State Department cancels $16.5M Kindle contract

IDG News Service - The U.S Department of State has withdrawn plans to place a $16.5 million order on Amazon.com for its Kindle Touch devices along with content management, and logistics, stating that it intends to conduct additional market research and re-examine its requirements for the program.

The department had in June said that it intended to award the contract to Amazon.com, with an anticipated value of $16.5 million over the life of the contract, which would be one base year and four option years.

The acquisition by the department included an immediate need for 2,500 e-readers and 50 titles of content, and required provision of a secure, centrally managed content distribution and management platform to manage unlimited number of devices, besides the ability to access and download content over 3G cellular networks and Wi-Fi connections worldwide, according to a note in June.

The Kindle was identified as the only product that met the department's requirements, according to the Justification and Approval (J&A) for other than full and open competition. Apple's iPad was rejected because it fell under the tablet or computer category rather than as a single-function e-reader, and had additional features that "are not only unnecessary, but also present unacceptable security and usability risks for the government's needs in this particular project."

The Kindle also scored over some other e-readers on the market as the competitors could not provide the text-to-speech requirement, the long-lasting battery life and the free Wi-Fi with a global network that was required, the note said. The J&A had stated that "costs associated with downloading content either via 3G or Wi-Fi must be not separately priced."

The e-reader had to have a battery life of no less than about 8 hours of continuous reading or approximately 7.5 hours of video playback.

Amazon.com was not immediately available for comment on the cancellation of the order.