the intent to influence made by an
engineer providing an engineering analysis prior to the
preparation or submission of a bid or proposal are not
allowable under this section since the engineer is
providing technical service but not directly in the
preparation, submission or negotiation of a covered
Federal action.
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
(C) Requirements imposed by or pursuant to law as a
condition for receiving a covered Federal award include
those required by law or regulation, or reasonably
expected to be required by law or regulation, and any
other requirements in the actual award documents.
(D) Only those services expressly authorized by paragraph
(ii) of this section are allowable under paragraph
(ii).
(iii) Reporting for Own Employees.
No reporting is required with respect to payments of
reasonable compensation made to regularly employed officers
or employees of a person.
(iv) Professional and technical services by Other than Own
Employees.
(A) The prohibition on the use of appropriated funds, in
paragraph (1) of this section, does not apply in the
case of any reasonable payment to a person, other than
an officer or employee of a person requesting or
receiving a covered Federal actions, if the payment is
for professional or technical services rendered
directly in the preparation, submission, or negotiation
of any bid, proposal, or application for that Federal
contract or for meeting requirements imposed by or
pursuant to law as a condition for receiving that
Federal contract.
(B) For purposes of paragraph (A) of this section,
"professional and technical services" shall be limited
to advice and analysis directly applying any
professional or technical discipline. For example,
drafting of a legal document accompanying a bid or
proposal by a lawyer is allowable. Similarly, technical
advice provided by an engineer on the performance or
operational capability of a piece of equipment rendered
directly in the negotiation of a
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
contract is allowable. However, communications with the
intent to influence made by a professional (such as a
licensed lawyer) or a technical person (such as a
licensed accountant) are not allowable under this
section unless they provide advice and analysis
directly applying their professional or technical
expertise and unless the advice or analysis is rendered
directly and solely in the preparation, submission or
negotiation of a covered Federal action. Thus, for
example, communications with the intent to influence
made by a lawyer that do not provide legal advice or
analysis directly and solely related to the legal
aspects of his or her client's proposal, but generally
advocate one proposal over another are not allowable
under this section because the lawyer is not providing
professional legal services. Similarly, communications
with the intent to influence made by an engineer
providing an engineering analysis prior to the
preparation or submission of a bid or proposal are not
allowable under this section since the engineer is
providing technical service but not directly in the
preparation, submission or negotiation of a covered
Federal action.
(C) Requirements imposed by or pursuant to law as a
condition for receiving a covered Federal award include
those required by law or regulation, or reasonably
expected to be required by law or regulation, and any
other requirements in the actual award documents.
(D) Persons other than officers or employees of a person
requesting or receiving a covered Federal action
include consultants and trade associations.
(E) Only those services expressly authorized by paragraph
(iv) of this section are allowable under paragraph
(iv).
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
c. Disclosure
(1) Each person who requests or receives from an agency a Federal contract
shall file with that agency a certification, set forth in Section K of
this solicitation, that the person has not made, and will not make,
any payment prohibited by paragraph (b) of this clause.
(2) Each person who requests or receives from an agency a Federal contract
shall file with that agency a disclosure form, Standard Form-LLL,
"Disclosure of Lobbying Activities," if such person has made or has
agreed to make any payment using nonappropriated funds (to include
profits from any covered Federal action), which would be prohibited
under paragraph (b) of this clause if paid for with appropriated
funds.
(3) Each person shall file a disclosure form at the end of each calendar
quarter in which there occurs any event that requires disclosure or
that materially affects the accuracy of the information contained in
any disclosure form previously filed by such person under paragraph
(2) of this section. An event that materially affects the accuracy of
the information reported includes:
(i) A cumulative increase of $25,000 or more in the amount paid or
expected to be paid for influencing or attempting to influence a
covered Federal action; or
(ii) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or
(iii) A change in the officer(s), employee(s), or Member(s) contacted
to influence or attempt to influence a covered Federal action.
(4) Any person who requests or receives from a person referred to in
paragraph (1) of this section a subcontract exceeding $100,000 at any
tier under a Federal contract shall file a certification, and a
disclosure form, if required, to the next tier above.
(5) All disclosure forms, but not certifications, shall be forwarded from
tier to tier until received by
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
the person referred to in paragraph (1) of this section. That person
shall forward all disclosure forms to the agency.
d. Agreement
In accepting any contract resulting from this solicitation, the person
submitting the offer agrees not to make any payment prohibited by this
clause.
e. Penalties
(1) Any person who makes an expenditure prohibited under paragraph
(b) of this clause shall be subject to a civil penalty of not
less than $10,000 and not more than $100,000 for each such
expenditure.
(2) Any person who fails to file or amend the disclosure form to be
filed or amended if required by this clause, shall be subject to
a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.
(3) Contractors may rely without liability on the representations
made by their Subcontractors in the certification and disclosure
form.
f. Cost allowability
Nothing in this clause is to be interpreted to make allowable or
reasonable any costs which would be unallowable or unreasonable in
accordance with Part 31 of the Federal Acquisition Regulation.
Conversely, costs made specifically unallowable under any of the
provisions of Part 31 of the Federal Acquisition Regulation.
H.14 Warranty
The Contractor shall furnish, without additional charge to the contract,
maintenance service and all parts for a period of 36 months beginning with the
first date of the successful performance period. The Contractor is relieved of
this warranty obligation in the event Government fault or negligence caused the
damage in question.
All replaced parts during the warranty period shall become the property of the
Contractor.
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
a. Cost of Movement
Prior to the expiration of the warranty period, whenever equipment
shipped for mechanical replacement purposes, the Contractor shall bear
all costs, including but not limited to, costs of packing,
transportation, rigging, drayage, and insurance.
b. Fault of Government
The warranty shall not apply to maintenance required due to the fault
or negligence of the Government.
c. Title
Title to equipment, including special features installed thereon, will
pass to the Government when the purchase price is paid.
H.l5 Safety and health standards
a. The contractor shall be responsible for the safety and health of
individuals as follows:
The Contractor maintains full responsibility and liability for
compliance with all applicable regulations pertaining to the
protection of workers, visitors to the site and persons occupying
adjacent areas. The Contractor holds the Government harmless against
injury resulting from the failure on the Contractor's part, or on the
part of the Contractor's employees or subcontractors to comply with
any applicable safety or health regulation.
b. If during the course of performance under this contract, the
Contractor suspects contact with hazardous or toxic
materials/substances, such as asbestos, polychlorinated biphenyls
(PCBS), explosives, or radioactive materials, as specified in Subpart
H and Z of 29 CFR 1210 and Federal Standard 313. The Contractor shall
immediately inform the Contracting Officer of these
materials/substances. The Contractor shall not disturb suspected
harmful materials/substances but will take responsible measures to
prevent exposure to individuals, pending receipt of direction from the
Contracting Officer. The Contracting Officer will coordinate any
necessary action with the Contracting Officer's Technical
Representative (COTR).
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
H.16 DISPUTES
a. This contract is subject to the Contract Disputes Act of 1978 (Public
Law 95-563).
b. Except as provided in the Act, all disputes arising under or relating
to this contract shall be resolved in accordance with this clause.
c. As used herein, "claim" means a written demand or assertion by one of
the parties seeking as a legal right, the payment of money, adjustment
or interpretations of contract terms, or other relief, arising under
or relating to this contract.
A voucher, invoice, or request for payment that is not in dispute when
submitted is not a claim for the purposes of the Act. However, where
such submission is subsequently not acted upon in a reasonable time,
or disputed either as to liability or amount, it may be converted to a
claim pursuant to the Act.
A claim by the Contractor shall be made in writing and submitted to
the Contracting Officer for decision. A claim by the Government
against the Contractor shall be subject to a decision by the.
Contracting Officer.
d. For Contractor claims of more than $50,000, the Contractor shall
submit with the claim a certification that the claim is made in good
faith; the supporting data are accurate and complete to the best of
the Contractor's knowledge and belief and that the amount requested
accurately reflects the contract certification, shall be executed by
the Contractor, if an individual. When the Contractor is not an
individual, the certificate shall be executed by a senior company
official in charge of the Contractor's plant or location involved, or
by an officer or general partner of the Contractor having overall
responsibility for the conduct of the Contractor's affairs.
e. For Contractor claims of $50,000 or less, the Contracting Officer must
render a decision within sixty (6) days or notify the Contractor of
the date when the decision will be made.
f. The Contracting Officer's decision shall be final unless the
Contractor appeals or files a suit as provided in the Act.
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
g. The authority of the Contracting Officer under the Act does not extend
to claims or disputes which by statute or regulation other agencies
are expressly authorized to decide.
h. Interest on the amount found due on a Contractor's claim shall be paid
from the date the claim is received by the Contracting Officer until
the date of payment.
i. Except as the parties may otherwise agree, pending final resolution of
a claim by the Contractor arising under the contract, the Contractor
shall proceed diligently with the performance of the contract in
accordance with the Contracting Officer's decision.
H.17 PROCUREMENT AUTHORITY (OCT 90 FIRMR)
This acquisition is being conducted under a specific acquisition delegation of
GSA's exclusive procurement authority for FIP resources. The specific GSA DPA
case number is KMA-93-0372.
(End of provision)
H.18 Certificate of Maintainability
a. At such time as the contract is terminated, expire contractually or
otherwise not extended, or upon request by the contracting officer at
any time, the Contractor shall issue, within five (5) working days, a
"Certificate of Maintainability" for any or all equipment acquired and
maintained under this contract.
b. The certificate shall state that preventive maintenance in accordance
with the specifications of the Original Equipment Manufacturer (OEM)
has been performed and that the equipment is performing in accordance
with the OEM's specifications such that the OEM ( or the OEM's
successor in interest) commits that it would assume maintenance of the
equipment [or the OEM certifies that the equipment is eligible for
maintenance] (including but not limited to repair or inspection
charges) if such maintenance were assumed effective the day after the
Contractor's performance ceases. The Contractor is responsible for
bearing all costs associated with obtaining such certification at no
separate charge to the Government.
c. Should the Contractor fail to issue the required Certificate of
Maintainability in accordance with this clause, or should any
equipment fail to perform in
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
accordance with the certification, the Contractor shall be liable to
the Government for any reasonable costs incurred by the Government for
the purpose of bringing the equipment up to the required maintainable
level.
d. If equipment is acquired under this contract, without maintenance of
such equipment being concurrently acquired under the contract, the
Contractor shall issue a Certificate of Maintainability for such
equipment within five (5) working days after it receives notice of
award of the contract. The certificate shall state that the equipment
is in such condition that the OEM (or the OEM's successor in interest)
commits that it would assume maintenance of the equipment [or the OEM
certifies that the equipment is eligible for maintenance]. All charges
required to obtain the requisite performance of the equipment up to
the later of the time the equipment is accepted by the Government of
the warranty expires, shall be borne by the Contractor. The fact that
the equipment may have been acquired with a warranty does not relieve
the contractor of its obligations under this subparagraph.
H.19 Spare Parts
The contractor shall provide spare parts to the Government, at the option of the
Government, to allow the Government to maintain the equipment delivered under
this contract. Spare parts will be ordered as needed. Spare parts will be
shipped by the Contractor in accordance with the delivery requirements specified
in Section F.2. Parts identified by the Contractor as repairable shall be
returned to the Contractor upon failure and will become the property of the
Contractor.
H.20 Risk of Loss or Damage
In the case of purchased equipment, the Government is relived of all risks of
loss or damage to the equipment , up to and including the day prior to the first
day of a successful performance period, except for: (i) loss or damage caused by
war, insurrection, civil strife, rebellion, weapons of war; or (ii) negligence
on the part of the Government or its agents, provided, however, that the
Government shall be relieved of the liability for such risks or damage due to
negligence if any commercial customer of the Contractor is relived of such
liability under like circumstances. If the Government is liable for loss or
damage of equipment, the Contractor shall have the option to restoration at the
Contractor's then current prices, terms, and conditions. If the contractor
elects not to restore the equipment, the Government may, at its own expense,
restore the equipment to its previous condition. If,
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SECTION H - SPECIAL CONTRACT REQUIREMENTS
however, equipment is lost or damaged beyond repair, the Government shall pay
the Contractor the same price for the equipment as the Government would have
paid if it had purchased the equipment on the day prior to the loss or damage
under the provisions of this contract. This clause shall govern risk of lost or
damage, notwithstanding any other provisions of this contract relating to title,
payment, or ownership.
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SECTION I - CONTRACT CLAUSES
I.1 52.252-2 Clauses Incorporated by Reference. (JUN 1988)
This contract incorporates one or more clauses by reference, with the same force
and effect as if they were given in full text. Upon request, the Contracting
Officer will make their full text available.
52.202-1 Definitions SEP 1991
52.203-1 Officials Not to Benefit APR 1984
52.203-3 Gratuities APR 1984
52.203-5 Covenant Against Contingent Fees APR 1984
52.203-6 Restrictions on Subcontractor Sales JUL 1985
to the Government
52.203-7 Anti-Kickback Procedures OCT 1988
52.203-9 Requirement for Certificate of NOV 1990
Procurement Integrity - Modification
52.203-10 Price or Fee Adjustment for Illegal SEP 1990
or Improper Activity
52.204-3 Taxpayer Identification SEP 1992
52.215-1 Examination of Records by FEB 1993
Comptroller General
52.215-26 Integrity of Unit Prices APR 1991
52.215-32 Certification of Commercial Pricing AUG 1991
for Parts or Components
52.215-33 Order of Precedence JAN 1986
52.215-34 Evaluation of Offers for Multiple MAR 1990
Awards
52.217-8 Option to Extend Services AUG 1989
52.219-6 Notice ot Total Small Business APR 1984
Set-aside
I-1
<PAGE>
SECTION I - CONTRACT CLAUSES
52.219-13 Utilization of Women-Owned Small AUG 1986
Bus messes
52.220-3 Utilization of Labor Surplus Area APR 1984
Concerns
52.220-4 Labor Surplus Area Subcontracting APR 1984
Program
52.222-1 Notice to the Government of Labor APR 1984
Disputes
52.222-3 Convict Labor APR 1984
52.222-18 Notification of Employee Rights MAY 1992
Concerning Payment of Union Dues or
Fees
52.222-20 Walsh-Healey Public Contracts Act APR 1984
52.222-26 Equal Opportunity APR 1984
52.222-28 Equal Opportunity Preaward APR 1984
Clearance of Subcontracts
52.222-35 Affirmative Action for Special APR 1984
Disabled and Vietnam Era Veterans
52.222-36 Affirmative Action for Handicapped APR 1984
Workers
52.222-37 Employment Reports on Special JAN 1988
Disabled Veterans and Veterans of
the Vietnam Era
52.223-2 Clean Air and Water APR 1984
52.223-6 Drug-Free Workplace JUL 1990
52.224-1 Privacy Act Notification APR 1984
52.224-2 Privacy Act APR 1984
52.225-3 Buy American Act-Supplies JAN 1991
52.225-7 Balance of Payments Program APR 1984
52.225-9 Buy American Act -- Trade MAY 1994
Agreement Act -- Balance of
Payments Program
1-2
<PAGE>
SECTION I - CONTRACT CLAUSES
52.227-1 Authorization and Consent APR 1984
52.227-2 Notice and Assistance Regarding APR 1984
Patent and Copyright Infringement
52.227-3 Patent Indemnity APR 1984
52.227-14 Rights in Data - General JUN 1987
52.227-19 Comercial Computer Software JUN 1987
Restricted Rights
52.228-5 Insurance - Work on a Government SEP 1989
Installation
52.229-3 Federal, State, and Local Taxes JAN 1991
52.229-5 Taxes - Contracts Performed in U.S. APR 1984
Possessions or Puerto Rico
52.232-1 Payments APR 1984
52.232-8 Discounts for Prompt Payment APR 1989
52.232-9 Limitation on Withholding of APR 1984
Payments
52.232-11 Extras APR 1984
52.232-17 Interest JAN 1991
52.232-18 Availability of Funds APR 1984
52.232-19 Availability of Funds APR 1984
for the Next Fiscal Year
52.232-23 Assignment of Claims JAN 1986
52.232-25 Prompt Payment MAR 1994
52.232-28 Electronic Funds Transfer Payment
Methods APR 1989
52.233-1 Disputes MAR 1994
52.233-3 Protest After Award AUG 1989
52.237-3 Continuity of Services JAN 1991
1-3
<PAGE>
SECTION I - CONTRACT CLAUSES
52.242-13 Bankruptcy APR 1991
52.243-1 Changes - Fixed-Price AUG 1987
52.244-1 Subcontracts (Fixed-Price APR 1991
Contracts)
52.244-5 Competition in Subcontracting APR 1984
52.249-2 Termination for Convenience of the APR 1984
Government (Fixed-Price)
52.249-8 Default (Fixed-Price Supply and APR 1984
Service)
1.2 Department of Health and Human Services Acquisition Regulations (HHSAR)
Incorporated by Reference (352.252-20)
Clauses No. Title and Date
352.202-1 Definitions APR 1984
352.215-12 Restriction of Disclosure and Use APR 1984
of Data
352.224-70 Confidentiality of Information APR 1984
352.232-9 Withholding of Contract Payments APR 1984
352.249-14 Excusable Delays APR 1984
352.270-1 Accessibility of Meetings, Conferences
and Seminars to Persons with
Disabilities APR 1984
352.270-4 Pricing of Adjustments APR 1984
352.270-7 Paperwork Reduction Act APR 1984
1.3 FEDERAL INFORMATION RESOURCES MANAGEMENT REGULATION CLAUSES
Clauses No. Title and Date
201-39.5202-6 Warranty Exclusion and Limitation of OCT 1990
Damages
201-39.5202-5 Privacy or Security Safeguards OCT 1990
1-4
<PAGE>
SECTION I - CONTRACT CLAUSES
1.4 FAR 52.216-18, "ORDERING" (APR 1984)
(a) Any supplies and services to be furnished under this contract shall be
ordered by issuance of delivery orders by the individuals or
activities designated in the Schedule. Such orders may be issued from
date of contract award through 12 months. If options are exercised,
orders may be issued for two additional one year periods.
(b) All delivery orders are subject to the terms and conditions of this
contract. In the event of conflict between a delivery order and this
contract, the contract shall control.
(c) If mailed, a delivery order is considered "issued" when the Government
deposits the order in the mail. Orders may be issued orally or by
written telecommunications only if authorized in the Schedule.
1.5 FAR 52.216-19 "DELIVERY-ORDER LIMITATIONS" (APR 1984)
(a) Minimum order. When the Government requires supplies or services
covered by this contract in an amount of less than $50.00, the
Government is not obligated to purchase or lease, nor is the
Contractor obligated to furnish, those supplies or services under the
contract.
(b) Maximum order. The Contractor is not obligated to honor-
(1) Any order for a single item in excess of 2000 workstations; or
(2) Any order for a combination of item in excess of 2000
workstations plus $3,907,111; or
(3) A series of orders from the same ordering office within 30 days
that together call for quantities exceeding the limitation in
subparagraph (1) or (2) above.
(c) If this is a requirements contract (i.e., includes the Requirements
clause at subsection 52.216-21 of the Federal Acquisition Regulation
(FAR), the Government is not required to order a part of any one
requirement from the Contractor if that requirement exceeds the
maximum-order limitation in paragraph (b) above.
1-5
<PAGE>
SECTION I - CONTRACT CLAUSES
1.6 FAR 52.216-22 INDEFINITE QUANTITY (APR 1984)
(a) This is an indefinite quantity contract for the supplies or services
specified, and effective for the period stated, in the Schedule. The
quantities of supplies and services specified in the Schedule are
estimates only and are not purchased by this contract.
(b) Delivery or performance shall be made only as authorized by orders
issued in accordance with the Ordering clause. The Contractor shall
furnish to the Government, when and if ordered, the supplies or
services specified in the Schedule up to and including the quantity
designated in the Schedule as the "maximum." The Government shall
order at least the quantity of supplies or services designated in the
Schedule as the "minimum."
(c) Except for any limitations on quantities in the Delivery-Order
Limitations clause or in the Schedule, there is no limit on the number
of orders that may be issues.
(d) Any order issued during the effective period of this contract and not
completed within that period shall be completed by the Contractor
within the time specified in the order. The contract shall govern the
Contractor's and Government's rights and obligations with respect to
that order to the same extent as if the order were completed during
the contract's effective period; provided, that the Contractor shall
not be required to make any deliveries under this contract after 12
months or if options are exercised, after 36 months.
1.7 CONTRACT OPTIONS TO EXTEND OR INCREASE QUANTITY
1.7.1 FAR 52.217-9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 1989)
(a) The Government may extend the term of this contract by written notice
to the Contractor upon completion of the contract period of
performance; provided, that the Government shall give the Contractor a
preliminary written notice of its intent to extend at least 60 days
before the contract expires. The preliminary notice does not commit
the Government to an extension.
(b) If the Government exercises this option, the extended contract shall
be considered to include this option provision.
1-6
<PAGE>
SECTION I - CONTRACT CLAUSES
(c) The total duration of this contract, including the exercise of any
options under this clause, shall not exceed 36 months.
1.7.2 Optional Quantity For Employee Purchases
The Government may require the delivery of the Employee Purchases,
identified in the Schedule as an option item, at the prices stated in the
Schedule. The Contracting Officer may exercise the option by written notice
to the Contractor at any time during the contract period of performance.
Delivery of added items shall continue at the same rate that like items are
called for under the contract, unless the parties otherwise agree.
1-7
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated December 13, 1996 (except Notes 1, 10 and 11, as to
which the date is January 14, 1997), in Amendment No. 2 to the Registration
Statement (Form SB-2 No. 333-19635) and related Prospectus of Dunn Computer
Corporation for the registration of 1,000,000 shares of its common stock.
/S/ ERNST & YOUNG LLP
Vienna, Virginia
April 3, 1997
<PAGE>
EXHIBIT 23.3
CONSENT OF FEDERAL COMPUTER WEEK
We consent to the reference to our publication in Amendment No. 1 (pages 2,
23) to Dunn Computer Corporation's Registration Statement (Form SB-7. No.
333-19635) and related Prospectus of Dunn Computer Corporation for the
registration of 1,000,000 shares of its Common Stock.
FEDERAL COMPUTER WEEK
By: /s/ DOUGLAS J. MASTIKURI
--------------------------------------
Douglas J. Mastikuri
March 24, 1997
<PAGE>
DUNN COMPUTER CORPORATION
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this ___ day of _______, 1997 by and
between DUNN COMPUTER CORPORATION, a Delaware corporation, having an office
at 1306 Squire Court, Sterling, Virginia 20166 (hereinafter referred to as
"Employer") and JOHN D. VAZZANA, an individual residing at
(hereinafter referred to as "Employee");
W I T N E S S E T H:
WHEREAS, Employer employs, and desires to continue to employ,
Employee as Executive Vice President and Chief Financial Officer of Employer;
and
WHEREAS, Employee is willing to continue to be employed as the
Executive Vice President and Chief Executive Officer in the manner provided
for herein, and to perform the duties of the Executive Vice President and
Chief Financial Officer of Employer upon the terms and conditions herein set
forth;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein set forth it is agreed as follows:
1. Employment of Executive Vice President and Chief Financial
Officer. Employer hereby employs Employee as Executive Vice President and
Chief Financial Officer.
2. Term.
a. Subject to Section 10 below and further subject to Section
2(b) below, the term of this Agreement shall commence on ________, 1997 and
end on , 2000. Each 12 month period from the date of this
Agreement forward during the term hereof shall be referred to as an "Annual
Period." During the term hereof, Employee shall devote substantially all of
his business time and efforts to Employer and its subsidiaries and
affiliates.
<PAGE>
b. Subject to Section 10 below, unless the Board of Directors
of the Company (the "Board") of Employer shall determine to the contrary and
shall so notify Employee in writing on or before the end of any Annual Period
or unless the Employee notifies Employer in writing on or before the end of
any Annual Period of his desire not to renew this Agreement, then at the end
of each Annual Period, the term of this Agreement shall be automatically
extended for one (1) additional Annual Period to be added at the end of the
then current term of this Agreement.
3. Duties. The Employee shall perform those functions generally
performed by persons of such title and position, shall attend all meetings of
the stockholders and the Board, shall perform any and all related duties and
shall have any and all powers as may be prescribed by resolution of the
Board, and shall be available to confer and consult with and advise the
officers and directors of Employer at such times that may be required by
Employer. Employee shall report directly and solely to the Board.
4. Compensation.
a. (i) Employee shall be paid a minimum of $240,000 for each
Annual Period thereafter. Employee shall be paid periodically in accordance
with the policies of the Employer during the term of this Agreement, but not
less than monthly.
(ii) Employee is eligible for an annual bonus, if any,
which will be determined and paid in accordance with policies set from time
to time by the Board. The annual bonus which the Employee is eligible for
may not exceed (a) five percent of the Employer's pre-tax income for the
Company's preceding fiscal year; or (b) $250,000.
b. (i) In the event of a "Change of Control" whereby
(A) A person (other than a person who is an officer or a
Director of Employer on the effective date hereof), including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes,
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<PAGE>
or obtains the right to become, the beneficial owner of Employer securities
having 30% or more of the combined voting power of then outstanding
securities of the Employer that may be cast for the election of directors of
the Employer;
(B) At any time, the Board-nominated slate of candidates
for the Board is not elected;
(C) Employer consummates a merger in which it is not the
surviving entity;
(D) Substantially all of Employer's assets are sold; or
(E) Employer's stockholders approve the dissolution or
liquidation of Employer; then
(ii) (A) Employee shall be eligible to receive a one-time
bonus, equal on an after-tax basis to two times his then current annual base
salary. To effectuate this provision, the bonus shall be "grossed-up" to
include the amount necessary to reimburse Employee for his federal, state and
local income tax liability on the bonus and on the "gross-up" at the
respective effective marginal tax rates. In no event shall this bonus exceed
three times Employee's then current base salary. Said bonus shall be paid
within thirty (30) days of the Change of Control.
(B) All stock options, warrants and stock
appreciation rights ("Rights") granted by Employer to Employee under any plan
or otherwise prior to the effective date of the Change of Control, shall
become vested, accelerate and become immediately exercisable. In the event
Employee owns or is entitled to receive any unregistered securities of
Employer, then Employer shall use its best efforts to affect the registration
of all such securities as soon as practicable, but no later than 120 days
after the effective date of the registration statement; provided, however,
that such period may be extended or delayed by Employer for one period of up
to 60 days if, upon the advice of counsel at the time such registration is
required to be filed, or at the time Employer is required to exercise its
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<PAGE>
best efforts to cause such registration statement to become effective, such
delay is advisable and in the best interests of Employer because of the
existence of non-public material information, or to allow Employer to
complete any pending audit of its financial statements;
c. Employer shall include Employee in its health insurance
program available to Employer's executive officers and shall pay 100% of the
premiums for such program.
d. Employee shall have the right to participate in any other
employee benefit plans established by Employer.
e. Employee shall be entitled to a car allowance whereby the
Employer will pay the Employee $1,000 per month to offset Employee's related
costs, which sums shall be payable quarterly.
5. Board of Directors. Employer agrees that so long as this
Agreement is in effect, Employee will be nominated to the Board as part of
management's slate of Directors.
6. Expenses. Employee shall be reimbursed for all of his actual
out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are acceptable to Employer, which approval shall not
be unreasonably withheld, for business related travel and entertainment
expenses, and that Employee shall submit to Employer reasonably detailed
receipts with respect thereto.
7. Vacation. Employee shall be entitled to receive
[four (4) weeks] paid vacation time after each year of employment upon dates
agreed upon by Employer. Upon separation of employment, for any reason,
vacation time accrued and not used shall be paid at the salary rate of
Employee in effect at the time of employment separation.
8. Secrecy. At no time shall Employee disclose to anyone any
confidential or secret information (not already constituting information
available to the public) concerning (a) internal affairs or proprietary
business operations of Employer or (b) any trade secrets, new product
-4-
<PAGE>
developments, patents, programs or programming, especially unique processes
or methods.
9. Covenant Not to Compete. Subject to, and limited by, Section
11(b), Employee will not, at any time, anywhere in the world, during the term
of this Agreement, and for one (1) year thereafter, either directly or
indirectly, engage in, with or for any enterprise, institution, whether or
not for profit, business, or company, competitive with the business (as
identified herein) of Employer as such business may be conducted on the date
thereof, as a creditor, guarantor, or financial backer, stockholder,
director, officer, consultant, advisor, employee, member, inventor, producer,
director, or otherwise of or through any corporation, partnership,
association, sole proprietorship or other entity; provided, that an
investment by Employee, his spouse or his children is permitted if such
investment is not more than four percent (4%) of the total debt or equity
capital of any such competitive enterprise or business and further provided
that said competitive enterprise or business is a publicly held entity whose
stock is listed and traded on a national stock exchange or through the NASDAQ
Stock Market. As used in this Agreement, the business of Employer shall be
deemed to include the manufacturing and marketing of computer systems.
10. Termination.
a. Termination by Employer
(i) Employer may terminate this Agreement upon written
notice for Cause. For purposes hereof, "Cause" shall mean (A) engaging by
the Employee in conduct that constitutes activity in competition with
Employer; (B) the conviction of Employee for the commission of a felony;
and/or (C) the habitual abuse of alcohol or controlled substances.
Notwithstanding anything to the contrary in this Section 10(a)(i), Employer
may not terminate Employee's employment under this Agreement for Cause unless
Employee shall have first received notice from the Board advising Employee of
the specific acts or omissions alleged to constitute Cause, and such acts or
omissions continue after Employee shall have had a reasonable opportunity (at
least 10 days from the date Employee receives the notice from the Board) to
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<PAGE>
correct the acts or omissions so complained of. In no event shall alleged
incompetence of Employee in the performance of Employee's duties be deemed
grounds for termination for Cause.
(ii) Employer may terminate Employee's employment under
this Agreement if, as a result of any physical or mental disability, Employee
shall fail or be unable to perform his duties under this Agreement for any
consecutive period of 90 days during any twelve-month period. If Employee's
employment is terminated under this Section 10(a)(ii): (A) for the first six
months after termination, Employee shall be paid 100% of his full
compensation under Section 4(a) of this Agreement at the rate in effect on
the date of termination, and in each successive 12 month period thereafter
Employee shall be paid an amount equal to 67% of his compensation under
Section 4(a) of this agreement at the rate in effect on the date of
termination; and (B) Employee shall continue to be entitled, insofar as is
permitted under applicable insurance policies or plans, to such general
medical and employee benefit plans (including profit sharing or pension
plans) as Employee had been entitled to on the date of termination. Any
amounts payable by Employer to Employee under this paragraph shall be reduced
by the amount of any disability payments payable by or pursuant to plans
provided by Employer and actually paid to Employee.
(iii) This agreement automatically shall terminate
upon the death of Employee, except that Employee's estate shall be entitled
to receive any amount accrued under Section 4(a) and the pro-rata amount
payable under [Section 4(e)] for the period prior to Employee's death and any
other amount to which Employee was entitled of the time of his death.
b. Termination by Employee
(i) Employee shall have the right to terminate his
employment under this Agreement upon 30 days' notice to Employer given within
90 days following the occurrence of any of the following events (A) through
(F) or within three years following the occurrence of event (G):
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<PAGE>
(A) Employee is not elected or retained as Executive
Vice President and Chief Financial Officer.
(B) Employer acts to materially reduce Employee's
duties and responsibilities hereunder. Employee's duties and
responsibilities shall not be deemed materially reduced for purposes hereof
solely by virtue of the fact that Employer is (or substantially all of its
assets are) sold to, or is combined with, another entity, provided that
Employee shall continue to have the same duties and responsibilities with
respect to Employer's business, and Employee shall report directly to the
chief executive officer and/or board of directors of the entity (or
individual) that acquires Employer or its assets.
(C) Employer acts to change the geographic location
of the performance of Employee's duties from the Washington, D.C.
Metropolitan area. For purposes of this Agreement, the Washington D.C.
Metropolitan area shall be deemed to be the area within 60 miles of
Washington, D.C.
(D) A Material Reduction (as hereinafter defined) in
Employee's rate of base compensation, or Employee's other benefits.
"Material Reduction" shall mean a ten percent (10%) differential;
(E) A failure by Employer to obtain the assumption
of this Agreement by any successor;
(F) A material breach of this Agreement by Employer,
which is not cured within thirty (30) days of written notice of such breach
by Employer;
(G) A Change of Control.
(ii) Anything herein to the contrary notwithstanding,
Employee may terminate this Agreement upon thirty (30) days written notice.
c. If Employer shall terminate Employee's employment other
than due to his death or disability or for Cause (as defined in Section
10(a)(i) of this Agreement), or if Employee shall terminate this Agreement
-7-
<PAGE>
under Section 10(b)(i), Employer's obligations under Section 4 shall be
absolute and unconditional and not subject to any offset or counterclaim and
Employee shall continue to be entitled to receive all amounts provided for by
Section 4 and all additional employee benefits under Section 4 regardless of
the amount of compensation he may earn with respect to any other employment
he may obtain.
11. Consequences of Breach by Employer;
Employment Termination
a. If this Agreement is terminated pursuant to Section
10(b)(i) hereof, or if Employer shall terminate Employee's employment under
this Agreement in any way that is a breach of this Agreement by Employer, the
following shall apply:
(i) Employee shall receive as a bonus, and in addition to
his salary continuation pursuant to Section 10.c., above, a cash payment
equal to the Employee's total base salary as of the date of termination
hereunder for the remainder of the term plus an additional amount to pay all
federal, state and local income taxes thereon on a grossed-up basis as
heretofore provided, payable within 30 days of the date of such termination.
(ii) Employee shall be entitled to payment of any
previously declared bonus and additional compensation as provided in Section
4(a) and (b) above.
b. In the event of termination of Employee's employment
pursuant to Section 10(b)(i) of this Agreement, the provisions of Section 9
shall not apply to Employee.
12. Remedies
Employer recognizes that because of Employee's special talents,
stature and opportunities in the computer industry, and because of the
special creative nature of and compensation practices of said industry and
the material impact that individual projects can have on company's results of
operations, in the event of termination by Employer hereunder (except under
Section 10(a)(i) or (iii), or in the event of termination by Employee under
-8-
<PAGE>
Section 10(b)(i) before the end of the agreed term, the Employer acknowledges
and agrees that the provisions of this Agreement regarding further payments
of base salary, bonuses and the exercisability of Rights constitute fair and
reasonable provisions for the consequences of such termination, do not
constitute a penalty, and such payments and benefits shall not be limited or
reduced by amounts' Employee might earn or be able to earn from any other
employment or ventures during the remainder of the agreed term of this
Agreement.
13. Excise Tax. In the event that any payment or benefit
received or to be received by Employee in connection with a termination of
his employment with Employer would constitute a "parachute payment" within
the meaning of Code Section 280G or any similar or successor provision to
280G and/or would be subject to any excise tax imposed by Code Section 4999
or any similar or successor provision then Employer shall assume all
liability for the payment of any such tax and Employer shall immediately
reimburse Employee on a "grossed-up" basis for any income taxes attributable
to Employee by reason of such Employer payment and reimbursements.
14. Arbitration. Any controversies between Employer and Employee
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, save and except for any breaches arising out of
Sections 8 and 9 hereof, shall on the written request of either party served
on the other be submitted to arbitration. Such arbitration shall comply with
and be governed by the rules of the American Arbitration Association. An
arbitration demand must be made within one (1) year of the date on which the
party demanding arbitration first had notice of the existence of the claim to
be arbitrated, or the right to arbitration along with such claim shall be
considered to have been waived. An arbitrator shall be selected according to
the procedures of the American Arbitration Association. The cost of
arbitration shall be born by the losing party or in such proportions as the
arbitrator shall decide. The arbitrator shall have no authority to add to,
subtract from or otherwise modify the provisions of this Agreement, or to
award punitive damages to either party.
-9-
<PAGE>
15. Attorneys' Fees and Costs. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which he may be
entitled.
16. Entire Agreement; Survival. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement or
understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this
Agreement shall not effect the enforceability of any other provision. This
Agreement may not be amended except by an agreement in writing signed by the
Employee and the Employer, or any waiver, change, discharge or modification
as sought. Waiver of or failure to exercise any rights provided by this
Agreement and in any respect shall not be deemed a waiver of any further or
future rights.
b. The provisions of Sections 4, 8, 9, 10(a)(ii), 10(a)(iii),
10(c), 11, 12, 13, 14, 15, 18, 19 and 20 shall survive the termination of
this Agreement.
17. Assignment. This Agreement shall not be assigned to other
parties.
18. Governing Law. This Agreement and all the amendments hereof,
and waivers and consents with respect thereto shall be governed by the
internal laws of the State of Virginia, without regard to the conflicts of
laws principles thereof.
19. Notices. All notices, responses, demands or other
communications under this Agreement shall be in writing and shall be deemed
to have been given when
a. delivered by hand;
b. sent be telex or telefax, (with receipt confirmed),
provided that a copy is mailed by registered or certified mail, return
receipt requested; or
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<PAGE>
c. received by the addressee as sent be express delivery
service (receipt requested) in each case to the appropriate addresses, telex
numbers and telefax numbers as the party may designate to itself by notice to
the other parties:
(i) if to the Employer:
Dunn Computer Corporation
1306 Squire Court
Sterling, Virginia 20166
Attention: Thomas P. Dunne
Telefax: (703) 450-0406
Telephone: (703) 450-0400
Gersten, Savage, Kaplowitz, Fredericks &
Curtin
101 East 52nd Street
9th Floor
New York, New York 10022
Attention: Jay M. Kaplowitz, Esq.
Telefax: (212) 980-5192
Telephone: (212) 752-9700
(ii) if to the Employee:
John D. Vazzana
[ ]
[ ]
20. Severability of Agreement. Should any part of this Agreement
for any reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which
remaining provisions shall remain in full force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated, and
it is hereby declared the intention of the parties that they would have
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<PAGE>
executed the remaining portions of this Agreement without including any such
part, parts or portions which may, for any reason, be hereafter declared
invalid.
IN WITNESS WHEREOF, the undersigned have executed this
agreement as of the day and year first above written.
DUNN COMPUTER CORPORATION
By:--------------------------------
Thomas P. Dunne
President
--------------------------------
John D. Vazzana
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<PAGE>
DUNN COMPUTER CORPORATION
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this ___ day of _______, 1997 by and
between DUNN COMPUTER CORPORATION, a Delaware corporation, having an office
at 1306 Squire Court, Sterling, Virginia 20166 (hereinafter referred to as
"Employer") and THOMAS P. DUNNE, an individual with an address c/o Dunn
Computer Corporation, 1306 Squire Court, Sterling, Virginia 20166
(hereinafter referred to as "Employee");
W I T N E S S E T H:
WHEREAS, Employer employs, and desires to continue to employ, Employee
as Chief Executive Officer, Chairman and President of Employer; and
WHEREAS, Employee is willing to continue to be employed as the Chief
Executive Officer, Chairman and President in the manner provided for herein,
and to perform the duties of the Chief Executive Officer, Chairman and
President of Employer upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth it is agreed as follows:
1. Employment of Executive Vice President and Chief Financial
Officer. Employer hereby employs Employee as Chief Executive Officer,
Chairman and President.
2. Term.
a. Subject to Section 10 below and further subject to Section
2(b) below, the term of this Agreement shall commence on the effective date
of the Company's Registration Statement (the "Commencement Date") and expire
three years from such date. Each 12 month period from the Commencement Date
forward during the term hereof shall be referred to as an "Annual Period."
During the term hereof, Employee shall devote substantially all of his
business time and efforts to Employer and its subsidiaries and affiliates.
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b. Subject to Section 10 below, unless the Board of Directors
of the Company (the "Board") of Employer shall determine to the contrary and
shall so notify Employee in writing on or before the end of any Annual Period
or unless the Employee notifies Employer in writing on or before the end of
any Annual Period of his desire not to renew this Agreement, then at the end
of each Annual Period, the term of this Agreement shall be automatically
extended for one (1) additional Annual Period to be added at the end of the
then current term of this Agreement.
3. Duties. The Employee shall perform those functions generally
performed by persons of such title and position, shall attend all meetings of
the stockholders and the Board, shall perform any and all related duties and
shall have any and all powers as may be prescribed by resolution of the
Board, and shall be available to confer and consult with and advise the
officers and directors of Employer at such times that may be required by
Employer. Employee shall report directly and solely to the Board.
4. Compensation.
a. (i) Employee shall be paid a minimum of $240,000 for each
Annual Period thereafter. Employee shall be paid periodically in accordance
with the policies of the Employer during the term of this Agreement, but not
less than monthly.
(ii) Employee is eligible for an annual bonus, if any,
which will be determined and paid in accordance with policies set from time
to time by the Board. The annual bonus which the Employee is eligible for
may not exceed (a) five percent of the Employer's pre-tax income for the
Company's preceding fiscal year; or (b) $250,000.
b. (i) In the event of a "Change of Control" whereby
(A) A person (other than a person who is an officer or a
Director of Employer on the effective date hereof), including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes,
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or obtains the right to become, the beneficial owner of Employer securities
having 30% or more of the combined voting power of then outstanding
securities of the Employer that may be cast for the election of directors of
the Employer;
(B) At any time, the Board-nominated slate of candidates
for the Board is not elected;
(C) Employer consummates a merger in which it is not the
surviving entity;
(D) Substantially all of Employer's assets are sold; or
(E) Employer's stockholders approve the dissolution or
liquidation of Employer; then
(ii) (A) Employee shall be eligible to receive a one-time
bonus, equal on an after-tax basis to two times his then current annual base
salary. To effectuate this provision, the bonus shall be "grossed-up" to
include the amount necessary to reimburse Employee for his federal, state and
local income tax liability on the bonus and on the "gross-up" at the
respective effective marginal tax rates. In no event shall this bonus exceed
three times Employee's then current base salary. Said bonus shall be paid
within thirty (30) days of the Change of Control.
(B) All stock options, warrants and stock
appreciation rights ("Rights") granted by Employer to Employee under any plan
or otherwise prior to the effective date of the Change of Control, shall
become vested, accelerate and become immediately exercisable. In the event
Employee owns or is entitled to receive any unregistered securities of
Employer, then Employer shall use its best efforts to affect the registration
of all such securities as soon as practicable, but no later than 120 days
after the effective date of the registration statement; provided, however,
that such period may be extended or delayed by Employer for one period of up
to 60 days if, upon the advice of counsel at the time such registration is
required to be filed, or at the time Employer is required to exercise its
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best efforts to cause such registration statement to become effective, such
delay is advisable and in the best interests of Employer because of the
existence of non-public material information, or to allow Employer to
complete any pending audit of its financial statements;
c. Employer shall include Employee in its health insurance
program available to Employer's executive officers and shall pay 100% of the
premiums for such program.
d. Employee shall have the right to participate in any other
employee benefit plans established by Employer.
e. Employee shall be entitled to a car provided to him by the
Company and the Company will pay all insurance and maintenance and expenses
in connection therewith.
f. The Company shall be responsible for and pay all costs
associated with Employer's country club membership.
5. Board of Directors. Employer agrees that so long as this
Agreement is in effect, Employee will be nominated to the Board as part of
management's slate of Directors.
6. Expenses. Employee shall be reimbursed for all of his actual
out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are acceptable to Employer, which approval shall not
be unreasonably withheld, for business related travel and entertainment
expenses, and that Employee shall submit to Employer reasonably detailed
receipts with respect thereto.
7. Vacation. Employee shall be entitled to receive four (4) weeks
paid vacation time after each year of employment upon dates agreed upon by
Employer. Upon separation of employment, for any reason, vacation time
accrued and not used shall be paid at the salary rate of Employee in effect
at the time of employment separation.
8. Secrecy. At no time shall Employee disclose to anyone any
confidential or secret information (not already constituting information
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available to the public) concerning (a) internal affairs or proprietary
business operations of Employer or (b) any trade secrets, new product
developments, patents, programs or programming, especially unique processes
or methods.
9. Covenant Not to Compete. Subject to, and limited by, Section
11(b), Employee will not, at any time, anywhere in the world, during the term
of this Agreement, and for one (1) year thereafter, either directly or
indirectly, engage in, with or for any enterprise, institution, whether or
not for profit, business, or company, competitive with the business (as
identified herein) of Employer as such business may be conducted on the date
thereof, as a creditor, guarantor, or financial backer, stockholder,
director, officer, consultant, advisor, employee, member, inventor, producer,
director, or otherwise of or through any corporation, partnership,
association, sole proprietorship or other entity; provided, that an
investment by Employee, his spouse or his children is permitted if such
investment is not more than four percent (4%) of the total debt or equity
capital of any such competitive enterprise or business and further provided
that said competitive enterprise or business is a publicly held entity whose
stock is listed and traded on a national stock exchange or through the NASDAQ
Stock Market. As used in this Agreement, the business of Employer shall be
deemed to include the manufacturing and marketing of computer systems.
10. Termination.
a. Termination by Employer
(i) Employer may terminate this Agreement upon written
notice for Cause. For purposes hereof, "Cause" shall mean (A) engaging by
the Employee in conduct that constitutes activity in competition with
Employer; (B) the conviction of Employee for the commission of a felony;
and/or (C) the habitual abuse of alcohol or controlled substances.
Notwithstanding anything to the contrary in this Section 10(a)(i), Employer
may not terminate Employee's employment under this Agreement for Cause unless
Employee shall have first received notice from the Board advising Employee of
the specific acts or omissions alleged to constitute Cause, and such acts or
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omissions continue after Employee shall have had a reasonable opportunity (at
least 10 days from the date Employee receives the notice from the Board) to
correct the acts or omissions so complained of. In no event shall alleged
incompetence of Employee in the performance of Employee's duties be deemed
grounds for termination for Cause.
(ii) Employer may terminate Employee's employment under
this Agreement if, as a result of any physical or mental disability, Employee
shall fail or be unable to perform his duties under this Agreement for any
consecutive period of 90 days during any twelve-month period. If Employee's
employment is terminated under this Section 10(a)(ii): (A) for the first six
months after termination, Employee shall be paid 100% of his full
compensation under Section 4(a) of this Agreement at the rate in effect on
the date of termination, and in each successive 12 month period thereafter
Employee shall be paid an amount equal to 67% of his compensation under
Section 4(a) of this agreement at the rate in effect on the date of
termination; and (B) Employee shall continue to be entitled, insofar as is
permitted under applicable insurance policies or plans, to such general
medical and employee benefit plans (including profit sharing or pension
plans) as Employee had been entitled to on the date of termination. Any
amounts payable by Employer to Employee under this paragraph shall be reduced
by the amount of any disability payments payable by or pursuant to plans
provided by Employer and actually paid to Employee.
(iii) This agreement automatically shall terminate
upon the death of Employee, except that Employee's estate shall be entitled
to receive any amount accrued under Section 4(a) and the pro-rata amount
payable under Section 4(e) for the period prior to Employee's death and any
other amount to which Employee was entitled of the time of his death.
b. Termination by Employee
(i) Employee shall have the right to terminate his
employment under this Agreement upon 30 days' notice to Employer given within
90 days following the occurrence of any of the following events (A) through
(F) or within three years following the occurrence of event (G):
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(A) Employee is not elected or retained as Chief
Executive Officer, Chairman and President.
(B) Employer acts to materially reduce Employee's
duties and responsibilities hereunder. Employee's duties and
responsibilities shall not be deemed materially reduced for purposes hereof
solely by virtue of the fact that Employer is (or substantially all of its
assets are) sold to, or is combined with, another entity, provided that
Employee shall continue to have the same duties and responsibilities with
respect to Employer's business, and Employee shall report directly to the
chief executive officer and/or board of directors of the entity (or
individual) that acquires Employer or its assets.
(C) Employer acts to change the geographic location
of the performance of Employee's duties from the Washington, D.C.
Metropolitan area. For purposes of this Agreement, the Washington D.C.
Metropolitan area shall be deemed to be the area within 60 miles of
Washington, D.C.
(D) A Material Reduction (as hereinafter defined) in
Employee's rate of base compensation, or Employee's other benefits.
"Material Reduction" shall mean a ten percent (10%) differential;
(E) A failure by Employer to obtain the assumption
of this Agreement by any successor;
(F) A material breach of this Agreement by Employer,
which is not cured within thirty (30) days of written notice of such breach
by Employer;
(G) A Change of Control.
(ii) Anything herein to the contrary notwithstanding,
Employee may terminate this Agreement upon thirty (30) days written notice.
c. If Employer shall terminate Employee's employment other
than due to his death or disability or for Cause (as defined in Section
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10(a)(i) of this Agreement), or if Employee shall terminate this Agreement
under Section 10(b)(i), Employer's obligations under Section 4 shall be
absolute and unconditional and not subject to any offset or counterclaim and
Employee shall continue to be entitled to receive all amounts provided for by
Section 4 and all additional employee benefits under Section 4 regardless of
the amount of compensation he may earn with respect to any other employment
he may obtain.
11. Consequences of Breach by Employer; Employment
Termination
a. If this Agreement is terminated pursuant to Section
10(b)(i) hereof, or if Employer shall terminate Employee's employment under
this Agreement in any way that is a breach of this Agreement by Employer, the
following shall apply:
(i) Employee shall receive as a bonus, and in addition to
his salary continuation pursuant to Section 10.c., above, a cash payment
equal to the Employee's total base salary as of the date of termination
hereunder for the remainder of the term plus an additional amount to pay all
federal, state and local income taxes thereon on a grossed-up basis as
heretofore provided, payable within 30 days of the date of such termination.
(ii) Employee shall be entitled to payment of any
previously declared bonus and additional compensation as provided in Section
4(a) and (b) above.
b. In the event of termination of Employee's employment
pursuant to Section 10(b)(i) of this Agreement, the provisions of Section 9
shall not apply to Employee.
12. Remedies
Employer recognizes that because of Employee's special talents,
stature and opportunities in the computer industry, and because of the
special creative nature of and compensation practices of said industry and
the material impact that individual projects can have on company's results of
operations, in the event of termination by Employer hereunder (except under
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Section 10(a)(i) or (iii), or in the event of termination by Employee under
Section 10(b)(i) before the end of the agreed term, the Employer acknowledges
and agrees that the provisions of this Agreement regarding further payments
of base salary, bonuses and the exercisability of Rights constitute fair and
reasonable provisions for the consequences of such termination, do not
constitute a penalty, and such payments and benefits shall not be limited or
reduced by amounts' Employee might earn or be able to earn from any other
employment or ventures during the remainder of the agreed term of this
Agreement.
13. Excise Tax. In the event that any payment or benefit
received or to be received by Employee in connection with a termination of
his employment with Employer would constitute a "parachute payment" within
the meaning of Code Section 280G or any similar or successor provision to
280G and/or would be subject to any excise tax imposed by Code Section 4999
or any similar or successor provision then Employer shall assume all
liability for the payment of any such tax and Employer shall immediately
reimburse Employee on a "grossed-up" basis for any income taxes attributable
to Employee by reason of such Employer payment and reimbursements.
14. Arbitration. Any controversies between Employer and Employee
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, save and except for any breaches arising out of
Sections 8 and 9 hereof, shall on the written request of either party served
on the other be submitted to arbitration. Such arbitration shall comply with
and be governed by the rules of the American Arbitration Association. An
arbitration demand must be made within one (1) year of the date on which the
party demanding arbitration first had notice of the existence of the claim to
be arbitrated, or the right to arbitration along with such claim shall be
considered to have been waived. An arbitrator shall be selected according to
the procedures of the American Arbitration Association. The cost of
arbitration shall be born by the losing party or in such proportions as the
arbitrator shall decide. The arbitrator shall have no authority to add to,
subtract from or otherwise modify the provisions of this Agreement, or to
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award punitive damages to either party.
15. Attorneys' Fees and Costs. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which he may be
entitled.
16. Entire Agreement; Survival. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement or
understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this
Agreement shall not effect the enforceability of any other provision. This
Agreement may not be amended except by an agreement in writing signed by the
Employee and the Employer, or any waiver, change, discharge or modification
as sought. Waiver of or failure to exercise any rights provided by this
Agreement and in any respect shall not be deemed a waiver of any further or
future rights.
b. The provisions of Sections 4, 8, 9, 10(a)(ii), 10(a)(iii),
10(c), 11, 12, 13, 14, 15, 18, 19 and 20 shall survive the termination of
this Agreement.
17. Assignment. This Agreement shall not be assigned to other
parties.
18. Governing Law. This Agreement and all the amendments hereof,
and waivers and consents with respect thereto shall be governed by the
internal laws of the State of Virginia, without regard to the conflicts of
laws principles thereof.
19. Notices. All notices, responses, demands or other
communications under this Agreement shall be in writing and shall be deemed
to have been given when
a. delivered by hand;
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b. sent be telex or telefax, (with receipt confirmed),
provided that a copy is mailed by registered or certified mail, return
receipt requested; or
c. received by the addressee as sent be express delivery
service (receipt requested) in each case to the appropriate addresses, telex
numbers and telefax numbers as the party may designate to itself by notice to
the other parties:
(i) if to the Employer:
Dunn Computer Corporation
1306 Squire Court
Sterling, Virginia 20166
Attention: John D. Vazzana
Telefax: (703) 450-0406
Telephone: (703) 450-0400
Gersten, Savage, Kaplowitz, Fredericks &
Curtin
101 East 52nd Street
9th Floor
New York, New York 10022
Attention: Jay M. Kaplowitz, Esq.
Telefax: (212) 980-5192
Telephone: (212) 752-9700
(ii) if to the Employee:
Thomas P. Dunne
c/o Dunn Computer Corporation
1306 Squire Court
Sterling, Virginia 20166
20. Severability of Agreement. Should any part of this Agreement
for any reason be declared invalid by a court of competent jurisdiction, such
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decision shall not affect the validity of any remaining portion, which
remaining provisions shall remain in full force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated, and
it is hereby declared the intention of the parties that they would have
executed the remaining portions of this Agreement without including any such
part, parts or portions which may, for any reason, be hereafter declared
invalid.
IN WITNESS WHEREOF, the undersigned have executed this agreement as
of the day and year first above written.
DUNN COMPUTER CORPORATION
By:----------------------------
John D. Vazzana
Executive Vice President
--------------------------
Thomas P. Dunne
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