Contract Amendment
State of Arizona
State Procurement Office
Contract No.: ADSPO16-130652
PAGE 100 N. 15TH Avenue, Suite 402
Amendment No.: Eleven (11)
1 OF 1 Phoenix, AZ 85007
CONTRACTOR: STATE AGENCY:
CDWG Arizona Department of Administration
230 N. Milwaukee Ave
Vernon Hills, IL 60061
State Procurement Office
100 N. 15th Avenue, Suite 402
Phoenix, AZ 85007
CONTACT: Ann Reeves CONTACT: Rana Schultz
PHONE: 801-084-5352 X 65352 PHONE: (602) 542-2927
EMAIL: [email protected] EMAIL: [email protected]
Software Value Added Reseller (SVAR) NASPO Master Contract
Pursuant to NASPO Master Agreement Section 4: Lead State (ARIZONA) Terms and Conditions, Paragraph 5, Contract Changes, 5.1 Amendments, the above referenced Contract shall be amended as follows:
1. The term of this contract is hereby extended through July 31st, 2023.
2. All other Terms, Conditions, and Pricing remain the same.
This Contract Amendment is not binding against the State of Arizona unless signed by an authorized representative of the Contractor and then accepted in writing by an authorized representative of the State.
Contractor hereby acknowledges receipt and understanding of the above amendment.
The above referenced contract amendment is hereby
executed this date by the State.
Signature Date Signature Date
_____________________________________________________
John Redhorse, Statewide IT Procurement Leader
______________________________________________
Printed/Typed Name and Title Printed/Typed Name and Title
Feb 28, 2023
Brian Fisher
Director, Program Management
John Redhorse (Feb 28, 2023 13:12 PST)
John Redhorse (Feb 28, 2023 13:12 PST)
2/28/23
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 06/16/2023 | 3:08 PM PDT
5391821
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5401822
2 | Page
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5411823
Master Agreement
Table of Contents
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
Table of Contents
EXECUTED OFFER AND ACCEPTANCE FORM......................................................................................................... 2
TABLE OF CONTENTS ............................................................................................................................... .................. 3
SECTION 1: NASPO ValuePoint Solicitation ADSPO16-00005829 – GENERAL INCFORMATION ......................... 4
SECTION 2: SCOPE OF WORK .............................................................................................................................. ..... 7
SECTION 3: NASPO ValuePoint Master Agreement Terms and Conditions ......................................................... 22
SECTION 4: Lead State (State of Arizona) Terms and Conditions ........................................................................ 37
State of Arizona Special Terms and Conditions ....................................................................................... 37
State of Arizona Uniform Terms and Conditions ...................................................................................... 50
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5421824
Master Agreement
Section 1: General Information
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
1.1 Purpose
The State of Arizona, State Procurement Office, is requesting proposals for Software Value-Added Reseller (SVAR) services in furtherance of the NASPO ValuePoint Cooperation Purchasing Program (NASPO ValuePoint). The purpose of this Request for Proposal (RFP) is to establish Master Agreements with qualified Offerors so that NASPO ValuePoint Cooperative Members may acquire Commercial off the Shelf Software (COTS) and related services from Software Value-Added Resellers.
The objective of this RFP is to obtain best value, and in some cases achieve more favorable pricing, than is obtainable by an individual state or local government entity because of the collective volume of potential purchases by numerous state and local government entities. The Master Agreement(s) resulting from this procurement may be used by state governments (including departments, agencies, institutions), institutions of higher education, political subdivisions (i.e., colleges, school districts, counties, cities, etc.), the District of Colombia, territories of the United States, and other eligible entities subject to approval of the individuals state procurement director and compliance with local statutory and regulatory provisions, as explained in section 3 of the NASPO ValuePoint Master Agreement Terms and Conditions. The initial term of the Master Agreement shall be two (2) years with renewal provisions as outlined in Section 3 of the NASPO ValuePoint Master Terms and Conditions (Section 4).
1.2 Lead State, Solicitation Number and Lead State Contract Administrator (LSCA) The State of Arizona, State Procurement Office (SPO) is the Lead State and issuing office for this document and all subsequent addenda relating to it. This solicitation (RFP) is a competitive process, in accordance with the Arizona Procurement Code available at https://spo.az.gov/ . The Arizona Procurement Code is a compilation in one place of Arizona Revised Statutes (ARS) 41-2501 et seq. and administrative rules and regulations A.A.C R2-7-1010 et.seq. The Solicitation #ADSPO16- 00005829 must be referred to on all proposals, correspondence, and documentation relating to this RFP.
The Lead State Contract Administrator (LSCA) identified below is the single point of contact during this procurement process. Offerors and interested persons shall direct to the Lead State Contract Administrator all questions concerning the procurement process, technical requirements of this RFP, contractual requirements, requests for brand approval, change, clarification, protests, the award process, and any other questions that may arise related to this solicitation and the resulting Master Agreement. The Lead State Contract Administrator (LSCA) designated by the State of Arizona, State Procurement Office is:
Charlotte Righetti, CPPB, CTNS State Procurement Manager State of Arizona, State Procurement Office
100 N. 15
th Avenue, Suite 201
Phoenix, Arizona 85007
Phone: (602)542.9127
1.3 NASPO ValuePoint Background Information
NASPO ValuePoint (formerly known as WSCA-NASPO) is a cooperative purchasing program of all 50 states, the District of Columbia and the territories of the United States. The Program is facilitated by the NASPO Cooperative Purchasing Organization LLC , a nonprofit subsidiary of the National Association of State Procurement Officials (NASPO), doing business as NASPO ValuePoint. NASPO is a non-profit association dedicated to strengthening the procurement community through education, research, and communication. It is made up of the directors of the central purchasing offices in each DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5431825
Master Agreement
Section 1: General Information
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
5 | Page
of the 50 states, the District of Columbia and the territories of the United States. NASPO ValuePoint facilitates administration of the cooperative group contracting consortium of state chief procurement officials for the benefit of state departments, institutions, agencies, and political subdivisions and other eligible entities (i.e., colleges, school districts, counties, cities, some nonprofit organizations, etc.) for all states, the District of Columbia, and territories of the United States. For more information consult the following websites: www.naspovaluepoint.org and www.naspo.org .
1.4 Participating States
In addition to the Lead State conducting this solicitation, the Participating States listed below have requested to be named in this RFP as potential Users of the resulting Master Agreement. Other entities may become Participating Entities after award of the Master Agreement. State specific terms and conditions will govern each state’s Participating Addendum that will govern each state’s Participating Addendum. A listing of the Participating States can be found in Exhibit I.
1.5 Definitions – all capitalized terms in this document have the meaning as defined in AAC R2-7-101. Any capitalized term not defined in AAC R2-7-101 has the meaning defined below.
"Appliance" means a separate and discrete hardware device with integrated software (firmware), specifically designed to provide a specific computing resource. For the purposes of this solicitation only an “Appliance” which is the sole means of obtaining the Software product is allowable. “Attachment” means any item the Solicitation requires an Offeror to submit as part of the Offer. “Best and Final Offer (BAFO)” means a revision to an Offer submitted after negotiations are completed that contains the Offeror’s most favorable terms for price, service, and products to be delivered.
“Commercial Off the Shelf” (“COTS”) for the purposes of this solicitation means non-developmental software which has been created for specific uses and is available to the general public in the commercial marketplace. COTS products are designed to be implemented easily into existing systems without the need for customization.
“End-User License Agreement (EULA)” is a legal contract between the manufacturer (publisher) and the end User of an application that details how the software can and cannot be used. “eProcurement (Electronic Procurement)” means conducting all or some of the procurement function over the Internet. Point, click, buy and ship Internet technology is replacing paper-based procurement and supply management business processes. Elements of eProcurement also include Invitation for Bids, Request for Proposals, and Request for Quotations. “Excluded Software Publishers” means a Software Publisher who is unwilling to do business with a Reseller.
“Exhibit” means any document or object labeled as an Exhibit in the Solicitation or placed in the Exhibits section of the Solicitation.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5441826
Master Agreement
Section 1: General Information
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
6 | Page
“Lead State Contract Administrator” (“LSCA”) means the Procurement Officer for the Master Agreement.
“Master Agreement” (“MPA”) means the contractual agreement executed between the winning (awarded) contractor (s) and the Lead State conducting the procurement on behalf of NASPO ValuePoint.
“Non-perpetual license” or Subscription License” is a temporary license that provides the right to use a particular licensed product until the end of the license-agreement term. “Participating State Contract Administrator” (“PSCA”) means the Procurement Officer for the Participating State.
“Perpetual license” means a license which is everlasting and valid if the software is being used in accordance with the license-agreement requirements.
“Person” means any corporation, business, individual, union, committee, club, or other organization or group of individuals
“Publisher” means a software manufacturer (e.g., Microsoft) “Reseller” means a Software Value-Added Reseller who is awarded under this solicitation, and who has a fully-executed (MPA and PA-s) contract.
“Reseller Cost” means the price that the Reseller pays the Publisher or Distributor to purchase software on behalf of the Participating State. Reseller Cost should not include any administrative or other mark-up costs.
“Software” means the computer program, including media and associated documentation. “Software Licensing” means allowing an individual or group to use a piece of software. “Software Maintenance and Support” means any software upgrades, annual updates, patches and fixes needed to improve functionality and keep the software in working order. “Solicitation Amendment” means a change to the Solicitation issued by the Procurement Officer. “Volume License Agreements (VLAs)” means an agreement with a Software Publisher wherein the Participating State’s total expected purchasing over a period of time is considered in establishing the discount level.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5451827
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
7 | Page
2.1 Software Value-Added R eseller (‘Reseller’ – “SVAR”)
2.1.1 Software Value-Added Reseller (‘Reseller’ – “SVAR”) shall be a large account reseller authorized to sell products direct from Key Software Publishers or authorized Distributors.
2.1.2 SVAR shall do the following:
2.1.2.1 Provide Commercial Off-the-Shelf-Software (COTS).
2.1.2.2 Honor existing Volume or Enterprise license agreements.
2.1.2.3 Offer maintenance and support pack ages on licenses already owned by the Participating State and other Purchasing Entities.
2.1.2.4 Advise the LSCA, each PSCA, and other Purchasing Entities of SVAR’s channel partner status with Key Software Publishers.
2.1.2.5 Retain or enhance reseller certifications with software publishers - At a minimum, maintain Reseller certification levels held at time of award.
If Reseller’s certification or reseller status is withdrawn or reduced, Reseller is required to immediately notify, in writing, the Lead State Contract Administrator (LSCA), each PSCA and other Purchasing Entities explaining:
The change;
The impact on their costs to obtain the product;
Limitations on the products or services they may provide; and, The reasons for the change.
Failure to provide the required notification, regarding significant negative changes in their reseller status, may be grounds for suspension or cancellation of the MPA and PA’s.
2.1.2.6 Provide Pre-Sale Advisement - There shall be no charge for these services:
2.1.2.6.1 Advise the Purchasing Entity in making strategic software application decisions by providing evaluation copies, product comparisons, needs analysis, product information and application recommendations.
2.1.2.6.2 Act as liaison between the Purchasing Entity and individual publishers in identifying best approaches and cost savings opportunities for the Purchasing Entity.
2.1.1.6.3 Examples of such advice would be:
In selecting appropriate software;
In explaining Volume License Agreements with complicated rules; In determining the most cost-effective buying strategies; In ensuring that Participating States and other Purchasing Entities are in compliance with licensing requirements; and,
In finding software options to meet a specific need, for example, a flow-charting package.
2.1.2.7 Reseller shall negotiate to reduce Reseller Cost, to pass on savings to the Participating State and other Purchasing Entitites.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5461828
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
8 | Page
2.1.2.8 Provide assistance in explaining and developing Volume License and Enterprise Agreements.
2.1.2.9 Provide Software Installation Assistance.
2.1.2.9.1 Provide, at no additional cost, assistance or advice in basic installation or implementation of COTS product.
2.1.2.8.2 If the Purchasing Entity encounters difficulty in downloading or installing the software, the Reseller must provide assistance within eight (8) business hours of being informed of the problem.
2.1.2.10 Provide Software De-Installation Assistance.
2.1.2.11 Provide Tracking, Management, Us age Monitoring and Reporting of Licenses
2.1.2.11.1 Reseller shall have in place a product license inventory and asset management system, which will include an accurate inventory record of product licenses purchased under this Contract.
2.1.2.11.2 Reseller must also have the capability tracking maintenance renewal and other significant due dates.
2.1.2.11.3 At a minimum, this system shall be able to provide this information by Participating State and Purchasing Entity.
2.1.2.11.4 Reseller shall work with Participating State, other Purchasing Entities, publishers, previous and subsequent contract software resellers, and hardware computer contractors to ensure the most comprehensive record of licenses is created, maintained, and the information transferrable.
2.1.2.11.5 States may choose to award multiple PA’s under this Agreement.
Details on how licenses are to be tracked and managed under multiple awards will be determined by that awarding State.
2.1.2.11.6 As may be required by a Participating State, or other Purchasing Entity, Reseller shall work with NASPO ValuePoint computing equipment contractors, or a Participating State’s comparable computer hardware contractor, to see that any software acquired under those contracts can be tracked through this contract.
2.1.2.12 Notify Participating State and Purchasing Entities of publisher publicly announced changes pertinent to User licensing.
2.1.3 SVAR shall Develop and Maintain Website
2.1.3.1 For Participating States, Reseller shall develop and support a website specific to that State, with content approved from the LSCA or PSCA as appropriate based on content.
2.1.3.1.1 This web site information shall be available through the Internet without the use of additional software or licenses.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5471829
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
9 | Page
2.1.3.1.2 Website should be User friendly to allow for quick and easy access and use.
2.1.3.1.3 Website shall be available 24 x 7, except for scheduled maintenance.
2.1.3.1.4 Website shall be ADA compliant.
2.1.3.1.5 No costs or expenses associated with providing this information shall be charged to the States.
2.1.3.1.6 Universal Resource Locator (URL) for the website must be supplied to the PSCA and the LSCA within sixty (60) days of the execution of the PA.
2.1.3.1.7 The website will include contract information, product information/catalog, the capability to generate online reports, and other pertinent information as may be reasonably requested by States, such as copies of VLAs.
2.1.3.1.8 Publisher Notifications and Other Industry Information. In the event that a publisher publicly announces changes that are pertinent to User licensing, the Reseller shall assist Users by posting the information on the state websites.
2.1.3.1.9 Reseller shall provide, at no additional cost, training on how to use their website and how to use this contract in obtaining quotes and placing orders. Online training should be available on the website, but supplementary electronic (e.g. Webinars, emails), telephone or on-site training should be provided, as needed, during standard working hours.
2.1.3.2 Contract and General Information. The website shall provide contract and ordering information to include, at a minimum:
2.1.3.2.1 The contract number(s) (MPA and PA);
2.1.3.3.2 The Reseller primary contact and contacts to whom incidents are to be escalated:
Name(s and titles
Areas of responsibility for each contact name;
Phone number(s); and,
Email address(es).
2.1.3.3.3 Information on use of website,
2.1.3.3.4 Quote and ordering information; and,
2.1.3.3.5 Notifications regarding publishers and products, such as pending key product changes or upgrades.
2.1.3.3 Online Catalog
2.1.3.3.1 Reseller shall provide COTS software, and software maintenance of new or existing licensed software, under this contract. Information on approved products, customized by Participating State, will be available through an online catalog and through Reseller’s representatives either through email or telephone inquiry during the standard working hours of the Participating State. The online catalog shall provide an expansive list DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5481830
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
10 | Page
of products allowed per the contracts, particularly those products of itemized publishers.
2.1.3.3.2 The website shall provide contract and ordering information to include, at a minimum: publishers, product names, standard product pricing, and product descriptions (photos optional or links to access product literature).
Regardless of the number and types of links to the Reseller’s electronic catalog, the Reseller shall ensure that all eligible agencies purchasing under one PA are accessing the same current base version of the product catalog. Online information shall include purchases of Volume or Enterprise License Agreement software as well as individual COTS software licenses.
2.1.3.3.3 Online catalog shall be restricted to just software. Non-authorized products or groups of products shall not be on the website. Reseller shall not use this proposed website to cross sell or cross advertise other products and or services the Reseller may be able to offer.
2.1.3.4 Product Searching Capability. At a minimum, the online catalog should be searchable by Purchasing Entity and their VLAs, Software Publisher, Product name, OEM product number, and software description (e.g., GIS, Security). The online category can be modified as Users’ needs dictate, such as including products obtained through a distributor (non-itemized publisher products) that are frequently purchased.
2.1.3.5 Online Product Quotes. Product price displayed online is a ‘not-to-exceed’ product price quote based on contract rate and real time Reseller Cost. For high dollar purchases, or quantity purchases, Purchasing Entity should request a quote by contacting Reseller representative off-line. The online pricing should allow for overrides when a quote with a negotiated better price has been offered and is being placed online. Website should have capability to track all quotes by Purchasing Entity and be easily accessible for viewing by quote number. Website shall include a shopping cart feature that allows Purchasing Entities to provide shipping instructions.
Purchasing Entities can place orders on the web either via credit card or purchase order. Specifics regarding an individual state’s requirements for placing an order may be included in that State’s Participating Addendum (PA).
2.1.3.6 User Differentiation. Catalog should be designed so as to provide a means to identify the Participating State (state agency or other eligible Purchasing Entity). This method used must not require any administrative tasks on the part of the LSCA for the MPA, the PSCA for the individual PSCA. Website should allow Users to develop personal lists and profiles, including an option to securely store and maintain procurement card information. Catalog should have the capability of being used as a ‘Punch Out’ to an individual state’s electronic purchasing system.
2.1.3.7 Online Reports. Website shall have capability to provide order history, as well as order status and order tracking.
2.1.3.8 Other. Other information may be added to the website as may be required by State (such as copies of volume license agreements) or enhancements that may be proposed by Reseller and approved by State.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5491831
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
11 | Page
2.2 COTS Products
2.2.1 Software which requires little or no services
IN SCOPE Offerings OUT OF SCOPE Offerings
LICENSING TYPE COTS Individual Licensing
Volume Licensing
Enterprise Licensing
Custom/Customized
LICENSING
PERIOD
Perpetual Subscription none
Delivery Shrink-Wrap Download none
HOSTING
as part of delivery
& use.
On Premise Off Premise Managed Service
Managed Services means the
proactive management of an IT
(Information Technology) asset
or object, by a third party
typically known as a MSP, on
behalf of a customer
mspalliance.com/definition-of-
managed-services/
2.2.1.1 Most Current Version - Purchase orders shall be deemed to reference a manufacturer’s most recent release model or version of the product at the time of the order, unless the Purchasing Entity specifically requests in writing an earlier model or version and the Reseller is willing to provide such model or version.
2.2.1.2 Licenses and Maintenance Agreements
2.2.1.2.1 Volume License Agreements (VLA) and Enterprise License Agreements (ELA)
The Reseller will honor existing Participating State’s VLA’s or ELA’s with publishers and include those licenses as part of the Reseller’s license tracking service. Following an executed PA with a Participating State, and if so required by the Participating State, the Purchasing Entity and/or an individual publisher, the Reseller will identify itself to software publishers as Reseller for that Participating State or Purchasing Entity. If so required by the Publisher and Participating State, Reseller will execute a change of channel partner agreement with the Publisher. Resellers will sell additional seats consistent with Purchasing Entities’ Enterprise or Volume Agreements. Reseller will work with Participating State, Purchasing Entity(ies) and Publishers as needed to establish new VLAs or ELAs. The Reseller will work with the Publisher and Participating State as necessary to ensure the Participating State receives timely and pertinent license information, such as: license or agreement renewals, or opportunities based on actual volume.
Reseller will work directly with Purchasing Entity(ies) in establishing, signing and maintaining enrollment agreements. If Reseller is sole SVAR contractor in a State, Reseller will aggregate all enrollments together for DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5501832
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
12 | Page
Master Agreement reporting purposes. If a PSCA elects to have multiple SVAR contractors, Reseller’s responsibilities will be delineated in that State’s PA. Resellers shall monitor and be able to report on the current levels of software ordered towards any of the Participating State’s VLA required sales levels to ensure the Participating State does not fall short and thereby incur Publisher penalties. The Reseller shall be responsible for providing license usage information to the Publishers, if such information is required by the Publishers, in a timely manner (e.g., for ‘true up’ assessments)
2.2.1.2.2 Individual Software Licenses. Purchasing Entities can purchase individual COTS licenses, such as perpetual and non-perpetual licenses, through the Reseller.
2.2.1.3 Software Maintenance and Support Agreements.
Purchasing Entities can purchase maintenance agreements, including upgrade protection, through the Reseller. Resellers will sell software maintenance agreements, even if the software was not purchased under this agreement, such as on-going support for a User’s existing perpetual license. As requested, Reseller will explain what product support or services are included in a publisher’s maintenance agreement.
2.2.1.3.1 Software Maintenance and Support. Reseller to provide needed services to support maintenance products such maintenance agreements, software upgrades, annual updates, patches and fixes needed to improve functionality and keep the software in working order. Such services may include providing recommendations on most cost-effective or appropriate long-term maintenance plan. Reseller will provide such support, not only to maintenance packages purchases under this agreement, but in support of any existing and current agreements.
2.2.1.3.2 Software Updates.
2.2.1.3.2.1 Users are eligible to receive, from the Publisher, all new releases and updates of the software, at no additional
charge, while under a maintenance agreement. A “Release” means any collection of enhancements or updates which the Publisher generally makes available to its installed base of customers of such programs. The Reseller shall assist the Purchasing Entity to obtain such releases or updates for their Users from the Publisher.
2.2.1.3.2.2 Should a User not want to receive the next upgrade, the User shall so notify the respective Publisher.
2.2.1.3.3 License Confirmations
For licenses ordered under the contract by Purchasing Entity(ies), Reseller shall be able to provide:
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5511833
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
13 | Page
(i) Certified Licensing Confirmation Certificates for all software licenses;
(ii) Reseller’s certified license confirmation certificates in the name of such Licensee; or,
(iii) Written confirmation from the Reseller or Publisher accepting the Eligible Participating State’s contract or purchase order as proof of license.
The form of “Proof of License” provided must be acceptable proof to the Publisher, and in the format requested by the Purchasing Entity. The Proof of License shall be provided as an electronic file and/or a hardcopy document, as required by the Purchasing Entity. Reseller will retain an electronic file of Participating State’s Proof of Licenses and provide copies to the Participating State as requested.
2.2.1.3.4 Transitioning License Tracking Information at Contract Termination The license information data acquired and retained by Reseller will be stored as sortable data fields so the license information can be transferred to the Participating State upon contract termination. Reseller will work with States and Participating Entities, or their designees, to ensure that the license information data has been successfully transferred in a usable format.
2.2.1.4 Leases
Lease purchase and term leases are allowable only for Purchasing States whose rules and regulations permit leasing of software. Individual Purchasing Entities may enter into a lease agreement for the products covered in this Master Agreement, if they have the legal authority to enter into these types of agreements without going through a competitive process. No lease agreements will be reviewed or evaluated as part of this RFP evaluation process.
2.2.1.5 Software Publishers, Categories. The identified software product needs under this solicitation have been divided into three tiers: Key Itemized Publishers, Other Itemized Publishers, and Non-Itemized Publishers. See descriptions and chart which follow. As indicated, it is most desirable for Reseller to have a direct reseller agreement with the itemized software publishers. If a direct reseller agreement is not already in place between itemized software publishers and the Reseller, the Reseller is expected to enter into a direct reseller agreement and submit a rate for that itemized publisher that is better than the rate for a Non-Itemized Publisher. Over the life of this contract, product needs or volumes may change and new publishers may be added by amendment to the itemized publishers’ lists.
2.2.1.5.1 Itemized Highest Volume Publishers (Highest Volume, Itemized Lines).
The products of the publishers in this category represent the highest tier of sales volume identified for this solicitation, of those publishers who sell through resellers. This category is the one most likely to include a Participating State’s enterprise or high volume agreements with a publisher. Resellers shall be certified direct resellers for publishers in this DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5521834
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
14 | Page
category. The preferred pricing that a Reseller receives based on their reseller certification status, in conjunction with the anticipated considerable volume of purchases through these Contracts, is the expected foundation for a very competitive base Reseller Cost, with further reductions of Reseller Cost as they are achieved through ongoing Reseller negotiations. A percentage rate above or below Reseller Cost is to be provided for each itemized publisher. Specific requirements may be required for some publishers in this category in an individual State’s PA.
2.2.1.5.2 Other Itemized Publishers (High Volume, Itemized Lines). The products of the publishers in this category represent a high level of sales volume as identified for this solicitation. This category may include a Participating State’s high volume agreements or VLAs with a publisher. It is desirable for Resellers to be certified direct resellers for publishers in this category.
A percentage rate above or below Reseller Cost is to be provided for each itemized publisher
2.2.1.5.3 Non-Itemized Publishers (all other distributed software purchases). This category is defined to include all other distributed computer software not specifically itemized. Enterprise or Volume Licensing Agreements are not anticipated in this category. New or existing software products can be added to this category at any time during the term of the Contract without the written consent of the LSCA and may be itemized in the online catalog, if volume justifies the addition. There should be one percentage rate above or below Reseller cost covering all products in this category
KEY ITEMIZED PUBLISHERS
Certification as Direct
Reseller.
OTHER ITEMIZED PUBLISHERS
Certification as direct reseller
desirable. If not certified, the
percentage rate should be no
greater than Non-Itemized rate
NON-ITEMIZED PUBLISHER
One ‘not to exceed’ rate
ADOBE AI SQUARED
CITRIX AIRWATCH MOBILE DEVICE
MANAGEMENT VMWARE
MICROSOFT ALLIANCE ENTERPRISES
NOVELL APPLE
SYMANTEC ATTACHMATE – MICROFOCUS
VMWARE AUTODESK
AUTONOMY – HP
BAKBONE – DELL
BARRACUDA
BOMGAR REMOTE SOFTWARE
CA TECHNOLOGIES
CISCO
COMPUTRONIX USA
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5531835
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
15 | Page
COMPUWARE
COREL
DOUBLETAKE
EMC
ENCHOICE
ESET
ESRI
FREEDOM SCIENTIFIC
GUARDIAN EDGE – SYMANTEC
GW MICRO
IBM
ICM CONVERSIONS
INFOR
INTERMEDIX EMSYSTEMS
HP
HUMANWARE
INFORMATION BUILDERS
KRONOS SOFTWARE
LANDESK
LASERFISCHE
LIQUIDWARE STATUSPHERE
MICROFOCUS INC
MINJET
MPS
MQSOFTWARE – BMC
SOFTWARE
NCIRCLE
NETOP
NUANCE
ORACLE
OSAM
PASSPORT
PATCHLINK
PROOFPOINT
RSA SECURITY
REFERENCIA SYSTEMS
SAP AMERICA
SAS
SOLUTIONS SOFTWARE
SOPHOS
SPLUNK SOFTWARE
STASEEKER NETWORK
INFRASTRUCTURE
MONITORING
STELLENT – ORACLE
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5541836
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
16 | Page
SUNGUARD
SYBASE
TECHSMITH
TREND MICRO
TRUSTWARE
ULTRABAC
VORMETRIC
WEBSENSE
2.2.1.6 Software Publishers, General Representation.
2.2.1.6.1 Excluded Software Publishers. The Reseller must agree that there are no software publishers with whom they will refuse to do business if the Software Publisher is willing to do business with them. Resellers shall advise the LSCA or designee of any Excluded Software Publishers and provide explanations for the non-representation.
2.2.1.6.2 Expanded Representation. The Reseller is expected to continue to work towards reseller certifications with publishers not currently represented, particularly with those publishers whose sales volume merit classification into the itemized publisher lines. Similarly, Reseller is expected to continue to work towards a higher certification level with current publishers
2.2.1.7 Price Quote, General . Pricing is submitted in the MPA as a percentage of Reseller Cost. Individual PA’s will use the MPA pricing as a base and may negotiate an adjusted rate. Any negotiated PA rates, exclusive of taxes or any individual state’s administrative fee, shall not exceed the MPA rates. As requested by Purchasing Entity, for example on a high volume single order, Reseller shall negotiate to reduce Reseller Cost, to pass on savings to the Participating State. Firm individual order quotes shall be provided to Purchasing Entity prior to order submittal.
2.2.1.7.1 Telephone or Email Quote Support. Reseller shall accept requests for quotes by telephone, fax, email, or online. Reseller shall accept collect telephone calls and/or provide and maintain a toll-free number for eligible agency use. Reseller shall provide an email address for receipt of requests for price quotes. Reseller shall provide written quotes by fax, email or online as requested by the Participating State.
2.2.1.7.2 Quoted Delivery Method. The quote must clearly indicate the method of delivery, whether via media, download, or 3.3 Services below.
2.2.1.7.3 Timely Quotes. Reseller agrees to work with publishers and distributors to obtain quotes and deliver software in a timely fashion.
Expected response should be within twenty-four (24) hours but no more than three (3) business days. If, after three (3) business days, the Reseller has been unable to obtain the quote or assurances that DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5551837
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
17 | Page
they can obtain the software, the Reseller shall contact the Participating State or other Purchasing Entity with a status report. The Reseller and the Participating State/Purchasing Entity will mutually agree as to whether the Reseller shall continue to pursue a quote and within what timeframe, or whether the Reseller will provide the Participating State/Purchasing Entity with a written statement that the Reseller cannot supply the software. If the Reseller has been unable to obtain a quote within ten (10) days of the request for quote, the Reseller shall provide a written statement (email is sufficient) to Participating State/Purchasing Entity, and the LSCA as may be required under the PA, that the Reseller cannot supply the software, and the reason why.
2.2.1.7.4 Guaranteed 30 Day Quote. Reseller is required to honor all quotes for thirty (30) calendar days. If it is known that a price adjustment will occur during the thirty (30) calendar days following the quote, the Reseller may provide two quotes, based upon the date that the order is received.
2.2.1.7.5 Sales Promotion. The Reseller may conduct sales promotions involving specific products or groups of products for specified time periods. If electing to exercise this provision, the Reseller shall submit a formal request for approval to the LSCA. The request should include: the product or product groups, the promotional price as compared to the standard price and the Master Agreement price for the product or product groups, and the start and end dates of the sales promotion. LSCA’s approval shall be in the form of an amendment to the MPA. Upon approval, the Reseller shall provide conspicuous notice of the promotion to all Participating Entities.
2.2.1.7.6 A Participating State or other Participating Entity may allow the
Contractor to charge a credit card fee in their Participating Addendum.
2.2.1.8 Product Delivery and Returns
2.2.1.8.1 Media. The Reseller shall work with Participating State or other Purchasing Entity to provide media via any method available and as requested by the Participating State including, but not limited to: original Publisher media, CD copies of master media duplicated by the Reseller, electronic downloads, etc. In cases where original publisher’s media is not available, the Reseller shall provide CD’s copied from master disks of the software purchased under any volume or enterprise license agreement.
2.2.1.8.2 Delivery Period. Reseller to provide delivery no longer than ten (10) business days after receipt of a valid order unless conditions arise that are outside the control of the Reseller. If delivery cannot be within this time frame, Reseller is to notify Purchasing Entity of delay and anticipated DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5561838
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
18 | Page
ship date. If this delayed delivery is unacceptable to Purchasing Entity, the order can be cancelled without penalty.
2.2.1.8.3 Product Returns. Unopened software can be returned with no restocking fee up to 30 days from date of receipt, if allowed by the software publisher. If the software publisher has a shorter timeframe for returns or requires a restocking fee, this must be stated on the quote. If that information is not provided to the Participating State by the Reseller, Reseller is responsible for the restocking fee. If delivered software is defective, or if the incorrect product was delivered, the Reseller must agree to accept returns. If delivered software is defective, the Reseller is responsible for return shipping and packaging costs and for restocking charges if applicable. The Reseller must agree that any defective or incorrectly delivered media will be replaced by overnight delivery at the Reseller’s expense if requested by the Participating State or Purchasing Entity. If overnight delivery is not requested, all replacement products must be received by the Participating State or Purchasing Entity within seven (7) days of initial notification.
2.2.1.8.4 Shipping Charges. Items covered under this contract are FOB Destination and shipping charges are not to be included on any invoice unless the Purchasing Entity has ordered expedited shipment. For expedited shipment, Purchasing Entity would submit their order including related shipping charges, which may not exceed the cost of delivery by the carrier.
2.3 Services
IN SCOPE OUT OF SCOPE
SOFTWARE &
LICENSING TYPE COTS Volume
Licensing Custom/Customized
LICENSING PERIOD Perpetual Subscription Not Applicable Delivery Shrink-Wrap Download Not Applicable
Hosting as part of
delivery & use On-Premise Off-Premise Managed Services
SERVICES
Basic Installation, Training and
Maintenance
Means that activity which does not require
Consulting, Configuration, Engineering,
Design or any other type of service specific
to a Purchasing Entity requiring description
of tasks and deliverables and agreement
by the parties (Statement of Work).
Consulting, configuration, engineering, design, etc.,
any type of service specific to a Purchasing Entity
requiring description of tasks and deliverables and
agreement by the parties
2.3.1 In Scope Services:
Basic Installation, Maintenance packages and Training (3.4) are considered to be within the Scope of this Solicitation. This Master Agreement is intended for the acquisition of distributed, commercial off the shelf software
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5571839
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
19 | Page
2.3.2 ( RESERVED)
2.3.3 A Participating State may include a statement in their Participating Addendum allowing state employees to purchase software licenses.
2.3.4 Individual Participating Addendums may further limit the Scope of this Solicitation.
2.3.5 This Master Agreement is not intended for the purchase of custom software applications.
2.4 Training.
2.4.1 Training shall be available in the form of tutorials for basic installation and web-based training for software operation, basic phone support.
2.4.2 Provision of information on how to access a Software Publisher’s “Help Desk” (either telecom or web-based) for basic use questions.
2.5 Customer Service and Representation.
2.5.1 Dedicated Representation and Timely Response. Reseller shall provide a dedicated representative for each Participating State. Such representative will become familiar with the State and its cooperative partners, provide a single point as needed for quote assistance, offer software recommendations, track and report on renewal deadlines, and serve as a contact point for the LSCA. Reseller must commit to returning phone calls or responding to emails within two (2) business days.
2.5.2 Problem Escalation. The Reseller must provide an incident escalation path for each State, showing on that State’s website, the name, contact information, and role of individuals to whom problems should be escalated if the problems are not resolved by primary assigned contacts.
2.5.3 Product purchasing trends. The Reseller will speak with LSCA and sourcing team quarterly to review usage and discuss possible revisions of the categorization of publishers based upon actual sales volume or other changes.
2.5.4 Contract Reviews.
2.5.4.1 Reseller is expected to conduct quarterly reviews of all sales volumes and report sales figures and savings from Publisher’s list price, by Publisher and by PA, as well as observed trends or purchasing patterns, and to present the information to the LSCA.
2.5.4.2 At the discretion of the individual participating states, an equivalent review, limited to that state, will be presented to the PSCA.
2.5.4.3 All awardees under this contract shall meet once a year with the LSCA and Sourcing Team to review usage and discuss possible revisions of the categorization of publishers based upon actual sales volume, and to discuss any service concerns, industry trends, and the effectiveness of the contract.
2.5.4.3.1 Reseller is expected to conduct a customer satisfaction survey and an audit prior to this discussion and be prepared to discuss the results, and DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5581840
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
20 | Page
provide reports, at this review. At a minimum, the audit will report address quoting and billing accuracy, and any Reseller Cost that exceeds a Publisher’s List price for that item.
2.5.4.3.2 Based on historical sales volume information, Reseller should be prepared to discuss potential cost savings opportunities which could be passed through to Participating States.
2.5.4.3.2 In a renewal year, the annual review will take place prior to contract extensions.
2.6. Interactions with Software Publishers
2.6.1 Best Interests of Participating State. Reseller would represent the best interests of the Participating State and other Participating Entities in negotiating or otherwise working with Publishers for such items as: maximizing cost savings with best use of volume or enterprise license agreements, better pricing on individual volume buys, taking advantage of publishers’ specials, promotions, coupons or other savings opportunities.
2.6.2 Liaison with Publisher. A State may establish, in their individual PA, a requirement for Reseller to arrange with the software publisher or software publisher’s designee for implementation, customization, training, support, maintenance and other software related services. The provision of said services must be under a separate agreement between the Participating State and the applicable parties.
2.7 Reporting
2.7.1 Standard Reports
Individual participating states may require their own standard reports, such as report on savings.
Reseller shall provide these reports at the intervals, and in the format, as reasonably requested by the States. Reseller shall advise of standard reports which they can provide, and work with participating states on additional standard reports.
2.7.2 Online Reports
The SVAR shall be able to provide online, real time, reporting capabilities using website established for the state. These reports may include Back Order or Current Order Status reports. In addition, the system shall be able to provide the ability for the User agency to create custom reports. The requesting Participating State shall be able to select specific fields and create a necessary report for their specific needs. Data Fields shall include, but not be limited to, purchasing entity, Purchase Order Number, Order date, Invoice date, Publisher, Publisher Part Number, Software Reseller’s Part Number, Description, Quantity Shipped, Unit actual price, Extended Price, Sales Tax and order total. Reports shall be able to be shown online as well as emailed to the requesting Participating State, if requested. Examples of Reseller’s standard and online reports shall be submitted with the offer.
2.7.3 Custom Reports
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5591841
Master Agreement
Section 2: Scope of Work
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
21 | Page
Participating State and SVAR may mutually agree to include terms and conditions and pricing for the development and provision of customized reports as an optional service in a Participating Addendum.
2.8 Other Value-Added Services
SVAR may propose other Value-Added Services, e.g., key escrow, in their response. Such services from an awarded Offeror, if consistent with this Statement of Work, recommended by the Evaluation Team, and accepted by the PSCA, would be added to the final awarded contract.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5601842
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
1. Master Agreement Order of Precedence
a. Any Order placed under this Master Agreement shall consist of the following documents:
(1) A Participating State’s Participating Addendum (“PA”); (2) NASPO ValuePoint Master Agreement Terms & Conditions; (3) A Purchase Order issued against the Master Agreement; (4) The Statement of Work;
(5) The Solicitation; and
(6) Contractor’s response to the Solicitation, as revised (if permitted) and accepted by the Lead State. b. These documents shall be read to be consistent and complementary. Any conflict among these documents shall be resolved by giving priority to these documents in the order listed above. Contractor terms and conditions that apply to this Master Agreement are only those that are expressly accepted by the Lead State and must be in writing and attached to this Master Agreement as an Exhibit or Attachment.
2. Definitions
Acceptance is defined by the applicable commercial code, except Acceptance of a Product fo which acceptance testing is not required shall not occur before the completion of delivery in accordance with the Order, installation, if required, and a reasonable time for inspection of the Product.
Contractor means the person or entity delivering Products or performing services under the terms and conditions set forth in this Master Agreement.
Embedded Software means one or more software applications which permanently reside on a computing device.
Intellectual Property means any and all patents, copyrights, service marks, trademarks, trade secrets, trade names, patentable inventions, or other similar proprietary rights, in tangible or intangible form, and all rights, title, and interest therein.
Lead State means the State centrally administering any resulting Master Agreement(s).
Master Agreement means the underlying agreement executed by and between the Lead State, acting on behalf of the NASPO ValuePoint program, and the Contractor, as now or hereafter amended.
NASPO ValuePoint is the NASPO Cooperative Purchasing Organization LLC, doing business as NASPO ValuePoint, a 501(c)(3) limited liability company that is a subsidiary organization the National Association of State Procurement Officials (NASPO), the sole member of NASPO ValuePoint. NASPO ValuePoint facilitates administration of the NASPO cooperative group contracting consortium of state chief procurement officials for the benefit of state departments, institutions, agencies, and political subdivisions and other eligible entities (i.e., colleges, school districts, counties, cities, some nonprofit organizations, etc.) for all states and the District of Columbia. NASPO ValuePoint is identified in the Master Agreement as the recipient of reports and may perform contract administration functions relating to collecting and receiving reports as well as other contract administration functions as assigned by the Lead State.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5611843
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
23 | Page
Order or Purchase Order means any purchase order, sales order, contract or other document used by a Purchasing Entity to order the Products.
Participating Addendum means a bilateral agreement executed by a Contractor and a Participating State incorporating this Master Agreement and any other additional Participating State specific language or other requirements, e.g. ordering procedures specific to the Participating State, other terms and conditions.
Participating State means a state, or other legal entity, properly authorized to enter into a Participating Addendum.
Participating State means a state, the District of Columbia, or one of the territories of the United States that is listed in the Request for Proposal as intending to participate. A Participating State is not required to participate through execution of a Participating Addendum. Upon execution of the Participating Addendum, a Participating State becomes a Participating State.
Product means any equipment, software (including embedded software), documentation, service or other deliverable supplied or created by the Contractor pursuant to this Master Agreement. The term Products, supplies and services, and products and services are used interchangeably in these terms and conditions.
Purchasing Entity means a state, city, county, district, other political subdivision of a State, and a nonprofit organization under the laws of some states if authorized by a Participating Addendum, who issues a Purchase Order against the Master Agreement and becomes financially committed to the purchase.
3. Term of the Master Agreement
The initial term of this Master Agreement is for two (2) years. This Master Agreement may be extended beyond the original contract period for successive periods with a maximum aggregate, including all extensions, not to exceed five (5) years at the Lead State’s discretion and by mutual agreement and upon review of requirements of Participating Entities, current market conditions, and Contractor performance.
4. Amendments
The terms of this Master Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever without prior written approval of the Lead State.
5. Assignment/Subcontracts
a. Contractor shall not assign, sell, transfer, subcontract or sublet rights, or delegate responsibilities under this Master Agreement, in whole or in part, without the prior written approval of the Lead State. b. The Lead State reserves the right to assign any rights or duties, including written assignment of contract administration duties to NASPO Cooperative Purchasing Organization LLC, doing business as NASPO ValuePoint.
6. Price and Rate Guarantee Period
All prices and rates must be guaranteed for the initial term of the Master Agreement. Following the initial Master Agreement period, any request for price or rate adjustment must be for an equal guarantee period, and must be made at least ninety (90) days prior to the effective date. Requests for price or rate adjustment must include sufficient documentation supporting the request. Any adjustment or amendment to the Master Agreement shall not be effective unless approved by the Lead State. No retroactive adjustments to prices or DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5621844
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
24 | Page
rates will be allowed.
7. Cancellation
Unless otherwise stated, this Master Agreement may be canceled by either party upon 60 days written notice prior to the effective date of the cancellation. Further, any Participating State may cancel its participation upon 30 days written notice, unless otherwise limited or stated in the Participating Addendum. Cancellation may be in whole or in part. Any cancellation under this provision shall not affect the rights and obligations attending orders outstanding at the time of cancellation, including any right of and Purchasing Entity to indemnification by the Contractor, rights of payment for Products delivered and accepted, and rights attending any warranty or default in performance in association with any Order. Cancellation of the Master Agreement due to Contractor default may be immediate.
8. Confidentiality, Non-Disclosure, and Injunctive Relief Provisions governing confidentiality of information during performance of orders for the State of Arizona are governed by The State of Arizona Special Terms and Conditions. Except where a Participating Addendum prescribes otherwise, this section governs confidentiality and disclosure of information of other Purchasing Entities.
a. Confidentiality. Contractor acknowledges that it and its employees or agents may, in the course of providing a Product under this Master Agreement, be exposed to or acquire information that is confidential to Purchasing Entity’s or Purchasing Entity’s clients. Any and all information of any form that is marked as confidential or would by its nature be deemed confidential obtained by Contractor or its employees or agents in the performance of this Master Agreement, including, but not necessarily limited to (1) any Purchasing Entity’s records, (2) personnel records, and (3) information concerning individuals, is confidential information of Purchasing Entity (“Confidential Information”). Any reports or other documents or items (including software) that result from the use of the Confidential Information by Contractor shall be treated in the same manner as the Confidential Information. Confidential Information does not include information that (1) is or becomes (other than by disclosure by Contractor) publicly known; (2) is furnished by Purchasing Entity to others without restrictions similar to those imposed by this Master Agreement; (3) is rightfully in Contractor’s possession without the obligation of nondisclosure prior to the time of its disclosure under this Master Agreement; (4) is obtained from a source other than Purchasing Entity without the obligation of confidentiality, (5) is disclosed with the written consent of Purchasing Entity or; (6) is independently developed by employees, agents or subcontractors of Contractor who can be shown to have had no access to the Confidential Information. b. Non-Disclosure. Contractor shall hold Confidential Information in confidence, using at least the industry standard of confidentiality, and shall not copy, reproduce, sell, assign, license, market, transfer or otherwise dispose of, give, or disclose Confidential Information to third parties or use Confidential Information for any purposes whatsoever other than what is necessary to the performance of Orders placed under this Master Agreement. Contractor shall advise each of its employees and agents of their obligations to keep Confidential Information confidential. Contractor shall use commercially reasonable efforts to assist Purchasing Entity in identifying and preventing any unauthorized use or disclosure of any Confidential Information. Without limiting the generality of the foregoing, Contractor shall advise Purchasing Entity, applicable Participating State, and the Lead State immediately if Contractor learns or has reason to believe that any person who has had access to Confidential Information has violated or intends to violate the terms of this Master Agreement, and Contractor shall at its expense cooperate with Purchasing Entity in seeking injunctive or other equitable relief in the name of Purchasing Entity or Contractor against any such person. Except as directed by Purchasing Entity, Contractor will not at any time during or after the term of this Master Agreement disclose, directly or DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5631845
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
25 | Page
indirectly, any Confidential Information to any person, except in accordance with this Master Agreement, and that upon termination of this Master Agreement or at Purchasing Entity’s request, Contractor shall turn over to Purchasing Entity all documents, papers, and other matter in Contractor's possession that embody Confidential Information. Notwithstanding the foregoing, Contractor may keep one copy of such Confidential Information necessary for quality assurance, audits and evidence of the performance of this Master Agreement. c. Injunctive Relief. Contractor acknowledges that breach of this section, including disclosure of any Confidential Information, will cause irreparable injury to Purchasing Entity that is inadequately compensable in damages. Accordingly, Purchasing Entity may seek and obtain injunctive relief against the breach or threatened breach of the foregoing undertakings, in addition to any other legal remedies that may be available.
Contractor acknowledges and agrees that the covenants contained herein are necessary for the protection of the legitimate business interests of Purchasing Entity and are reasonable in scope and content. d. Purchasing Entity Law. These provisions shall be applicable only to extent they are not in conflict with the applicable public disclosure laws of any Purchasing Entity.
9. Right to Publish
Throughout the duration of this Master Agreement, Contractor must secure from the Lead State prior approval for the release of any information that pertains to the potential work or activities covered by the Master Agreement.
The Contractor shall not make any representations of NASPO ValuePoint’s opinion or position as to the quality or effectiveness of the services that are the subject of this Master Agreement without prior written consent. Failure to adhere to this requirement may result in termination of the Master Agreement for cause.
10. Defaults and Remedies
a. The occurrence of any of the following events shall be an event of default under this Master Agreement:
(1) Nonperformance of contractual requirements; or
(2) A material breach of any term or condition of this Master Agreement; or (3) Any certification, representation or warranty by Contractor in response to the solicitation or in this Master Agreement that proves to be untrue or materially misleading; or (4) Institution of proceedings under any bankruptcy, insolvency, reorganization or similar law, by or against Contractor, or the appointment of a receiver or similar officer for Contractor or any of its property, which is not vacated or fully stayed within thirty (30) calendar days after the institution or occurrence thereof; or
(5) Any default specified in another section of this Master Agreement. b. Upon the occurrence of an event of default, Lead State shall issue a written notice of default, identifying the nature of the default, and providing a period of 15 calendar days in which Contractor shall have an opportunity to cure the default. The Lead State shall not be required to provide advance written notice or a cure period and may immediately terminate this Master Agreement in whole or in part if the Lead State, in its sole discretion, determines that it is reasonably necessary to preserve public safety or prevent immediate public crisis. Time allowed for cure shall not diminish or eliminate Contractor’s liability for damages, including liquidated damages to the extent provided for under this Master Agreement. c. If Contractor is afforded an opportunity to cure and fails to cure the default within the period specified in the written notice of default, Contractor shall be in breach of its obligations under this Master Agreement and Lead State shall have the right to exercise any or all of the following remedies:
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5641846
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
26 | Page
(1) Exercise any remedy provided by law; and
(2) Terminate this Master Agreement and any related Contracts or portions thereof; and (3) Impose liquidated damages as provided in this Master Agreement; and (4) Suspend Contractor from being able to respond to future bid solicitations; and (5) Suspend Contractor’s performance; and
(6) Withhold payment until the default is remedied.
d. Unless otherwise specified in the Participating Addendum, in the event of a default under a Participating Addendum, a Participating State shall provide a written notice of default as described in this section and have all of the rights and remedies under this paragraph regarding its participation in the Master Agreement, in addition to those set forth in its Participating Addendum. Unless otherwise specified in a Purchase Order, a Purchasing Entity shall provide written notice of default as described in this section and have all of the rights and remedies under this paragraph and any applicable Participating Addendum with respect to an Order placed by the Purchasing Entity. Nothing in these Master Agreement Terms and Conditions shall be construed to limit the rights and remedies available to a Purchasing Entity under the applicable commercial code.
11. Shipping and Delivery.
Section 3.2.1.8 of the solicitation prescribes requirements for product delivery and return.
12. Changes in Contractor Representation
The Contractor must notify the Lead State of changes in the Contractor’s key administrative personnel, in writing within 10 calendar days of the change. The Lead State reserves the right to approve changes in key personnel, as identified in the Contractor’s proposal. The Contractor agrees to propose replacement key personnel having substantially equal or better education, training, and experience as was possessed by the key person proposed and evaluated in the Contractor’s proposal.
13. Force Majeure
Neither party to this Master Agreement shall be held responsible for delay or default caused by “force majeure,” as that term is defined in and under conditions specified in section 6.4 of the State of Arizona Uniform Terms and Conditions.
14. Indemnification
a. Section 5.1X1.1 of the State of Arizona Special Terms and Conditions governs indemnification of the State of Arizona. With respect to other entities, the Contractor shall defend, indemnify and hold harmless NASPO, NASPO Cooperative Purchasing Organization LLC (doing business as NASPO ValuePoint), the Lead State, Participating Entities, and Purchasing Entities, along with their officers, agents, and employees as well as any person or entity for which they may be liable, from and against claims, damages or causes of action including reasonable attorneys’ fees and related costs for any death, injury, or damage to property arising from act(s), error(s), or omission(s) of the Contractor, its employees or subcontractors or volunteers, at any tier, relating to the performance under the Master Agreement.
b. Indemnification – Intellectual Property. Section 6.3 of the State of Arizona Uniform Terms and Conditions governs indemnification of the State for intellectual property infringement claims. With respect to other entities the Contractor shall defend, indemnify and hold harmless NASPO, NASPO Cooperative Purchasing DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5651847
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
27 | Page
Organization LLC (doing business as NASPO ValuePoint), Participating Entities, Purchasing Entities, along with their officers, agents, and employees as well as any person or entity for which they may be liable ("Indemnified Party"), from and against claims, damages or causes of action including reasonable attorneys’ fees and related costs arising out of the claim that the Product or its use, infringes Intellectual Property rights ("Intellectual Property Claim").
(1) The Contractor’s obligations under this section shall not extend to any combination of the Product with any other product, system or method, unless the Product, system or method is:
(a) provided by the Contractor or the Contractor’s subsidiaries or affiliates; (b) specified by the Contractor to work with the Product; or (c) reasonably required, in order to use the Product in its intended manner, and the infringement could not have been avoided by substituting another reasonably available product, system or method capable of performing the same function; or
(d) It would be reasonably expected to use the Product in combination with such product, system or method.
(2) The Indemnified Party shall notify the Contractor within a reasonable time after receiving notice of an Intellectual Property Claim. Even if the Indemnified Party fails to provide reasonable notice, the Contractor shall not be relieved from its obligations unless the Contractor can demonstrate that it was prejudiced in defending the Intellectual Property Claim resulting in increased expenses or loss to the Contractor. If the Contractor promptly and reasonably investigates and defends any Intellectual Property Claim, it shall have control over the defense and settlement of it. However, the Indemnified Party must consent in writing for any money damages or obligations for which it may be responsible. The Indemnified Party shall furnish, at the Contractor’s reasonable request and expense, information and assistance necessary for such defense. If the Contractor fails to vigorously pursue the defense or settlement of the Intellectual Property Claim, the Indemnified Party may assume the defense or settlement of it and the Contractor shall be liable for all costs and expenses, including reasonable attorneys’ fees and related costs, incurred by the Indemnified Party in the pursuit of the Intellectual Property Claim. Unless otherwise agreed in writing, this section is not subject to any limitations of liability in this Master Agreement or in any other document executed in conjunction with this Master Agreement.
15. Independent Contractor
The Contractor shall be an independent contractor. Contractor shall have no authorization, express or implied, to bind the Lead State, Participating States, other Participating Entities, or Purchasing Entities to any agreements, settlements, liability or understanding whatsoever, and agrees not to hold itself out as agent except as expressly set forth herein or as expressly agreed in any Participating Addendum.
16. Individual Customers
Except to the extent modified by a Participating Addendum, each Purchasing Entity shall follow the terms and conditions of the Master Agreement and applicable Participating Addendum and will have the same rights and responsibilities for their purchases as the Lead State has in the Master Agreement, including but not limited to, any indemnity or right to recover any costs as such right is defined in the Master Agreement and applicable Participating Addendum for their purchases. Each Purchasing Entity will be responsible for its own charges, fees, and liabilities. The Contractor will apply the charges and invoice each Purchasing Entity individually.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5661848
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
28 | Page
17. Insurance
a. The insurance requirements of the State of Arizona are specified in section 5.1 X 1.2 of the State of Arizona Special Terms and Conditions. For performance in other states, unless otherwise agreed in a Participating Addendum, Contractor shall, during the term of this Master Agreement, maintain in full force and effect, the insurance described in this section. Contractor shall acquire such insurance from an insurance carrier or carriers licensed to conduct business in each Participating State’s state and having a rating of A-, Class VII or better, in the most recently published edition of Best’s Reports. Failure to buy and maintain the required insurance may result in this Master Agreement’s termination or, at a Participating State’s option, result in termination of its Participating Addendum.
b. Coverage shall be written on an occurrence basis. The minimum acceptable limits shall be as indicated below, with no deductible for each of the following categories:
1) Commercial General Liability (CGL) – Occurrence Form Policy shall include bodily injury, property damage, and broad form contractual liability coverage.
General Aggregate $2,000,000
Products – Completed Operations Aggregate $1,000,000
Personal and Advertising Injury $1,000,000
Damage to Rented Premises $50,0000
Each Occurrence $1,000,000
2) Business Automobile Liability
Bodily injury and Property Damage for any owned, hired, and/or non-owned automobiles used in the performance of this Contract. Combined Single Limit (CSL) $1,000,000
3) Technology Errors & Omissions Insurance
Each Claim $2,000,000
Annual Aggregate $2,000,000
Such insurance shall cover any, and all errors, omissions, or negligent acts in the delivery of products, services, and/or licensed programs under this contract. Coverage shall include or shall not exclude services, and/or licensed programs under this contract. Coverage shall include or shall not exclude settlement and/or defense of claims involving intellectual property, including but not limited to patent or copyright infringement. In the event that Tech E&O insurance required by this Contact is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained or an extended discovery period will be exercised for a period of two (2) years, beginning at the time work under this contract is completed.
c. Contractor shall pay premiums on all insurance policies. Such policies shall also reference this Master Agreement and shall have a condition that they not be revoked by the insurer until thirty (30) calendar days DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5671849
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
29 | Page
after notice of intended revocation thereof shall have been given to Purchasing Entity and Participating State by the Contractor.
d. Prior to commencement of performance, Contractor shall provide to the Lead State a written endorsement to the Contractor’s general liability insurance policy or other documentary evidence acceptable to the Lead State that (1) names the Participating States identified in the Request for Proposal as additional insureds, (2) provides that no material alteration, cancellation, non-renewal, or expiration of the coverage contained in such policy shall have effect unless the named Participating State has been given at least thirty (30) days prior written notice, and (3) provides that the Contractor’s liability insurance policy shall be primary, with any liability insurance of any Participating State as secondary and noncontributory. Unless otherwise agreed in any Participating Addendum, the Participating State’s rights and Contractor’s obligations are the same as those specified in the first sentence of this subsection. Before performance of any Purchase Order issued after execution of a Participating Addendum authorizing it, the Contractor shall provide to a Purchasing Entity or Participating State who requests it the same information described in this subsection. e. Contractor shall furnish to the Lead State, Participating State, and, on request, the Purchasing Entity copies of certificates of all required insurance within thirty (30) calendar days of the execution of this Master Agreement, the execution of a Participating Addendum, or the Purchase Order’s effective date and prior to performing any work. The insurance certificate shall provide the following information: the name and address of the insured; name, address, telephone number and signature of the authorized agent; name of the insurance company (authorized to operate in all states); a description of coverage in detailed standard terminology (including policy period, policy number, limits of liability, exclusions and endorsements); and an acknowledgment of the requirement for notice of cancellation. Copies of renewal certificates of all required insurance shall be furnished within thirty (30) days after any renewal date. These certificates of insurance must expressly indicate compliance with each and every insurance requirement specified in this section.
Failure to provide evidence of coverage may, at sole option of the Lead State, or any Participating State, result in this Master Agreement’s termination or the termination of any Participating Addendum. f. Coverage and limits shall not limit Contractor’s liability and obligations under this Master Agreement, any Participating Addendum, or any Purchase Order.
18. Laws and Regulations
Any and all Products offered and furnished shall comply with solicitation section 5.10, Compliance with Applicable Laws.
19. License of Pre-Existing Intellectual Property
Any rights to intellectual property shall be as prescribed in the Lead State’s solicitation and resulting contract, and Purchasing Entities shall have the same rights as the Lead State under those provisions.
20. No Waiver of Sovereign Immunity
In no event shall this Master Agreement, any Participating Addendum or any contract or any Purchase Order issued thereunder, or any act of a Lead State, a Participating State, or a Purchasing Entity be a waiver of any form of defense or immunity, whether sovereign immunity, governmental immunity, immunity based on the Eleventh Amendment to the Constitution of the United States or otherwise, from any claim or from the jurisdiction of any court.
This section applies to a claim brought against the Participating State only to the extent Congress DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5681850
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
30 | Page
has appropriately abrogated the Participating State’s sovereign immunity and is not consent by the Participating State to be sued in federal court. This section is also not a waiver by the Participating State of any form of immunity, including but not limited to sovereign immunity and immunity based on the Eleventh Amendment to the Constitution of the United States.
21. Ordering
a. Master Agreement order and purchase order numbers shall be clearly shown on all acknowledgments, shipping labels, packing slips, invoices, and on all correspondence. b. The resulting Master Agreements permit Purchasing Entities to define project-specific requirements and informally compete the requirement among companies having a Master Agreement on an “as needed” basis.
This procedure may also be used when requirements are aggregated or other firm commitments may be made to achieve reductions in pricing. This procedure may be modified in Participating Addenda and adapted to Purchasing Entity rules and policies. The Purchasing Entity may in its sole discretion determine which Master Agreement Contractors should be solicited for a quote. The Purchasing Agency may select the quote that it considers most advantageous, cost and other factors considered. c. Each Purchasing Entity will identify and utilize its own appropriate purchasing procedure and documentation.
Contractor is expected to become familiar with the Purchasing Entities’ rules, policies, and procedures regarding the ordering of supplies and/or services contemplated by this Master Agreement. d. Contractor shall not begin work without a valid Purchase Order or other appropriate commitment document compliance with the law of the Purchasing Entity.
e. Orders may be placed consistent with the terms of this Master Agreement during the term of the Master Agreement.
f. All Orders pursuant to this Master Agreement, at a minimum, shall include:
(1) The services or supplies being delivered;
(2) The place and requested time of delivery;
(3) A billing address;
(4) The name, phone number, and address of the Purchasing Entity representative; (5) The price per hour or other pricing elements consistent with this Master Agreement and the contractor’s proposal;
(6) A ceiling amount of the order for services being ordered; and (7) The Master Agreement identifier.
g. All communications concerning administration of Orders placed shall be furnished solely to the authorized purchasing agent within the Purchasing Entity’s purchasing office, or to such other individual identified in writing in the Order.
h. Orders must be placed pursuant to this Master Agreement prior to the termination date thereof, but may have a delivery date or performance period up to 120 days past the then-current termination date of this Master Agreement. Contractor is reminded that financial obligations of Purchasing Entities payable after the current applicable fiscal year are contingent upon agency funds for that purpose being appropriated, budgeted, and otherwise made available.
i. Notwithstanding the expiration or termination of this Master Agreement, Contractor agrees to perform in accordance with the terms of any Orders then outstanding at the time of such expiration or termination.
Contractor shall not honor any Orders placed after the expiration or termination of this Master Agreement, or DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5691851
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
31 | Page
otherwise inconsistent with its terms. Orders from any separate indefinite quantity, task orders, or other form of indefinite delivery order arrangement priced against this Master Agreement may not be placed after the expiration or termination of this Master Agreement, notwithstanding the term of any such indefinite delivery order agreement.
22. Participants
a. Contractor may not deliver Products under this Master Agreement until a Participating Addendum acceptable to the Participating State and Contractor is executed. The NASPO ValuePoint Master Agreement Terms and Conditions are applicable to any Order by a Participating State (and other Purchasing Entities covered by their Participating Addendum), except to the extent altered, modified, supplemented or amended by a Participating Addendum. By way of illustration and not limitation, this authority may apply to unique delivery and invoicing requirements, confidentiality requirements, defaults on Orders, governing law and venue relating to Orders by a Participating State, indemnification, and insurance requirements. Statutory or constitutional requirements relating to availability of funds may require specific language in some Participating Addenda in order to comply with applicable law. The expectation is that these alterations, modifications, supplements, or amendments will be addressed in the Participating Addendum or, with the consent of the Purchasing Entity and Contractor, may be included in the ordering document (e.g. purchase order or contract) used by the Purchasing Entity to place the Order.
b. Use of specific NASPO ValuePoint cooperative Master Agreements by state agencies, political subdivisions and other Participating Entities (including cooperatives) authorized by individual state’s statutes to use state contracts are subject to the approval of the respective State Chief Procurement Official. Issues of interpretation and eligibility for participation are solely within the authority of the respective State Chief Procurement Official.
c. Obligations under this Master Agreement are limited to those Participating Entities who have signed a Participating Addendum and Purchasing Entities within the scope of those Participating Addenda. Financial obligations of Participating States are limited to the orders placed by the departments or other state agencies and institutions having available funds. Participating States incur no financial obligations on behalf of political subdivisions. Contractor shall email a fully executed PDF copy of each Participating Addendum to PA@wsca- naspo.org to support documentation of participation and posting in appropriate data bases. d. NASPO Cooperative Purchasing Organization LLC, doing business as NASPO ValuePoint, is not a party to the Master Agreement. It is a nonprofit cooperative purchasing organization assisting states in administering the NASPO cooperative purchasing program for state government departments, institutions, agencies and political subdivisions (e.g., colleges, school districts, counties, cities, etc.) for all 50 states, the District of Columbia and the territories of the United States.
e. State Participating Addenda or other Participating Addenda shall not be construed to amend the terms of this Master Agreement between the Lead State and Contractor. f. Participating Entities who are not states may under some circumstances sign their own Participating Addendum, subject to the approval of participation by the Chief Procurement Official of the state where the Participating State is located.
g. Resale. “Resale” means any transfer of software for compensation or assignment of services for compensation. Subject to any specific conditions included in the solicitation or Contractor’s proposal as accepted by the Lead State, or as explicitly permitted in a Participating Addendum, Purchasing Entities may not resell Products (the definition of which includes software and services that are deliverables). Absent any DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5701852
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
32 | Page
such condition or explicit permission, this limitation does not prohibit: payments by employees of a Purchasing Entity for Products; sales of Products to the general public as surplus property; and fees associated with inventory transactions with other governmental or nonprofit entities under cooperative agreements and consistent with a Purchasing Entity’s laws and regulations. Any sale or transfer permitted by this subsection must be consistent with license rights granted for use of intellectual property.
23. Payment
Payment for completion of a contract order is normally made within 30 days following the date the entire order is delivered or the date a correct invoice is received, whichever is later. After 45 days the Contractor may assess overdue account charges up to a maximum rate of one percent per month on the outstanding balance.
Payments will be remitted by mail. Payments may be made via a State or political subdivision “Purchasing Card” with no additional charge.
Any prompt payment terms proposed by contractor shall be extended to all Purchasing Entities.
24. Public Information.
This Master Agreement and all related documents are subject to disclosure pursuant to the Purchasing Entity’s public information laws.
25. Records Administration and Audit.
a. The Contractor shall maintain books, records, documents, and other evidence pertaining to this Master Agreement and orders placed by Purchasing Entities under it to the extent and in such detail as shall adequately reflect performance and administration of payments and fees. Contractor shall permit the Lead State, a Participating State, a Purchasing Entity, the federal government (including its grant awarding entities and the U.S. Comptroller General), and any other duly authorized agent of a governmental agency, to audit, inspect, examine, copy and/or transcribe Contractor's books, documents, papers and records directly pertinent to this Master Agreement or orders placed by a Purchasing Entity under it for the purpose of making audits, examinations, excerpts, and transcriptions. This right shall survive for a period of five (5) years following termination of this Agreement or final payment for any order placed by a Purchasing Entity against this Agreement, whichever is later, to assure compliance with the terms hereof or to evaluate performance hereunder.
b. Without limiting any other remedy available to any governmental entity, the Contractor shall reimburse the applicable Lead State, Participating State, or Purchasing Entity for any overpayments inconsistent with the terms of the Master Agreement or orders or underpayment of fees found as a result of the examination of the Contractor’s records.
c. The rights and obligations herein right exist in addition to any quality assurance obligation in the Master Agreement requiring the Contractor to self-audit contract obligations and that permits the Lead State to review compliance with those obligations.
26. Administrative Fees
a. The Contractor shall pay to NASPO ValuePoint, or its assignee, a NASPO ValuePoint Administrative Fee of one-quarter of one percent (0.25% or 0.0025) no later than 60 days following the end of each calendar quarter.
The NASPO ValuePoint Administrative Fee shall be submitted quarterly and is based on all sales of products and services under the Master Agreement (less any charges for taxes or shipping). The NASPO ValuePoint DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5711853
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
33 | Page
Administrative Fee is not negotiable. This fee is to be included as part of the pricing submitted with proposal. b. Additionally, some states, such as the State of Arizona, may require an additional fee be paid directly to the state only on purchases made by Purchasing Entities within that state. For all such requests, the fee level, payment method and schedule for such reports and payments will be incorporated into the Participating Addendum that is made a part of the Master Agreement. The Contractor may adjust the Master Agreement pricing accordingly for purchases made by Purchasing Entities within the jurisdiction of the state. All such agreements shall not affect the NASPO ValuePoint Administrative Fee percentage or the prices paid by the Purchasing Entities outside the jurisdiction of the state requesting the additional fee. The NASPO ValuePoint Administrative Fee in subsection 26a shall be based on the gross amount of all sales (less any charges for taxes or shipping) at the adjusted prices (if any) in Participating Addenda.
27. NASPO ValuePoint Summary and Detailed Usage Reports In addition to other reports that may be required by this solicitation, the Contractor shall provide the following NASPO ValuePoint reports.
a. Summary Sales Data. The Contractor shall submit quarterly sales reports directly to NASPO ValuePoint using the NASPO ValuePoint Quarterly Sales/Administrative Fee Reporting Tool found at http://www.naspo.org/WNCPO/Calculator.aspx. Any/all sales made under the contract shall be reported as cumulative totals by state. Even if Contractor experiences zero sales during a calendar quarter, a report is still required. Reports shall be due no later than 30 day following the end of the calendar quarter (as specified in the reporting tool).
b. Detailed Sales Data. Contractor shall also report detailed sales data by: (1) state; (2) entity/customer type, e.g. local government, higher education, K12, non-profit; (3) Purchasing Entity name; (4) Purchasing Entity bill- to and ship-to locations; (4) Purchasing Entity and Contractor Purchase Order identifier/number(s); (5) Purchase Order Type (e.g. sales order, credit, return, upgrade, determined by industry practices); (6) Purchase Order date; (7) Ship Date; (8) and line item description, including product number if used. The report shall be submitted in any form required by the solicitation. Reports are due on a quarterly basis and must be received by the Lead State and NASPO ValuePoint Cooperative Development Team no later than thirty (30) days after the end of the reporting period. Reports shall be delivered to the Lead State and to the NASPO ValuePoint Cooperative Development Team electronically through a designated portal, email, CD-Rom, flash drive or other method as determined by the Lead State and NASPO ValuePoint. Detailed sales data reports shall include sales information for all sales under Participating Addenda executed under this Master Agreement. The format for the detailed sales data report is in shown in EXHIBIT III_Cooperative Contract Sales Reporting Data Requirements and Data Format.
c. Reportable sales for the summary sales data report and detailed sales data report includes sales to employees for personal use where authorized by the solicitation and the Participating Addendum. Report data for employees should be limited to ONLY the state and entity they are participating under the authority of (state and agency, city, county, school district, etc.) and the amount of sales. No personal identification numbers, e.g. names, addresses, social security numbers or any other numerical identifier, may be submitted with any report.
d. Contractor shall provide the NASPO ValuePoint Cooperative Development Coordinator with an executive summary each quarter that includes, at a minimum, a list of states with an active Participating Addendum, states that Contractor is in negotiations with and any PA roll out or implementation activities and issues.
NASPO ValuePoint Cooperative Development Coordinator and Contractor will determine the format and content of the executive summary. The executive summary is due 30 days after the conclusion of each DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5721854
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
34 | Page
calendar quarter.
e. Timely submission of these reports is a material requirement of the Master Agreement. The recipient of the reports shall have exclusive ownership of the media containing the reports. The Lead State and NASPO ValuePoint shall have a perpetual, irrevocable, non-exclusive, royalty free, transferable right to display, modify, copy, and otherwise use reports, data and information provided under this section.
28. Standard of Performance and Acceptance.
Determination of the acceptability of services shall be made by the sole judgement of the Purchasing Entity.
Acceptance shall be in writing, verbal acceptance will not be allowed. Services shall be completed in accordance with the Scope of Work, agreed to and accepted schedules, plans, and agreed to performance standards. Acceptance shall be one hundred percent (100%) functionality, which will be determined by the Purchasing Entity. Acceptance criteria shall include, but not be limited to conformity to the scope of work, quality of workmanship, and successfully performing all required Tasks. Nonconformance to a stated acceptance and performance criteria of both services and or products, as required, shall result in a delay for payment. The warranty period will begin upon Acceptance.
29. Warranty
The Contractor warrants for a period of 90 days from the date of Acceptance in accordance with the provisions of section 7 of the State of Arizona Uniform Terms and Conditions and section 5.1 N. of the State of Arizona Special Terms and Conditions, with rights of the State available to other Purchasing Entities. Upon breach of the warranty, the Contractor will repair or replace (at no charge to the Purchasing Entity) the Product whose nonconformance is discovered and made known to the Contractor. If the repaired and/or replaced Product proves to be inadequate, or fails of its essential purpose, the Contractor will refund the full amount of any payments that have been made. The rights and remedies of the parties under this warranty are in addition to any other rights and remedies of the parties provided by law or equity, including, without limitation, actual damages, and, as applicable and awarded under the law, to a prevailing party, reasonable attorneys’ fees and costs.
30. (RESERVED)
31. Title of Product
Upon Acceptance by the Purchasing Entity, Contractor shall convey to Purchasing Entity title to Product consisting of tangible media free and clear of all liens, encumbrances, or other security interests.
32. Waiver of Breach
Failure of the Lead State, Participating State, or Purchasing Entity to declare a default or enforce any rights and remedies shall not operate as a waiver under this Master Agreement or Participating Addendum. Any waiver by the Lead State, Participating State, or Purchasing Entity must be in writing. Waiver by the Lead State or Participating State of any default, right or remedy under this Master Agreement or Participating Addendum, or by Purchasing Entity with respect to any Purchase Order, or breach of any terms or requirements of this Master Agreement, a Participating Addendum, or Purchase Order shall not be construed or operate as a waiver of any subsequent default or breach of such term or requirement, or of any other term or requirement under this Master Agreement, Participating Addendum, or Purchase Order.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5731855
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
35 | Page
33. Assignment of Antitrust Rights
Contractor irrevocably assigns to a Participating State any claim for relief or cause of action which the Contractor now has or which may accrue to the Contractor in the future by reason of any violation of state or federal antitrust laws (15 U.S.C. § 1-15 or a Participating State’s state antitrust provisions), as now in effect and as may be amended from time to time, in connection with any goods or services provided to the Contractor for the purpose of carrying out the Contractor's obligations under this Master Agreement or Participating Addendum, including, at a Participating State's option, the right to control any such litigation on such claim for relief or cause of action.
34. Debarment
The Contractor certifies that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction (contract) by any governmental department or agency. This certification represents a recurring certification made at the time any Order is placed under this Master Agreement. If the Contractor cannot certify this statement, attach a written explanation for review by the Lead State.
35. Governing Law and Venue
a. The procurement, evaluation, and award of the Master Agreement shall be governed by and construed in accordance with the laws of the Lead State sponsoring and administering the procurement. The construction and effect of the Master Agreement after award shall be governed by the law of the state serving as Lead State (in most cases also the Lead State). The construction and effect of any Participating Addendum or Order against the Master Agreement shall be governed by and construed in accordance with the laws of the Participating State’s or Purchasing Entity’s State.
b. Unless otherwise specified in the RFP, the venue for any protest, claim, dispute or action relating to the procurement, evaluation, and award is in the Lead State. Venue for any claim, dispute or action concerning the terms of the Master Agreement shall be in the state serving as Lead State. Venue for any claim, dispute, or action concerning any Order placed against the Master Agreement or the effect of a Participating Addendum shall be in the Purchasing Entity’s State.
c. If a claim is brought in a federal forum, then it must be brought and adjudicated solely and exclusively within the United States District Court for (in decreasing order of priority): the Lead State for claims relating to the procurement, evaluation, award, or contract performance or administration if the Lead State is a party; the Participating State if a named party; the Participating State state if a named party; or the Purchasing Entity state if a named party.
36. NASPO ValuePoint eMarket Center
In July 2011, NASPO ValuePoint entered into a multi-year agreement with SciQuest, Inc. whereby SciQuest will provide certain electronic catalog hosting and management services to enable eligible NASPO ValuePoint’s customers to access a central online website to view and/or shop the goods and services available from existing NASPO ValuePoint Cooperative Contracts. The central online website is referred to as the NASPO ValuePoint eMarket Center.
The Contractor will have visibility in the eMarket Center through Ordering Instructions. These Ordering Instructions are available at no cost to the Contractor and provided customers information regarding the Contractors website and ordering information.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5741856
Master Agreement
Section 3: NASPO ValuePoint Master Agreement Terms and
Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
36 | Page
At a minimum, the Contractor agrees to the following timeline: NASPO ValuePoint eMarket Center Site Admin shall provide a written request to the Contractor to begin Ordering Instruction process. The Contractor shall have thirty (30) days from receipt of written request to work with NASPO ValuePoint to provide any unique information and ordering instructions that the Contractor would like the customer to have.
37. Contract Provisions for Orders Utilizing Federal Funds.
Pursuant to Appendix II to 2 Code of Federal Regulations (CFR) Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, Orders funded with federal funds may have additional contractual requirements or certifications that must be satisfied at the time the Order is placed or upon delivery. These federal requirements may be proposed by Participating Entities in Participating Addenda and Purchasing Entities for incorporation in Orders placed under this master agreement.
38. State Government Support
No support, facility space, materials, special access, personnel or other obligations on behalf of the states or other Participating Entity, other than payment, are required under the Master Agreement.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5751857
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
5.1 State of Arizona Speci al Terms and Conditions
A. Purpose
Pursuant to provisions of the Arizona Procurement Code, A.R.S. 41-2501 Et Seq., the State of Arizona intends to establish a Contract (Participating Addendum, PA) for the materials or services as listed herein in service to the State.
B. Term of Contract
The term of any resultant Contract shall commence on date of execution and shall be for an initial period of two (2) years, unless terminated, canceled or extended as otherwise provided herein.
C. Contract Extensions
The Contract term is for period stated in Item B. subject to additional successive periods with a maximum aggregate including all extensions not to exceed five (5) years.
D. Contract Type – Fixed Price
E. Eligible Agencies (STATEWIDE)
This Contract shall be for the use of all State of Arizona departments, agencies, commissions and boards. In addition, eligible State Purchasing Cooperative members may participate at their discretion.
In order to participate in this contract, a cooperative member shall have entered into a Cooperative Purchasing Agreement with the Department of Administration, State Procurement Office as required by Arizona Revised Statues § 41-2632.
Membership in the State Purchasing Cooperative is available to all Arizona political subdivisions including cities, counties, school districts, and special districts. Membership is also available to all non- profit organizations, as well as State governments, the US Federal Government and Tribal Nations.
Non-profit organizations are defined in A.R.S. § 41-2631(4) as any nonprofit corporation as designated by the internal revenue service under section 501(c)(3) through 501(c)(6).
F. Licenses
The Contractor shall maintain in current status, all federal, state and local licenses and permits required for the operation of the business conducted by the Contractor.
G. Volume of Work
The State does not guarantee a specific amount of work either for the life of the Contract or on an annual basis.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5761858
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
38 | Page
H. Key Personnel
It is essential that the Contractor provide adequate experienced personnel, capable of and devoted to the successful accomplishment of work to be performed under this Contract. The Contractor must agree to assign specific individuals to the key positions if required.
1. The Contractor agrees that, once assigned to work under this Contract, key personnel shall not be removed or replaced without written notice to the State.
2. Key personnel who are not available for work under this Contract for a continuous period exceeding thirty (30) calendar days, or are expected to devote substantially less effort to the work than initially anticipated, the Contractor shall immediately notify the State, and shall, subject to the concurrence of the State, replace such personnel with personnel of substantially equal ability and qualifications.
I. Changes
The State may at any time make changes within the general scope of this Contract. The Contractor shall respond to the Change Order with a proposal. If any such change causes an adjustment in the cost of, or the time required for the performance of any part of the work under this Contract, whether changed or not changed by the Change Order, the Procurement Officer shall modify the Contract in writing via a bilateral Contract Amendment.
J. Price Adjustment
Any price adjustment shall be within the confines of the awarded contract, or as negotiated in service to this Contract. Any negotiated price adjustments for this Contract shall be documented via a bilateral Contract Amendment.
K. Payment Procedures
The State will not make payments to any Entity, Group or individual other than the Contractor with the Federal Employer Identification (FEI) Number identified in the Contract. Contractor invoices requesting payment to any Entity, Group or individual other than the contractually specified Contractor shall be returned to the Contractor for correction.
The Contractor shall review and insure that the invoices for services provided show the correct Contractor name prior to sending them for payment.
If the Contractor Name and FEI Number change, the Contractor must complete an “Assignment and Agreement” form transferring contract rights and responsibilities to the new Contractor. The State must indicate consent on the form. A written Contract Amendment must be signed by both parties and a new W-9 form must be submitted by the new Contractor and entered into the system prior to any payments being made to the new Contractor.
L. Information Disclosure
The Contractor shall establish and maintain procedures and controls that are acceptable to the State for the purpose of assuring that no information contained in its records or obtained from the state or from others in carrying out its functions under the contract shall be used or disclosed by it, its agents, officers, or employees, except as required to efficiently perform duties under the Contract. Persons requesting such information should be referred to the State. The Contractor also agrees that any information pertaining to individual persons shall not be divulged other than to employees or officers of DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5771859
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
39 | Page
the Contractor as needed for the performance of duties under the Contract, unless otherwise agreed to in writing by the State.
M. Employees of the Contractor
All employees of the Contractor employed in the performance of work under the Contract shall be considered employees of the Contractor at all times, and not employees of the State. The Contractor shall comply with the Social Security Act, Workman’s Compensation laws and Unemployment laws of the State of Arizona and all State, local and Federal legislation relevant to the Contractor’s business.
N. Warranty
All services supplied under this Contract shall be fully guaranteed by the Contractor for a minimum period of ninety (90) days from the date of acceptance by the State. Any defects of design, workmanship, or delivered materials, that would result in non-compliance shall be fully corrected by the Contractor without cost to the State.
O. Compliance with Applicable Laws
The Materials and services supplied under this Contract shall comply with all applicable Federal, state and local laws, and the Contractor shall maintain all applicable licenses and permit requirements.
Contractor represents and warrants to the State that Contractor has the skill and knowledge possessed by members of its trade or profession and Contractor will apply that skill and knowledge with care and diligence so Contactor and Contractor's employees and any authorized subcontractors shall perform the Services described in this Contract in accordance with the Statement of Work.
Contractor represents and warrants that the Materials provided through this Contract and Statement of Work shall be free of viruses, backdoors, worms, spyware, malware and other malicious code that will hamper performance of the Materials, collect unlawful personally identifiable information on Users or prevent the Materials from performing as required under the terms and conditions of this Contract.
P. Non-Exclusive Contract
Any Contract resulting from this solicitation shall be awarded with the understanding and agreement that it is for the sole convenience of the State of Arizona. The State reserves the right to obtain like goods or services from another source when necessary, or when determined to be in the best interest of the State.
Q. Administrative Fee/Usage Reports
1. In accordance with ARS § 41-2633 the Department of Administration, State Procurement Office includes an Administrative Fee, in the majority of its Statewide contracts – multiple agency, multiple government, cooperative contracts. The Administrative Fee is used by the State to defray the additional costs associated with soliciting, awarding and administering statewide contracts.
In addition to the State agencies, boards and commissions, statewide contracts are available to members of the State Purchasing Cooperative including cities, counties, school districts, special districts, other state governments, agencies of the federal government, tribal nations, schools, medical institutions, and nonprofit organizations.
The Administrative Fee is the responsibility of the contractor. The Administrative Fee is a part of the contractor’s unit prices and is not to be charged directly to the customer in the form of a DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5781860
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
40 | Page
separate line item. In accordance with Section 26 of the NASPO ValuePoint Master Agreement Terms and Conditions, the 0.25% NASPO ValuePoint Administrative fee shall be incorporated into the Offerors base price. Other states, including the State of Arizona, may negotiate additional Administrative Fees in their Participating Addenda following award of a Master Agreement.
Further, Statewide contracts maintain one set of pricing for all customers and not separate prices for State agency customers and State Purchasing Cooperative customers.
2. State of Arizona Fee Amount:
Unless defined differently within the contract, the Statewide Contracts Administrative Fee shall be one percent (1.0%) of quarterly sales receipts under an active Statewide contract, transacted by only the members of the State Purchasing Cooperative, minus any taxes or regulatory fees, minus any returns or credits, and minus any shipping charges not already included in the unit prices. The Administrative Fee percentage is only applicable to amounts actually received by the contractor during the quarter and is not applicable to amounts ordered by customers but not yet paid for. The administrative fee is not paid on transactions with state agency customers.
3. Method of Assessment
At the completion of each quarter, the contractor reviews all sales under their contract in preparation for submission of their Usage Report. The contractor identifies all sales receipts transacted by members of the State Purchasing Cooperative and assesses one percent (1.0%) of this amount in their Usage Report. An updated list of State Purchasing Cooperative members may be found at: https://spo.az.gov/state-purchasing-cooperative . At its option, the State may expand or narrow the applicability of this fee. The State shall provide thirty (30) written notice prior to exercising or changing this option. The contractor shall summarize all sales, along with all assessed Administrative Fee amounts within their Usage Report, including total amounts for the following:
Total sales receipts from State agencies, boards and commissions; Total sales receipts from members of the State Purchasing Cooperative; and Total Administrative Fee amount based on one percent (1.0%) of the sales receipts from members of the State Purchasing Cooperative.
4. Submission of Reports and Fees. Within thirty (30) days following the end of the quarter, the contractor submits their Usage Report and if applicable, a check in the amount of one percent (1%) of their sales receipts from members of the State Purchasing Cooperative, to the Department of Administration, State Procurement Office. Contractors are required to use the State’s current report templates unless you have authorization from your contract officer to use a different format. You need to complete Form 799, which is a cover letter that gives the totals of your transactions; and Form 801, which is an Excel spreadsheet that details your transactions.
Sales to state agencies and the cooperative members are to be totaled separately. The most current forms can be downloaded at https://spo.az.gov/statewide-contracts-administrative-fee.
4.1 The submission schedule for Administrative Fees and Usage reports shall be as follows:
FY Q1, July through September Due October 31 FY Q2, October through December Due January 31 FY Q3, January through March Due by April 30 FY Q4, April through June Due by July 31 DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5791861
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
41 | Page
4.2 Usage Reports and any questions are to be submitted by email to the state's designated usage report email address: [email protected]
4.3 Administrative Fees shall be made out to the “State Procurement Office” and mailed to:
Department of Administration
General Services Division
ATTN: “Statewide Contracts Administrative Fee”
100 N. 15th Avenue, Suite 202
Phoenix, AZ 85007
5. The Administrative Fee shall be a part of the Contractor’s unit prices and is not to be charged directly to the customer in the form of a separate line item. Statewide contracts shall not have separate prices for State Agency customers and State Purchasing Cooperative customers.
6. Contractor's failure to remit administrative fees in a timely manner consistent with the contract’s requirements may result in the State exercising any recourse available under the contract or as provided for by law.
R. Acceptance
Determination of the acceptability of services shall be made by the sole judgment of the State.
Acceptance shall be in writing, verbal acceptance will not be allowed. Services shall be completed in accordance with the Scope of Work, agreed to and accepted schedules, plans, and agreed to performance standards. Acceptance shall be one hundred percent (100%) functionality, which will be determined by the State. Acceptance criteria shall include, but not be limited to conformity to the scope of work, quality of workmanship and successfully performing all required Tasks. Nonconformance to any of the stated acceptance and performance criteria of both services and or products as required shall result in a delay for payment. Payment shall not be made until nonconformance to the criteria is corrected as determined by the State.
T. Performance
Contractor agrees that, from and after the date that the applicable services commence, its performance of the Scope of Services will meet or exceed industry best practices subject to the limitations and in accordance with the provisions set forth in this Contract. If the Services provided pursuant to this Contract are changed, modified or enhanced (whether by Change Order or through the provision of new Services), The State and the Contractor will review the current performance experience and will in good faith determine whether such experience should be adjusted and whether additional services should be implemented or whether services be removed. The following requirements shall also apply:
1. Failure to Perform
If Contractor fails to complete any deliverable, then Contractor shall:
1.1 Promptly perform a root-cause analysis to identify the cause of such failure;
1.2 Use commercially reasonable efforts to correct such failure and to begin meeting the requirements as promptly as practicable;
1.3 Provide the State with a report detailing the cause of, and procedure for correcting, such DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5801862
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
42 | Page
failure; and
1.4 If appropriate under the circumstances, take ac tion to avoid such failure in the future.
2. Root-Cause Analysis
In the event of the Contractor's failure to perform required services or meet agreed upon service levels or other Contractor service standards as required by the State under this Contract, the Contractor shall perform an analysis of the cause of the service level problem and implement remediation steps as appropriate. The State shall have the right to review the analysis and approve the remediation steps prior to or subsequent to their implementation, as deemed appropriate by the State, if the remediation steps impact State assets or operational processes.
U. Compensation
Should the Contractor fail to provide all required services or deliver work products, as agreed upon by State and the Contractor, the State shall be entitled to invoke applicable remedies, including but not limited to, withholding payment to the Contractor and declaring the Contractor in material breach of the Contract. If the Contractor is in any manner in default of any obligation or the Contractor’s work or performance is determined by the State to be defective, sub-standard, or if audit exceptions are identified, the State may, in addition to other available remedies, either adjust the amount of payment or withhold payment until satisfactory resolution of the default, defect, exception or sub-standard performance. The Contractor shall reimburse the State on demand, or the State may deduct from future payments, any amounts paid for work products or performance which are determined to be an audit exception, defective or sub-standard performance. The Contractor shall correct its mistakes or errors without additional cost to the State. The State shall be the sole determiner as to defective or sub-standard performance.
The Contractor shall fulfill their contractual requirements including the Deliverables identified in the Statement of Work and fulfill the roles and responsibilities described in the Statement of Work for a firm fixed price, inclusive of travel and travel-related expenses. The fixed amount shall be inclusive of any fees for the use of any third party products or services required for use in the performance of this Contract
V. Contractor Performance Reports
Program management shall document Contractor performance, both exemplary and needing improvements where corrective action is needed or desired. Copies of corrective action reports will be forwarded to the Procurement Office for review and any necessary follow-up. The Procurement Office may contact the Contractor upon receipt of the report and may request corrective action. The Procurement Office shall discuss the Contractor’s suggested corrective action plan with the Procurement Specialist for approval of the plan.
W. Offshore Performance of Work Prohibited
Due to security and identity protection concerns, direct services under this contract shall be performed within the borders of the United States. Any services that are described in the specifications or scope of work that directly serve the State of Arizona or its clients and may involve access to secure or sensitive data or personal client data or development or modification of software for the State shall be performed within the borders of the United States. Unless specifically stated otherwise in the specifications, this definition does not apply to indirect or “overhead” services, redundant back-up DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5811863
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
43 | Page
services or services that are incidental to the performance of the contract. This provision applies to work performed by subcontractors at all tiers.
X. Indemnification and Insurance
1.1 Indemnification Clause
To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless the State of Arizona, and its departments, agencies, boards, commissions, universities, and any jurisdiction or agency issuing permits for any work included in the project, and their respective directors, officers, officials, agents and employees (hereinafter referred to as "Indemnitee") from and against any and all claims, actions, liabilities, costs, losses, or expenses, (including reasonable attorney's fees), (hereinafter collectively referred to as "Claims") arising out of actual or alleged bodily injury or personal injury of any person (including death) or loss or damage to tangible or intangible property caused, or alleged to be caused, in whole or in part, by the negligent or willful acts or omissions of Contractor or any of Contractor's directors, officers, agents, employees, volunteers or subcontractors. This indemnity includes any claim or amount arising or recovered under the Workers' Compensation Law or arising out of the failure of Contractor to conform to any federal, state or local law, statute, ordinance, rule, regulation or court decree. It is the specific intention of the parties that the Indemnitee shall, in all instances, except for Claims arising solely from the negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor from and against any and all Claims. It is agreed that Contractor will be responsible for primary loss investigation, defense and judgment costs where this indemnification is applicable. This indemnification will survive the termination of the above listed contract with the Contractor.
This indemnity shall not apply if the contractor or sub-contractor(s) is/are an agency, board, commission or university of the State of Arizona.
1.2 Insurance Requirements
1.2.1 Contractor and subcontractors shall procure and maintain, until all of their obligations have been discharged, including any warranty periods under this Contract, insurance against claims for injury to persons or damage to property arising from, or in connection with, the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors.
1.2.2 The Insurance Requirements herein are minimum requirements for this Contract and in no way limit the indemnity covenants contained in this Contract. The State of Arizona in no way warrants that the minimum limits contained herein are sufficient to protect the Contractor from liabilities that arise out of the performance of the work under this Contract by the Contractor, its agents, representativ es, employees or subcontractors, and the Contractor is free to purchase additional insurance.
1.3 Minimum Scope and Limits of Insurance
Contractor shall provide coverage with limits of liability not less than those stated below.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5821864
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
44 | Page
1.3.1 Commercial General Liability (CGL) – Occurrence Form Policy shall include bodily injury, property damage, and broad form contractual liability coverage.
General Aggregate $2,000,000
Products – Completed Operations Aggregate $1,000,000
Personal and Advertising Injury $1,000,000
Damage to Rented Premises $50,000
Each Occurrence $1,000,000
a. The policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by or on behalf of the Contractor. b. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.
1.3.2 Business Automobile Liability
Bodily Injury and Property Damage for any owned, hired, and/or non-owned automobiles used in the performance of this Contract.
Combined Single Limit (CSL) $1,000,000
Policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by, or on behalf of, the Contractor involving automobiles owned, hired and/or non-owned by the Contractor.
c. Policy shall contain a waiver of subrogation endorsement as required by this written agreement in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.
1.3.3 Workers’ Compensation and Employers' Liability
Workers' Compensation Statutory
Employers' Liability
Each Accident $1,000,000
Disease – Each Employee $1,000,000
Disease – Policy Limit $1,000,000
d. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its departments, agencies, boards, DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5831865
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
45 | Page
commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.
e. This requirement shall not apply to each Contractor or subcontractor that is exempt under A.R.S. § 23-901, and when such Contractor or subcontractor executes the appropriate waiver form (Sole Proprietor or Independent Contractor).
1.3.4 Technology Errors & Omissions Insurance
Each Claim $2,000,000
Annual Aggregate $2,000,000
f. Such insurance shall cover any, and all errors, omissions, or negligent acts in the delivery of products, services, and/or licensed programs under this contract. g. Coverage shall include or shall not exclude settlement and/or defense of claims involving intellectual property, including but not limited to patent or copyright infringement.
h. In the event that the Tech E&O insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained or an extended discovery period w ill be exercised for a period of two (2) years, beginning at the time work under this Contract is completed.
1.3.5 Media Liability Coverage
Each Claim $2,000,000
Annual Aggregate $2,000,000
i. Such insurance shall cover any and all e rrors and omissions or negligent acts in the production of content, including but not limited to plagiarism, defamation, libel, slander, false advertising, invasion of privacy, and infringement of copyright, title, slogan, trademark, service mark and trade dress.
j. In the event that the Media Liability insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained, or an extended discovery period will be exercised for a period of two (2) years beginning at the time work under this Contract is completed.
1.4 Additional Insurance Requirements
The policies shall include, or be endorsed to include, as required by this written agreement, the following provisions:
1.4.1 The Contractor's policies, as applicable, shall stipulate that the insurance afforded the Contractor shall be primary and that any insurance carried by the Department, its agents, DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5841866
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
46 | Page
officials, employees or the State of Arizona shall be excess and not contributory insurance, as provided by A.R.S. § 41-621 (E).
1.4.2 Insurance provided by the Contractor shall not limit the Contractor’s liability assumed under the indemnification provisions of this Contract.
1.5 Notice of Cancellation
Applicable to all insurance policies required within the Insurance Requirements of this Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be canceled, or be materially changed for any reason without thirty (30) days prior written notice to the State of Arizona. Within two (2) business days of receipt, Contractor must provide notice to the State of Arizona if they receive notice of a policy that has been or will be suspended, canceled, materially changed for any reason, has expired, or will be expiring. Such notice shall be sent directly to the Department and shall be mailed, emailed, hand delivered or sent by facsimile transmission to (State Representative’s Name, Address & Fax Number).
1.6 Acceptability of Insurers
Contractor’s insurance shall be placed with companies licensed in the State of Arizona or hold approved non-admitted status on the Arizona Department of Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best” rating of not less than A- VII. The State of Arizona in no way warrants that the above-required minimum insurer rating is sufficient to protect the Contractor from potential insurer insolvency.
1.7 Verification of Coverage
Contractor shall furnish the State of Arizona with certificates of insurance (valid ACORD form or equivalent approved by the State of Arizona) as required by this Contract. An authorized representative of the insurer shall sign the certificates.
1.7.1 All certificates and endorsements, as required by this written agreement, are to be received and approved by the State of Arizona before work commences. Each insurance policy required by this Contract must be in effect at, or prior to, commencement of work under this Contract. Failure to maintain the insurance policies as required by this Contract, or to provide evidence of renewal, is a material breach of contract.
1.7.2 All certificates required by this Contract shall be sent directly to the Department. The State of Arizona project/contract number and project description shall be noted on the certificate of insurance. The State of Arizona reserves the right to require complete copies of all insurance policies required by this Contract at any time.
1.8 Subcontractors
Contractor’s certificate(s) shall include all subcontractors as insureds under its policies or Contractor shall be responsible for ensuring and/or verifying that all subcontractors have valid and collectable insurance as evidenced by the certificates of insurance and endorsements for each subcontractor. All coverages for subcontractors shall be subject to the minimum Insurance DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5851867
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
47 | Page
Requirements identified above. The Department reserves the right to require, at any time throughout the life of this contract, proof from the Contractor that its subcontractors have the required coverage.
1.9 Approval and Modifications
The Contracting Agency, in consultation with State Risk, reserves the right to review or make modifications to the insurance limits, required coverages, or endorsements throughout the life of this contract, as deemed necessary. Such action will not require a formal Contract amendment but may be made by administrative action.
1.10 Exceptions
In the event the Contractor or subcontractor(s) is/are a public entity, then the Insurance Requirements shall not apply. Such public entity shall provide a certificate of self-insurance. If the Contractor or subcontractor(s) is/are a State of Arizona agency, board, commission, or university, none of the above shall apply.
Y. Data Privacy and Security
Contractor shall treat all information obtained through performance of the contract, as confidential or sensitive information consistent with State and federal law and State Policy. Contractor or its agents shall not use any data obtained in the performance of the contract in any manner except as necessary for the proper discharge of its obligations and protection of its rights related to this agreement.
Contractor shall establish and maintain procedures and controls acceptable to the State for the purpose of assuring that data in its or its agents’ possession is not mishandled, misused, released, disclosed, or used in an inappropriate manner in performance of the contract. This includes data contained in Contractor’s records obtained from the State or others, necessary for contract performance. Contractor and its agents shall take all reasonable steps and precautions to safeguard this information and data and shall not divulge the information or data to parties other than those needed for the performance of duties under the contract.
Z. Data Privacy/Security Incident Management
Contractor and its agents shall cooperate and collaborate with appropriate State personnel to identify and respond to an information security or data privacy incident, including a security breach.
1. Threat of Security Breach
Contractor(s) agrees to notify the State Chief Information Officer (CIO), the State Chief Information Security Officer (CISO) and other key personnel as identified by the State of any perceived threats placing the supported infrastructure and/or applications in danger of breach of security. The speed of notice shall be at least commensurate with the level of threat, as perceived by the Contractor(s). The State agrees to provide contact information for the State CIO, CISO and key personnel to the Contractor(s).
2. Discovery of Security Breach
Contractor agrees to immediately notify the State CIO, the CISO and key personnel as identified by the State of a discovered breach of security. The State agrees to provide contact information DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5861868
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
48 | Page
for the State CIO, the CISO and key personnel.
AA. Security Requirements for Contractor Personnel
Each individual proposed to provide services through this contract agrees to security clearance and background check procedures, including fingerprinting, as defined by the Arizona Department of Administration in accordance with Arizona Revised Statutes §41-710. The results of the individual’s background check procedures must meet all HIPAA and law enforcement requirements. Contractor is responsible for all costs to obtain security clearance for their consultants providing services through this contract. Contractor personnel, agents or sub-contractors that have administrative access to the State’s networks may be subject to any additional security requirements of the State as may be required for the performance of the contract. The Contractor, its agents and sub-contractors shall provide documentation to the State confirming compliance with all such additional security requirements for performance of the contract. Additional security requirements include but are not limited to the following:
1. Identity and Address Verification – that verifies the individual is who he or she claims to be including verification of the candidate’s present and previous addresses;
2. UNAX/confidentiality Training;
3. HIPAA Privacy and Security Training; and
4. Information Security Training.
BB. Access Constraints and Requirements
Contractor access to State facilities and resources shall be properly authorized by State personnel, based on business need and will be restricted to least possible privilege. Upon approval of access privileges, the Contractor shall maintain strict adherence to all policies, standards, and procedures.
Policies / Standards, ADOA/ASET Policies / Procedures, and Arizona Revised Statues (A.R.S.) §28- 447, §28-449, §38-421, §13-2408, §13-2316, §41-770.
Failure of the Contractor, its agents or subcontractors to comply with policies, standards, and procedures including any person who commits an unlawful breach or harmful access (physical or virtual) will be subject to prosecution under all applicable state and / or federal laws.
Any and all recovery or reconstruction costs or other liabilities associated with an unlawful breach or harmful access shall be paid by the Contractor.
CC. Health Insurance Portability and Accountability Act of 1996 The Contractor warrants that it is familiar with the requirements of HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH Act) of 2009, and accompanying regulations and will comply with all applicable HIPAA requirements in the course of this Contract. Contractor warrants that it will cooperate with the State in the course of performance of the Contract so that both the State and the Contractor will be in compliance with HIPAA, including cooperation and coordination with the Arizona Strategic Enterprise Technology (ASET) Group, Statewide Information Security and Privacy Office (SISPO), Chief Privacy Officer and HIPAA Coordinator and other compliance officials required by HIPAA and its regulations. Contractor will sign any documents that are reasonably necessary to keep the State and Contractor in compliance with DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5871869
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
49 | Page
HIPAA, including but not limited to, business associate agreements.
If requested, the Contractor agrees to sign a “Pledge to Protect Confidential Information” and to abide by the statements addressing the creation, use and disclosure of confidential information, including information designated as protected health information and all other confidential or sensitive information as defined in policy. In addition, if requested, Contractor agrees to attend or participate in job related HIPAA training that is: (1) intended to make the Contractor proficient in HIPAA for purposes of performing the services required and (2) presented by a HIPAA Privacy Officer or other person or program knowledgeable and experienced in HIPAA and who has been approved by the ASET/SISPO Chief Privacy Officer and HIPAA Coordinator.
Suggested References:
https://www.cms.gov/Regulations-and-Guidance/HIPAA-Administrative- Simplification/HIPAAGenInfo/downloads/hipaalaw.pdf
http://www.hhs.gov/ocr/privacy/hipaa/understanding/
DD. Compliance Requirements for A.R.S. § 41-4401, Government Procurement: E-Verify Requirement
1. The Contractor warrants compliance with all Federal immigration laws and regulations relating to employees and warrants its compliance with Section A.R.S. § 23-214, Subsection A. (That subsection reads: “After December 31, 2007, every employer, after hiring an employee, shall verify the employment eligibility of the employee through the E-Verify program.)
2. A breach of a warranty regarding compliance with immigration laws and regulations shall be deemed a material breach of the Contract and the Contractor may be subject to penalties up to and including termination of the Contract.
3. Failure to comply with a State audit process to randomly verify the employment records of Contractors and subcontractors shall be deemed a material breach of the Contract and the Contractor may be subject to penalties up to and including termination of the Contract.
4. The State Agency retains the legal right to inspect the papers of any employee who works on the Contract to ensure that the Contractor or subcontractor is complying with the warranty under paragraph One (1).
5.2 State of Arizona Uniform Terms and Conditions
1. Definition of Terms
As used in this Solicitation and any resulting Contract, the terms listed below are defined as follows:
1.1. “Attachment” means any item the Solicitation requires the Offeror to submit as part of the Offer.
1.2. “Contract” means the combination of the Solicitation, including the Uniform and Special Instructions to Offerors, the Uniform and Special Terms and Conditions, and the Specifications and Statement or Scope of Work; the Offer and any Best and Final Offers; and any Solicitation Amendments or Contract Amendments.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5881870
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
50 | Page
1.3. " Contract Amendment" means a written document signed by the Procurement Officer that is issued for the purpose of making changes in the Contract.
1.4. “Contractor” means any person who has a Contract with the State.
1.5. “Days” means calendar days unless otherwise specified.
1.6. “Exhibit” means any item labeled as an Exhibit in the Solicitation or placed in the Exhibits section of the Solicitation.
1.7. “Gratuity” means a payment, loan, subscription, advance, deposit of money, services, or anything of more than nominal value, present or promised, unless consideration of substantially equal or greater value is received.
1.8. “ Materials” means all property, including equipment, supplies, printing, insurance and leases of property but does not include land, a permanent interest in land or real property or leasing space.
1.9. “Procurement Officer” means the person, or his or her designee, duly authorized by the State to enter into and administer Contracts and make written determinations with respect to the Contract.
1.10. “Services” means the furnishing of labor, time or effort by a contractor or subcontractor which does not involve the delivery of a specific end product other than required reports and performance, but does not include employment agreements or collective bargaining agreements.
1.11. “Subcontract” means any Contract, express or implied, between the Contractor and another party or between a subcontractor and another party delegating or assigning, in whole or in part, the making or furnishing of any material or any service required for the performance of the Contract.
1.12. “State” means the State of Arizona and Department or Agency of the State that executes the Contract.
1.13. “State Fiscal Year” means the period beginning with July 1 and ending June 30.
2. Contract Interpretation
2.1. Arizona Law. The Arizona law applies to this Contract including, where applicable, the Uniform Commercial Code as adopted by the State of Arizona and the Arizona Procurement Code, Arizona Revised Statutes (A.R.S.) Title 41, Chapter 23, and its implementing rules, Arizona Administrative Code (A.A.C.) Title 2, Chapter 7.
2.2. Implied Contract Terms. Each provision of law and any terms required by law to be in this Contract are a part of this Contract as if fully stated in it.
2.3. Contract Order of Precedence. In the event of a conflict in the provisions of the Contract, as accepted by the State and as they may be amended, the following shall prevail in the order set forth below:
2.3.1. Special Terms and Conditions;
2.3.2. Uniform Terms and Conditions;
2.3.3. Statement or Scope of Work;
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5891871
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
51 | Page
2.3.4. Specifications;
2.3.5. Attachments;
2.3.6. Exhibits;
2.3.7. Documents referenced or included in the Solicitation.
2.4. Relationship of Parties. The Contractor under this Contract is an independent Contractor.
Neither party to this Contract shall be deemed to be the employee or agent of the other party to the Contract.
2.5. Severability. The provisions of this Contract are severable. Any term or condition deemed illegal or invalid shall not affect any other term or condition of the Contract.
2.6. No Parole Evidence. This Contract is intended by the parties as a final and complete expression of their agreement. No course of prior dealings between the parties and no usage of the trade shall supplement or explain any terms used in this document and no other understanding either oral or in writing shall be binding.
2.7. No Waiver. Either party’s failure to insist on strict performance of any term or condition of the Contract shall not be deemed a waiver of that term or condition even if the party accepting or acquiescing in the nonconforming performance knows of the nature of the performance and fails to object to it.
3. Contract Administration and Operation
3.1. Records. Under A.R.S. § 35-214 and § 35-215, the Contractor shall retain and shall contractually require each subcontractor to retain all data and other “records” relating to the acquisition and performance of the Contract for a period of five years after the completion of the Contract. All records shall be subject to inspection and audit by the State at reasonable times.
Upon request, the Contractor shall produce a legible copy of any or all such records.
3.2. Non-Discrimination. The Contractor sha ll comply with State Executive Order No. 2009-09 and all other applicable Federal and State laws, rules and regulations, including the Americans with Disabilities Act.
3.3. Audit. Pursuant to ARS § 35-214, at any time during the term of this Contract and five (5) years thereafter, the Contractor’s or any subcontractor’s books and records shall be subject to audit by the State and, where applicable, the Federal Government, to the extent that the books and records relate to the performance of the Contract or Subcontract.
3.4. Facilities Inspection and Materials Testing. The Contractor agrees to permit access to its facilities, subcontractor facilities and the Contractor’s processes or services, at reasonable times for inspection of the facilities or materials covered under this Contract. The State shall also have the right to test, at its own cost, the materials to be supplied under this Contract. Neither inspection of the Contractor’s facilities nor materials testing shall constitute final acceptance of the materials or services. If the State determines non-compliance of the materials, the Contractor shall be responsible for the payment of all costs incurred by the State for testing and inspection.
3.5. Notices. Notices to the Contractor required by this Contract shall be made by the State to the person indicated on the Offer and Acceptance form submitted by the Contractor unless DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5901872
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
52 | Page
otherwise stated in the Contract. Notices to the State required by the Contract shall be made by the Contractor to the Solicitation Contact Person indicated on the Solicitation cover sheet, unless otherwise stated in the Contract. An authorized Procurement Officer and an authorized Contractor representative may change their respective person to whom notice shall be given by written notice to the other and an amendment to the Contract shall not be necessary.
3.6. Advertising, Publishing and Promotion of Contract. The Contractor shall not use, advertise or promote information for commercial benefit concerning this Contract without the prior written approval of the Procurement Officer.
3.7. Property of the State. Any materials, including reports, computer programs and other deliverables, created under this Contract are the sole property of the State. The Contractor is not entitled to a patent or copyright on those materials and may not transfer the patent or copyright to anyone else. The Contractor shall not use or release these materials without the prior written consent of the State.
3.8. Ownership of Intellectual Property. Any and all intellectual property, including but not limited to copyright, invention, trademark, trade name, service mark, and/or trade secrets created or conceived pursuant to or as a result of this contract and any related subcontract (“Intellectual Property”), shall be work made for hire and the State shall be considered the creator of such Intellectual Property. The agency, department, division, board or commission of the State of Arizona requesting the issuance of this contract shall own (for and on behalf of the State) the entire right, title and interest to the Intellectual Property throughout the world. Contractor shall notify the State, within thirty (30) days, of the creation of any Intellectual Property by it or its subcontractor(s). Contractor, on behalf of itself and any subcontractor(s), agrees to execute any and all document(s) necessary to assure ownership of the Intellectual Property vests in the State and shall take no affirmative actions that might have the effect of vesting all or part of the Intellectual Property in any entity other than the State. The Intellectual Property shall not be disclosed by contractor or its subcontractor(s) to any entity not the State without the express written authorization of the agency, department, division, board or commission of the State of Arizona requesting the issuance of this contract.
3.9. Federal Immigration and Nationality Act. The contractor shall comply with all federal, state and local immigration laws and regulations relating to the immigration status of their employees during the term of the contract. Further, the contractor shall flow down this requirement to all subcontractors utilized during the term of the contract. The State shall retain the right to perform random audits of contractor and subcontractor records or to inspect papers of any employee thereof to ensure compliance. Should the State determine that the contractor and/or any subcontractors be found noncompliant, the State may pursue all remedies allowed by law, including, but not limited to; suspension of work, termination of the contract for default and suspension and/or debarment of the contractor.
3.10 E-Verify Requirements. In accordance with A.R.S. § 41-4401, Contractor warrants compliance with all Federal immigration laws and regulations relating to employees and warrants its compliance with Section A.R.S. § 23-214, Subsection A.
3.11 Offshore Performance of Work Prohibited.
Any services that are described in the specifications or scope of work that directly serve the State of Arizona or its clients and involve access to secure or sensitive data or personal client data shall be performed within the defined territories of the United States. Unless specifically DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5911873
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
53 | Page
stated otherwise in the specifications, this paragraph does not apply to indirect or 'overhead' services, redundant back-up services or services that are incidental to the performance of the contract. This provision applies to work performed by subcontractors at all tiers.
4. Costs and Payments
4.1. Payments. Payments shall comply with the requirements of A.R.S. Titles 35 and 41, Net 30 days. Upon receipt and acceptance of goods or services, the Contractor shall submit a complete and accurate invoice for payment from the State within thirty (30) days.
4.2. Delivery. Unless stated otherwise in the Contract, all prices shall be F.O.B. Destination and shall include all freight delivery and unloading at the destination.
4.3. Applicable Taxes.
4.3.1. Payment of Taxes. The Contractor shall be responsible for paying all applicable taxes.
4.3.2. State and Local Transaction Privilege Taxes. The State of Arizona is subject to all applicable state and local transaction privilege taxes. Transaction privilege taxes apply to the sale and are the responsibility of the seller to remit. Failure to collect such taxes from the buyer does not relieve the seller from its obligation to remit taxes.
4.3.3. Tax Indemnification. Contractor and all subcontractors shall pay all Federal, state and local taxes applicable to its operation and any persons employed by the Contractor.
Contractor shall, and require all subcontractors to hold the State harmless from any responsibility for taxes, damages and interest, if applicable, contributions required under Federal, and/or state and local laws and regulations and any other costs including transaction privilege taxes, unemployment compensation insurance, Social Security and Worker’s Compensation.
4.3.4. IRS W9 Form. In order to receive paym ent the Contractor shall have a current I.R.S. W9 Form on file with the State of Arizona, unless not required by law.
4.4. Availability of Funds for the Next State fiscal year. Funds may not presently be available for performance under this Contract beyond the current state fiscal year. No legal liability on the part of the State for any payment may arise under this Contract beyond the current state fiscal year until funds are made available for performance of this Contract.
4.5. Availability of Funds for the current State fiscal year. Should the State Legislature enter back into session and reduce the appropriations or for any reason and these goods or services are not funded, the State may take any of the following actions:
4.5.1. Accept a decrease in price offered by the contractor;
4.5.2. Cancel the Contract; or
4.5.3. Cancel the contract and re-solicit the requirements.
5. Contract Changes
5.1. Amendments. This Contract is issued under the authority of the Procurement Officer who signed this Contract. The Contract may be modified only through a Contract Amendment within the scope of the Contract. Changes to the Contract, including the addition of work or materials, the revision of payment terms, or the substitution of work or materials, directed by a person who is DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5921874
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
54 | Page
not specifically authorized by the procurement officer in writing or made unilaterally by the Contractor are violations of the Contract and of applicable law. Such changes, including unauthorized written Contract Amendments shall be void and without effect, and the Contractor shall not be entitled to any claim under this Contract based on those changes.
5.2. Subcontracts. The Contractor shall not enter into any Subcontract under this Contract for the performance of this contract without the advance written approval of the Procurement Officer.
The Contractor shall clearly list any proposed subcontractors and the subcontractor’s proposed responsibilities. The Subcontract shall incorporate by reference the terms and conditions of this Contract.
5.3. Assignment and Delegation. The Contractor shall not assign any right nor delegate any duty under this Contract without the prior written approval of the Procurement Officer. The State shall not unreasonably withhold approval.
6. Risk and Liability
6.1. Risk of Loss: The Contractor shall bear all loss of conforming material covered under this Contract until received by authorized personnel at the location designated in the purchase order or Contract. Mere receipt does not constitute final acceptance. The risk of loss for nonconforming materials shall remain with the Contractor regardless of receipt.
6.2. Indemnification
6.2.1. Contractor/Vendor Indemnification (Not Public Agency) The parties to this contract agree that the State of Arizona, its departments, agencies, boards and commissions shall be indemnified and held harmless by the contractor for the vicarious liability of the State as a result of entering into this contract. However, the parties further agree that the State of Arizona, its departments, agencies, boards and commissions shall be responsible for its own negligence. Each party to this contract is responsible for its own negligence.
6.2.2. Public Agency Language Only Each party (as 'indemnitor') agrees to indemnify, defend, and hold harmless the other party (as 'indemnitee') from and against any and all claims, losses, liability, costs, or expenses (including reasonable attorney's fees) (hereinafter collectively referred to as 'claims') arising out of bodily injury of any person (including death) or property damage but only to the extent that such claims which result in vicarious/derivative liability to the indemnitee, are caused by the act, omission, negligence, misconduct, or other fault of the indemnitor, its officers, officials, agents, employees, or volunteers."
6.3. Indemnification - Patent and Copyright . The Contractor shall indemnify and hold harmless the State against any liability, including costs and expenses, for infringement of any patent, trademark or copyright arising out of Contract performance or use by the State of materials furnished or work performed under this Contract. The State shall reasonably notify the Contractor of any claim for which it may be liable under this paragraph. If the contractor is insured pursuant to A.R.S. § 41-621 and § 35-154, this section shall not apply.
6.4. Force Majeure.
6.4.1 Except for payment of sums due, neither party shall be liable to the other nor deemed in DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5931875
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
55 | Page
default under this Contract if and to the extent that such party’s performance of this Contract is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the party affected and occurs without its fault or negligence. Without limiting the foregoing, force majeure includes acts of God; acts of the public enemy; war; riots; strikes; mobilization; labor disputes; civil disorders; fire; flood; lockouts; injunctions-intervention-acts; or failures or refusals to act by government authority; and other similar occurrences beyond the control of the party declaring force majeure which such party is unable to prevent by exercising reasonable diligence.
6.4.2. Force Majeure shall not include the following occurrences:
6.4.2.1. Late delivery of equipment or materials caused by congestion at a manufacturer’s plant or elsewhere, or an oversold condition of the market;
6.4.2.2. Late performance by a subcontractor unless the delay arises out of a force majeure occurrence in accordance with this force majeure term and condition; or
6.4.2.3. Inability of either the Contractor or any subcontractor to acquire or maintain any required insurance, bonds, licenses or permits.
6.4.3. If either party is delayed at any time in the progress of the work by force majeure, the delayed party shall notify the other party in writing of such delay, as soon as is practicable and no later than the following working day, of the commencement thereof and shall specify the causes of such delay in such notice. Such notice shall be delivered or mailed certified-return receipt and shall make a specific reference to this article, thereby invoking its provisions. The delayed party shall cause such delay to cease as soon as practicable and shall notify the other party in writing when it has done so. The time of completion shall be extended by Contract Amendment for a period of time equal to the time that results or effects of such delay prevent the delayed party from performing in accordance with this Contract.
6.4.4. Any delay or failure in performance by either party hereto shall not constitute default hereunder or give rise to any claim for damages or loss of anticipated profits if, and to the extent that such delay or failure is caused by force majeure.
6.5. Third Party Antitrust Violations. The Contractor assigns to the State any claim for overcharges resulting from antitrust violations to the extent that those violations concern materials or services supplied by third parties to the Contractor, toward fulfillment of this Contract.
7. Warranties
7.1. Liens. The Contractor warrants that the materials supplied under this Contract are free of liens and shall remain free of liens.
7.2. Quality. Unless otherwise modified elsewhere in these terms and conditions, the Contractor warrants that, for one year after acceptance by the State of the materials, they shall be:
7.2.1. Of a quality to pass without objection in the trade under the Contract description;
7.2.2. Fit for the intended purposes for which the materials are used;
7.2.3. Within the variations permitted by the Contract and are of even kind, quantity, and quality within each unit and among all units;
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5941876
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
56 | Page
7.2.4. Adequately contained, packaged and marked as the Contract may require; and
7.2.5. Conform to the written promises or affirmations of fact made by the Contractor.
7.3. Fitness. The Contractor warrants that any material supplied to the State shall fully conform to all requirements of the Contract and all representations of the Contractor, and shall be fit for all purposes and uses required by the Contract.
7.4. Inspection/Testing. The warranties set forth in subparagraphs 7.1 through 7.3 of this paragraph are not affected by inspection or testing of or payment for the materials by the State.
7.5. Compliance With Applicable Laws. The materials and services supplied under this Contract shall comply with all applicable Federal, state and local laws, and the Contractor shall maintain all applicable license and permit requirements.
7.6. Survival of Rights and Obligations after Contract Expiration or Termination.
7.6.1. Contractor's Representations and Warranties. All representations and warranties made by the Contractor under this Contract shall survive the expiration or termination hereof.
In addition, the parties hereto acknowledge that pursuant to A.R.S. § 12-510, except as provided in A.R.S. § 12-529, the State is not subject to or barred by any limitations of actions prescribed in A.R.S., Title 12, Chapter 5.
7.6.2. Purchase Orders. The Contractor shall, in accordance with all terms and conditions of the Contract, fully perform and shall be obligated to comply with all purchase orders received by the Contractor prior to the expiration or termination hereof, unless otherwise directed in writing by the Procurement Officer, including, without limitation, all purchase orders received prior to but not fully performed and satisfied at the expiration or termination of this Contract.
8. State's Contractual Remedies
8.1. Right to Assurance. If the State in good faith has reason to believe that the Contractor does not intend to, or is unable to perform or continue performing under this Contract, the Procurement Officer may demand in writing that the Contractor give a written assurance of intent to perform.
Failure by the Contractor to provide written assurance within the number of Days specified in the demand may, at the State’s option, be the basis for terminating the Contract under the Uniform Terms and Conditions or other rights and remedies available by law or provided by the contract.
8.2. Stop Work Order.
8.2.1. The State may, at any time, by written order to the Contractor, require the Contractor to stop all or any part, of the work called for by this Contract for period(s) of days indicated by the State after the order is delivered to the Contractor. The order shall be specifically identified as a stop work order issued under this clause. Upon receipt of the order, the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage.
8.2.2. If a stop work order issued under this clause is canceled or the period of the order or any extension expires, the Contractor shall resume work. The Procurement Officer shall make an equitable adjustment in the delivery schedule or Contract price, or both, and DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5951877
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
57 | Page
the Contract shall be amended in writing accordingly.
8.3. Non-exclusive Remedies. The rights and the rem edies of the State under this Contract are not exclusive.
8.4. Nonconforming Tender. Materials or services supplied under this Contract shall fully comply with the Contract. The delivery of materials or services or a portion of the materials or services that do not fully comply constitutes a breach of contract. On delivery of nonconforming materials or services, the State may terminate the Contract for default under applicable termination clauses in the Contract, exercise any of its rights and remedies under the Uniform Commercial Code, or pursue any other right or remedy available to it.
8.5. Right of Offset. The State shall be entitled to offset against any sums due the Contractor, any expenses or costs incurred by the State, or damages assessed by the State concerning the Contractor’s non-conforming performance or failure to perform the Contract, including expenses, costs and damages described in the Uniform Terms and Conditions.
9. Contract Termination
9.1. Cancellation for Conflict of Interest. Purs uant to A.R.S. § 38-511, the State may cancel this Contract within three (3) years after Contract execution without penalty or further obligation if any person significantly involved in initiating, negotiating, securing, drafting or creating the Contract on behalf of the State is or becomes at any time while the Contract or an extension of the Contract is in effect an employee of or a consultant to any other party to this Contract with respect to the subject matter of the Contract. The cancellation shall be effective when the Contractor receives written notice of the cancellation unless the notice specifies a later time. If the Contractor is a political subdivision of the State, it may also cancel this Contract as provided in A.R.S. § 38-511.
9.2. Gratuities. The State may, by written notice, terminate this Contract, in whole or in part, if the State determines that employment or a Gratuity was offered or made by the Contractor or a representative of the Contractor to any officer or employee of the State for the purpose of influencing the outcome of the procurement or securing the Contract, an amendment to the Contract, or favorable treatment concerning the Contract, including the making of any determination or decision about contract performance. The State, in addition to any other rights or remedies, shall be entitled to recover exemplary damages in the amount of three times the value of the Gratuity offered by the Contractor.
9.3. Suspension or Debarment. The State may, by written notice to the Contractor, immediately terminate this Contract if the State determines that the Contractor has been debarred, suspended or otherwise lawfully prohibited from participating in any public procurement activity, including but not limited to, being disapproved as a subcontractor of any public procurement unit or other governmental body. Submittal of an offer or execution of a contract shall attest that the contractor is not currently suspended or debarred. If the contractor becomes suspended or debarred, the contractor shall immediately notify the State.
9.4. Termination for Convenience. The State reserves the right to terminate the Contract, in whole or in part at any time when in the best interest of the State, without penalty or recourse. Upon receipt of the written notice, the Contractor shall stop all work, as directed in the notice, notify all subcontractors of the effective date of the termination and minimize all further costs to the State.
In the event of termination under this paragraph, all documents, data and reports prepared by DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 5961878
Master Agreement
Section 4: Lead State (ARIZONA) Terms and Conditions
State of Arizona
State Procurement Office
100 North 15th Avenue, Suite 201
Phoenix, AZ 85007
Contract No: ADSPO16-130652
Description: Software Value-Added Reseller (SVAR) Services
58 | Page
the Contractor under the Contract shall become the property of and be delivered to the State upon demand. The Contractor shall be entitled to receive just and equitable compensation for work in progress, work completed and materials accepted before the effective date of the termination. The cost principles and procedures provided in A.A.C. R2-7-701 shall apply.
9.5. Termination for Default.
9.5.1. In addition to the rights reserved in the contract, the State may terminate the Contract in whole or in part due to the failure of the Contractor to comply with any term or condition of the Contract, to acquire and maintain all required insurance policies, bonds, licenses and permits, or to make satisfactory progress in performing the Contract. The Procurement Officer shall provide written notice of the termination and the reasons for it to the Contractor.
9.5.2. Upon termination under this paragraph, all goods, materials, documents, data and reports prepared by the Contractor under the Contract shall become the property of and be delivered to the State on demand.
9.5.3. The State may, upon termination of this Contract, procure, on terms and in the manner that it deems appropriate, materials or services to replace those under this Contract.
The Contractor shall be liable to the State for any excess costs incurred by the State in procuring materials or services in substitution for those due from the Contractor.
9.6. Continuation of Performance Through Termination. The Contractor shall continue to perform, in accordance with the requirements of the Contract, up to the date of termination, as directed in the termination notice.
10. Contract Claims
All contract claims or controversies under this Contract shall be resolved according to A.R.S. Title 41, Chapter 23, Article 9, and rules adopted thereunder.
11. Arbitration
The parties to this Contract agree to resolve all disputes arising out of or relating to this contract through arbitration, after exhausting applicable administrative review, to the extent required by A.R.S. § 12-1518, except as may be required by other applicable statutes (Title 41).
12. Comments Welcome
The State Procurement Office periodically reviews the Uniform Terms and Conditions and welcomes any comments you may have. Please submit your comment s to: State Procurement Administrator, State Procurement Office, 100 North 15
th Avenue, Suite 201, Phoenix, Arizona, 85007.
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NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-1
Attachment A: Qualifications
1. Overall Company Information
Requirement
1.1 Business Operations
1.1.1 Provide a Brief overview of business operations, with an emphasis on the provision of services as a Software Value-Added Reseller.
Response
CDW was founded in 1984 as a home-based business, and has since grown tremendously through strategic partnerships, online and onsite inventories and services, and strong technical expertise to earn $12 billion in net sales in 2014. CDW partners with over 1,000 manufacturers to offer a portfolio of 100,000-plus products. Over 7,000 individuals constitute the CDW workforce, ranging from salespeople and field executives to administrative and service experts to highly skilled technology specialists and engineers.
Incorporated in 1998, CDW·G is the wholly owned subsidiary of CDW LLC that focuses on the public sector, including federal, state, and local government agencies, educational institutions, and healthcare facilities. With over 200 government and education contracts, we are the nation’s largest direct response provider of multi-brand IT solutions. We are currently the largest value-added reseller in the United States, ranked #253 on the 2015 Fortune 500 list.
CDW·G focuses on building strong customer relationships by leveraging our knowledgeable account managers and
technical specialists to provide extensive pre- and post-award support. Our experts lead the industry in public-sector customer service and product knowledge, directly benefitting the various personnel of our public-sector customers.
Software Services
CDW is a market-leading software provider with $3 billion annually in software revenue.
Through our distribution partner network, we offer nearly every software title available on the market today and have direct partnerships with over 300 software partners. As a company, we manage 25,000 software agreements and process over 180,000 annual software renewals. For the key itemized publishers named in this RFP, we maintain top-tier partnerships (e.g., Adobe Platinum Partner) and regularly receive annual awards (e.g., 2014 Microsoft O365 Sales Achievement Award).
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Proof of Authorization
Our ability to supply NASPO ValuePoint members with the key and secondary itemized software publishers listed in the RFP rests on the strong partnerships forged with industry- leading manufacturers, whose solutions meet the needs of our public sector customers.
Letters of authorization for each publisher can be provided upon request.
Key Itemized Publishers
Publisher Relationship with CDW·G Learn More
Adobe
Fully authorized Adobe Licensing Center (ALC)
Platinum Channel Partner
Adobe’s largest and most successful reseller partner
since 2001
CDW named Adobe 2015 Consumer and Business
Worldwide Partner of the Year at Global Sales
Conference (12/15/2015)
Internal Adobe support team (8 licensing specialists, 1 Creative Cloud program specialists, 1 senior brand
manager)
The only Adobe reseller with multiple dedicated, onsite channel account managers (23 total)
www.cdwg.com/cont
ent/brands/adobe/
Citrix
Citrix LAR Certified Partner certification
Large Account Reseller Partner of the Year 2013, 2012, 2011 at Citrix Summit conference
Internal Citrix specialist team (1 partner specialist, 3 technical specialists, 2 business development specialists, 1 brand manager)
Hold over 400 Citrix certifications (e.g., CCA/Certified Administrator, CCEA/Certified Enterprise Administrator, CCSP/Certified Sales Professional)
www.cdwg.com/cont
ent/brands/citrix/
Microsoft
Microsoft Gold Certified Partner, Software Asset
Management (SAM) Partner, Authorized Direct Reseller
(ADR) for Open Value licensing programs
Number-one ranked Licensing Solution Provider (LSP)
and Enterprise Software Advisor (ESA)
Manage over 25,000 active Microsoft agreements
Largest Microsoft Partner in Office 365 customer
deployments, contract volume LSP of EAs/SAs, new
enterprise agreements
2014 US OEM Reseller of the Year, Office 365 Sales
Achievement Award, Experience Center (MEC) Partner of
the Year
www.cdwg.com/cont
ent/brands/microsoft/
Novell
Novell Gold Partner with distinctions:
o ALA, MLSA, SLA, VLA, VLA academic, VLA
nonprofit/government authorized reseller
o End-user computing sales specialization
o California SLP contract authorized reseller
o NetIQ authorized reseller
4/6/2015: Micro Focus completed its merger with The
Attachmate Group, which acquired acquired Novell, Inc.
(4/27/2011); Novell now operates as two separate
business units under Novell® and SUSE® brand names,
having joined Attachmate® and NetIQ® as holdings of
The Attachmate Group
www.cdwg.com/cont
ent/brands/novell/
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Key Itemized Publishers
Publisher Relationship with CDW·G Learn More
Symantec
Symantec Platinum Partner
Named the Symantec 2015 National Access Reseller
(NAR) Innovation Partner of the Year at Partner
Engage awards (11/5/2015)
Largest/top-selling LAR partner; Specialization Member (includes Endpoint Management, Data Loss Prevention,
IT Compliance, Managed Security Services, SMB
Backup, SMB Security, Enterprise Security, Archiving
and eDiscovery, Data Protection with NetBackup,
Storage Management)
Dedicated internal Symantec team (16 CDW-badged
coworkers (segment, renewals))
www.cdwg.com/cont
ent/brands/symantec
/
VMware
VMware Authorized Consulting (VAC) Program Gold
member
2014 Global and Americas Marketing Partner of the Year award at VMware Partner Exchange
55+ dedicated internal VMware personnel (1 onsite brand manager, 6 pre-sales support specialists, 4 vCloud Air
pre-sales/technical/business development specialists, 1 end-user computing channel account representative, 3
business development specialists, 5 renewal specialists, 5 capacity planner assessment engineers, 2 national
account managers, 12 inside sales reps, 2 systems
engineers, 14 virtualization solution architects)
Over 1,500 VMware Sales Professional (VSP)
accreditations; 34 VMware Certified Professional (VCP)
accreditations; 71 VMware Technical Sales Professional
(VTSP) accreditations
www.cdwg.com/cont
ent/brands/vmware/
Requirement
1.1.2 Provide the following information using the format below.
Response
1.1 Business Operations
Required Information Offeror’s Response
1.1.2.1 Offeror’s full legal name CDW Government LLC (CDW·G)
1.1.2.2 Primary business
contact information (name,
address, phone number, email
address, website)
Jason Schwartz, Sales Manager
230 N Milwaukee Ave
Vernon Hills, IL 60061
P: 877.325.0934
E: [email protected]
W: cdwg.com/PeopleWhoGetIT
1.1.2.3 Date Company was
established
CDW·G was incorporated in 1998; parent company CDW was
founded in 1984.
1.1.2.4 Location where the
Offeror is incorporated CDW·G is incorporated in the state of Illinois.
1.1.2.5 Ownership structure
(public, partnership, subsidiary,
etc.)
CDW Government LLC is a wholly owned subsidiary of CDW
LLC, which is owned by CDW Corporation, a publicly traded entity under NASDAQ (ticker symbol “CDW”).
1.1.2.6 Office location(s) Corporate Headquarters
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1.1 Business Operations
Required Information Offeror’s Response
responsible for performance of
contract. Include address,
contact information.
230 N Milwaukee Ave
Vernon Hills, IL 60061
P: 800.808.4239
Eastern Distribution Center
200 N Milwaukee Ave
Vernon Hills, IL 60061
P: 847.465.6000
Western Distribution Center
3201 E Alexander Road
North Las Vegas, NV 89030
P: 702.495.5000
1.1.2.7 Organizational chart
relevant to Scope of Work of
this solicitation.
An organizational chart pertaining to this solicitation immediately follows this table. Names in red boxes have resumes included in this Attachment.
1.1.2.8 Contact information for
the individual who is
responsible for any
clarifications or discussions
regarding the submitted
response.
Edie Harris, Proposal Manager
P: 312.705.6285
E: [email protected]
The following organizational chart is indicative of the personnel structure that will be supporting the NASPO ValuePoint contract and its members throughout the life of the agreement. Names in red boxes have resumes included in this Attachment.
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Requirement
1.2 Key Personnel —Provide the information, using the format below, regarding each Key Personnel for a resultant contract for items 1.2.1 through 1.2.5:
Response
The following key personnel will participate in serving the NASPO ValuePoint contract and its participating member agencies. Please note that the named personnel included in this response are not meant to provide an exhaustive list of the CDW·G sales, software, and support individuals who will be involved in serving this contract’s participating states.
Program Management
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Jumana Dihu
1.2.2 Position/Title and reporting
responsibilities Program Manager, State & Local Government
1.2.3 Years of industry experience 13 years
1.2.4 Years in current position Two (2) years
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Program Manager; will oversee NASPO ValuePoint
contract details post-award, including reports,
audits, and management
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Software Solutions
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Gabriel Adler
1.2.2 Position/Title and reporting
responsibilities Sales Manager, Software Solutions
1.2.3 Years of industry experience Nine (9) Years
1.2.4 Years in current position Two (2) years
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Sales Manager, Software; oversees team of
licensing account executives and field specialists,
grows public-sector software sales
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Gabe Arias
1.2.2 Position/Title and reporting
responsibilities Licensing Account Executive, Software Solutions
1.2.3 Years of industry experience Nine (9) years
1.2.4 Years in current position Four (4) years
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Licensing Account Executive, Software; helps
NASPO ValuePoint customers manage software
investments and cultivates trusted client
relationships at CIO/Director level within state
agencies
State & Local Sales
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Jason Schwartz
1.2.2 Position/Title and reporting
responsibilities Sales Manager, State & Local
1.2.3 Years of industry experience 10 years
1.2.4 Years in current position Two (2) years
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Sales Manager, Pacific Geography; oversees
account managers handling NASPO ValuePoint
members, maintains regional relationships with
publishers/manufacturers, long-term contract
success strategy
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Michael Truncone
1.2.2 Position/Title and reporting
responsibilities Sales Manager, State & Local
1.2.3 Years of industry experience 11 years
1.2.4 Years in current position One (1) year
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Sales Manager, Keystone Geography; oversees
account managers handling NASPO ValuePoint
members, maintains regional relationships with
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1.2 Key Personnel
Required Information Offeror’s Response
publishers/manufacturers, long-term contract
success strategy
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Clayton Boras
1.2.2 Position/Title and reporting
responsibilities Sales Manager, State & Local
1.2.3 Years of industry experience 17 years
1.2.4 Years in current position 12 years
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Sales Manager, Keystone Geography; oversees
account managers handling NASPO ValuePoint
members, maintains regional relationships with
publishers/manufacturers, long-term contract
success strategy
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Dave Stephens
1.2.2 Position/Title and reporting
responsibilities Business Development Manager, Public Safety
1.2.3 Years of industry experience 30 years
1.2.4 Years in current position Seven (7) years
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Business Development, Northwest and Pacific
Geographies (15 states); works with
publishers/manufacturers and NASPO ValuePoint
customers to determine best-fit solution options
K–12 Sales
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Russell Keene
1.2.2 Position/Title and reporting
responsibilities Sales Manager, K–12 Sales
1.2.3 Years of industry experience 19 years
1.2.4 Years in current position 12 years
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Sales Manager, Pacific Geography (includes
Arizona, Hawaii); oversees account managers
handling NASPO ValuePoint members, maintains
regional relationships with
publishers/manufacturers, long-term contract
success strategy
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1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Alex Haycock
1.2.2 Position/Title and reporting
responsibilities Sales Manager, K–12 Sales
1.2.3 Years of industry experience Five (5) years
1.2.4 Years in current position One (1) year
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Sales Manager, North Pacific (California and
Alaska) Geography; oversees account managers
handling NASPO ValuePoint members, maintains
regional relationships with
publishers/manufacturers, long-term contract
success strategy
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Sean Galligan
1.2.2 Position/Title and reporting
responsibilities Sales Manager, K–12 Sales
1.2.3 Years of industry experience Eight (8) years
1.2.4 Years in current position One (1) year
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Sales Manager, New England Geography;
oversees account managers handling NASPO
ValuePoint members, maintains regional
relationships with publishers/manufacturers, long-
term contract success strategy
Higher Education Sales
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Mike Clinton
1.2.2 Position/Title and reporting
responsibilities Sales Manager, Higher Education
1.2.3 Years of industry experience 13 years
1.2.4 Years in current position One (1) year
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Sales Manager, Northwest Geography; oversees
account managers handling NASPO ValuePoint
members, maintains regional relationships with
publishers/manufacturers, long-term contract
success strategy
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Chris Webb
1.2.2 Position/Title and reporting
responsibilities Business Development Manager, Higher Education
1.2.3 Years of industry experience 11 years
1.2.4 Years in current position Seven (7) years
1.2.5 Proposed role relative to Offered Business Development, National Contracts; works DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6051887
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1.2 Key Personnel
Required Information Offeror’s Response
services. Include the functions and tasks for
which they will have prime responsibilities.
with publishers/manufacturers and NASPO
ValuePoint customers to determine best-fit solution
options
1.2 Key Personnel
Required Information Offeror’s Response
1.2.1 Name Eric Goff
1.2.2 Position/Title and reporting
responsibilities Sales Manager, Higher Education
1.2.3 Years of industry experience 15 years
1.2.4 Years in current position Seven (7) years
1.2.5 Proposed role relative to Offered
services. Include the functions and tasks for
which they will have prime responsibilities.
Sales Manager, Pacific Geography; oversees
account managers handling NASPO ValuePoint
members, maintains regional relationships with
publishers/manufacturers, long-term contract
success strategy
Requirement
1.2.6 In addition, provide a brief resume which contains education/credentials/certifications/employment.
Response
Resumes for the named key personnel in the previous requirement are featured at the end of this section, in the following order:
Jumana Dihu
Gabriel Adler
Gabe Arias
Jason Schwartz
Michael Truncone
Clayton Boras
Dave Stephens
Russell Keene
Alex Haycock
Sean Galligan
Mike Clinton
Chris Webb
Eric Goff
Requirement
1.3 Account Management Team —Provide a description of the responsibilities of the dedicated account management team(s) that would be assigned to each Participating State under resultant contract. Include a description of how the account management structure ensures that service will continue despite vacations, illness, other absences or resignations.
Response
Whenever an account manager (AM) is out of the office (e.g., vacation, illness, absence), they designate a fellow coworker to assist their customers, leaving no gap in support.
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This designated backup AM will be an individual who supports other NASPO ValuePoint customers, to ensure knowledge of contract requirements. As an extra point of redundancy, customers can also reach out to our CDW·G general sales support team at the following:
Phone: 800.808.4239
Email: [email protected]
Chat: www.cdwg.com
Our Connecticut-based team staffing these lines of communication is available Monday- Friday, 7am-6pm CST. In instances of coworker resignation, the sales manager overseeing a given account team will assign the departing AM’s customers to an experienced account manager who possesses familiarity with the NASPO ValuePoint contract and purchase history.
Account managers are proactively available to their customers to make regular solution recommendations, in addition to addressing support concerns. For more familiar and less complex public-sector software solutions, the AM can call our Supplemental Presales Support line to assist with product research, competitive comparison, simple design, standard architecture, and more. If necessary, the AM will include the customer on this call to further craft the best solution.
With complex customer requests or solutions, the AM engages our software licensing team, and their technology specialists and solution architects. Within 48 hours of the initial request, this group works out an offer/solution to present to the customer, including (but not limited to) features, cost analysis, licensing agreement/contract details, interoperability with current environment, implementation actions, and any available maintenance or software assurance programs.
Sales managers work with our AMs to develop strategies that best serve customers for long-term success. They spend significant time meeting with customers to understand the dynamics of the local market, and will ensure NASPO ValuePoint customers receive full advantage of CDW·G’s software offerings. Additionally, sales managers are responsible for building and maintaining strong relationships with our top manufacturing partners in each region. For example, leveraging a strong existing relationship with the area Symantec representative can provide contract-specific cost savings that benefit NASPO ValuePoint members.
When the number of customers being supported in a particular geographic location reaches a certain capacity, CDW·G dedicates a local resource to support the group. Field account managers work jointly with our AMs to provide comprehensive sales support, and are available for onsite business meetings as needed to offer project development, technical expertise, roadmapping, and business reviews.
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These coworkers are responsible for promoting the contract to end-users, including free trainings in the field, presentations, and attendance at regional tech fairs. They will meet with NASPO ValuePoint, the LSCA, or agency customers for contract status and progress reports, and will assist in solving customer-service issues in the field.
Requirement
1.4 Subcontractors—Provide the following information for items 1.4.1 through 1.4.3, using the format below, for any subcontractors you propose to use.
1.4.1 Name of individual or company;
1.4.2 Proposed work to be performed;
1.4.3 Approximate percentage of work directed to subcontractor relative to total work under a resultant contract;
1.4.4 In addition, provide a brief resume which contains education / credentials / certifications / employment.
Response
For the purposes of this RFP, at the time of this submission, CDW·G is not proposing the use of any subcontracting partners.
2. Company’s Experience
Requirement
Describe the Offeror’s experience and expertise providing the following services:
2.1 Account Management (assume ‘accoun ts’ as equivalent to a state contract, and to a using municipality).
Response
Expert contract support is a hallmark of CDW·G’s program management team. Most vendors—even large resellers —neglect to have a team devoted to managing their contracts, instead relying on salespeople for compliance and reporting issues, which can result in delayed responses, unreliable support, and potentially faulty reporting. CDW·G, however, understands that contracts are serious commitments, and we honor these commitments through our dedicated program management team.
Jumana Dihu will manage the NASPO ValuePoint SVAR contract and agreements. Ms.
Dihu has over a decade of contract management experience and has been supporting our NASPO ValuePoint reseller agreements for over two years. Our account teams and manufacturing partners know Ms. Dihu is the resident expert for our NASPO ValuePoint contracts and often reach out to her for assistance on related issues. Other knowledgeable program managers will be actively supporting the contract, both as out-of-office backup for Ms. Dihu or in a scenario where she transitions to a new career level.
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To support our NASPO ValuePoint customers, CDW·G provides one primary point-of- contact—an account manager (as described in requirement 1.3). Our account managers, their supporting product specialists, and their sales managers understand the current technology trends and are specialized to only work public-sector customers. The multiple teams that will be supporting the participating states are, by and large, generalists; they understand the broad range of equipment and services we offer and often have sales certifications for several leading manufacturers. Rather than organizing our account teams by solution type, we’ve seen greater customer benefit organizing them by the type and location of the patrons they serve.
By asking our generalist sales teams to have laser-like focus on their customers and a strong general understanding of our product offering, we ensure that we’re matching the right products to each customer’s highly individual needs. For this reason, we go through the effort of breaking down the geography that each of our account managers covers by having them work with customers that are closely located to each other.
This is done because we understand that our government customers like to benchmark how they purchase and what they purchase in relation to their neighbors. Due to this degree of granularity when distributing accounts, our account managers can propose products that an agency’s counterpart is using in the next town, middle school, or university in many instances from personal experience.
However, we recognize that some of our products and services are so complex that a generalist’s approach is not enough. That is where our specialized sales force comes in.
Similar to the general account teams, our specialists are split between in-house teams and field teams. They are organized primarily around technology type (e.g., cloud, mobility, data centers, etc.) and secondarily around customer type. If an account manager or field account executive requires additional depth of knowledge for a certain type of solution, they’ll call in their specialist resources.
Requirement
2.2 License Management.
Response
The Software Licensing Support Team is vital in ensuring purchases that are scalable and complement software that is currently in place, as well as those forecasted for future projects. Our software support team includes over 85 Software Licensing Specialists, 250 Presales Systems Engineers, and 45 Licensing Account Executives. They assist with the full scope of software licensing and assist customers with leveraging their buying power for software purchases; provide the right mix of software products; and offer cost analysis of available discounts and credits.
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Dedicated account managers will help NASPO ValuePoint customers with software license management needs. License management is detailed further in Attachment B.
Requirement
2.3 Training
Response
After the six-week intensive training members of our sales team undergo, they continue to receive an average of 165 hours of training in their first year at CDW·G, and participate in more than 140 hours in each subsequent year of employment. Our sales teams are also proactive in being certified experts in the products they sell, with proof of this dedication in the numbers. For example, we have over 1,500 VMware Sales Professionals (VSPs) on staff; the result is more leads generated, stronger customer relationships, and the ability to help our customers prioritize their technology needs.
Requirement
2.4 Software Advisement
Response
The software-specific coworkers of CDW·G who collaborate with our account managers to help advise customers on their right-size solution include the following:
Software Licensing Specialists (SLS). This team is certified in a wide array of the licensing programs members seek. SLSs are dedicated to assisting customers in understanding and navigating complex licensing options for the top software publishers. They help compare key features of different programs, and ensure interoperability of products and the accuracy and comprehensiveness of software quotes. They assist users in finding the best software to fit their needs, along with the most advantageous licensing level.
Partner Specialists. These individuals provide insight into product features and functionality, making sure that software is being sold correctly. Among their duties, they provide accurate licensing solutions. The Partner Specialist teams providing support to CDW·G solutions include over 30 experts focused on our software offering. These coworkers are designated to a specific brand, such as Microsoft, or to a solution, such as cloud. This relates to expert assistance for not only key itemized manufacturers, but to all the publishers users are purchasing. Cloud Client Executives (CCE). Similar to our SLS team, our 14 CCEs work with our customers to provide guidance and optional engagements to align their unique business goals with a cloud plan that provides maximum benefits.
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Requirement
2.5 Other (specify)
Response
CDW·G also leverages the following resources to provide unmatched support for customers’ IT solutions:
Engineers
Also included in our recognizable attributes is an investment in engineers that are available to help design custom solutions. We have the largest team of engineers when compared to our direct IT competitors, more on par with the big integrator firms that serve the federal market—such as Boeing—than other potential respondents. Through the account teams located in strategic geographies across the nation, our engineers provide customers design and consultative services at no additional charge.
Partner Resources
Many of our OEM partners have staff dedicated to support CDW•G customers exclusively.
In March 2015, over 340 partner coworkers from over 100 various partners were collocated with CDW•G, collaborating with our sales teams and engineers to provide expert help to our customers. The wide variety of partners that are onsite allows us to help customers analyze the best value among the products under consideration and provide the right product for each customer the first time.
Distribution Facilities
Our distribution infrastructure is another key reason why no other IT solution provider in the industry can match our ability to service NASPO ValuePoint customers. As our number of orders has increased across the public and corporate sector, we continue to achieve higher order accuracy year over year. We own two distribution centers that have one million square feet of storage space and stock over $200 million in inventory at any given time.
This combination of stock and shipping infrastructure allows us to ship on average 37,000 boxes per day. Despite all of these capabilities, we do not solely rely on our facilities to meet customer needs; we complement our own distribution centers with our distribution partner network, leveraging the most cost-effective solution for each individual product line and customer order.
Distribution Partner Network
Our Distribution Partner Network includes over 130 different suppliers, meaning we can provide any solution customers need. Similarly to our OEM partners, we’re the largest partner for many of our distributors. Like our manufacturer partner relationships, this results in direct benefits for CDW•G, which we pass along to our customers.
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NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-15
Most partners send us EDI (Electronic Data Interchange) downloads or real time information on their available inventory, resulting in access to products usually in as little as a day. As an example, we are a top Ingram Micro partner and hold Elite Partner status. This partnership provides a customized and exclusive support resource to our account teams and customers, among other benefits.
3. Clients
Requirement
3.1 Provide information on Offeror’s current government client list. 3.1.1 Explain the services provided to each and how long Offeror has been working with each.
Response
CDW·G has vested partnerships with nearly every government entity in the US. For insight into our customer base, we served over 5,200 customers in 2014 on our NASPO ValuePoint reseller agreements alone.
Our 2014 net sales to federal, state, and local governments totaled $1.5 billion; state and local government sales accounted for approximately 41 percent of these net sales. The top product categories provided to state and local government customers included software, notebooks/mobile devices, and enterprise storage. Specific to this RFP, software is a multibillion-dollar component of CDW’s net revenue.
As a whole, we manage more than 25,000 software agreements and conduct over 18,000 software renewals annually. Additionally, we offer electronic delivery of many of our software solutions (about one-fifth of our total revenue). Many of these product sales were components of integrated solutions and coupled with services typical of solutions, such as Data Center, Unified Communications and Collaboration, Security, Mobility, and Cloud.
The average customer relationship for CDW, as a whole, is eight years. Our government customers sit at the highest end of the average, as our corporate customer relationships are typically no more than three years. Multiyear contracts and the cultivation of personal connections between customer and account manager attribute greatly to the lengthy tenure of these government relationships.
Requirement
3.1.2 List government contracts Offeror ha s gained over the past three (3) years. Provide an explanation of why Offeror was chosen.
Response
CDW·G has gained 363 public-sector contracts (non-federal) over the past (3) years; the list of these contracts is attached to this section of our response.
Most often, customers select CDW·G for contract award due to our capacity for managing large-scale agreements, as well as the value we can provide their purchasers and end- DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6121894
NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-16
users. Unique differentiators that lead to an award decision include our vendor agnosticism and the investment of ongoing sales training to best serve our customers. CDW·G employs over 1,300 account managers, meaning that size and consistency of support staff is a consistent development initiative in order to support national contracts such as NASPO ValuePoint with any necessary transitions.
Requirement
3.1.3 List government contracts Offeror has lost or resigned over the past three (3) years. Provide an explanation of why they were lost or resigned.
Response
As you can see from the following table, of the total 512 contracts lost or resigned, we were named to a new contract in 211 instances and awarded upon rebid in 73 instances, meaning that over half of the no-longer-current contracts are in new iterations being held by CDW·G.
3.1.3 Lost or Resigned Government Contracts
Reason Number
Agreement out to RFP 1
Agreement rebid and awarded to CDW·G 73
Agreement rebid and not awarded to CDW·G 7
CDW·G was named to a new Contract 211
Contract may be renewed, pending NY OGS 9
Moved purchasing to local cooperative agreements 7
Signed a new agreement 11
Unknown reason 82
We are still awaiting renewal 3
OEM did not sign a new contract 22
Contract expired and was not rebid/renewed 86
GRAND TOTAL 512
A full list is attached to this section of the response, as well.
Through the normal course of business, CDW·G’s contract portfolio changes year to year.
Contracts in the Public segment are generally terminable at any time for convenience of the contracting agency or group purchasing organization (GPO) or upon default. An adverse change in government spending policies (including ongoing budget cuts), budget priorities, or revenue levels could cause our government customers to reduce their purchases or to terminate or not renew their contracts with us. In the past three (3) years, CDW·G has not lost a contract to default. The primary reason our contracts end is when a customer is out of available options to extend the contract.
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NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-17
Requirement
3.2 If Offeror has no government clients, note t his in your response and answer questions 3.1.1 through 3.1.3 based on non-government clients.
Response
As detailed, CDW·G has a substantial number of government clients. We provide our responses to 3.1.1 through 3.1.3 to reflect these relationships.
Requirement
3.3 References —Provide information for three (3) client references that replicate or are similar to the requirements of this solicitation. All references shall be for engagements received and completed within the last five (5) years. The State may, at its sole discretion, contact additional clients not presented as references.
Reference information is to be provided using the following table format:
Response
The following references are submitted for NASPO ValuePoint review.
3.3 References
Reference
Information Client One Client Two Client Three
Company
Name
State of Illinois Central
Management Services
(CMS)
Federal Aviation
Administration (FAA) University of Washington
Type of
Contract
Product and
Services
Delivered
CDW·G’s IL CMS
Microsoft Large Account
Reseller contract
includes Microsoft
Select, Enterprise
Agreements, and
Microsoft Academic
Select. CMS currently
has both a Microsoft
Select and an
Enterprise Agreement.
CDW·G has held this
contract for three
consecutive iterations,
starting in 2005. The
current contract,
recently awarded,
expires September
2019.
Software contract includes
but is not limited to ACD
Systems, Software AG,
EMC, HP, IBM, Oracle, and
Symantec (among dozens
of other publishers,
including “weirdware”). With
CDW·G has grown
software sales from $5
million the first year of the
contract to $26 million in
GFY15, and grown
hardware sales from $15
million to $37 million.
Both catalog contracts
(Software DTFACT-13-D-
00004, Hardware
DTFAWA-11-D-00057) are
administered by the SAVES
Contracts Office;
mandatory for the FAA and
open to the Department of
Transportation
Software agreements
under contract include
Microsoft EES
Agreement, VMware
ELA, Citrix ELA, Adobe
CLP (all Adobe products
= 1,000+ orders
annually)
Support through
assessing changes in
UW’s licensing needs,
deploying software to
end-users, providing
guidance on new
licensing/support
structures, renewing
maintenance for all
OEMs, identifying large
spend of similar products
across campus to drive
campus-wide
agreements that reduce
cost
Contact Name,
Mailing
Address,
Phone
Number, Email
James Ellenburg,
Contracting Officer
120 W Jefferson
3rd Floor
Springfield, IL 62702
Harry Lutz, Contracting
Officer
USDOT/FAA
800 Independence Ave SW
Washington, DC 20591
Ray Hsu, Assistant
Director, Procurement
Services
4300 Roosevelt Way NE
Seattle, WA 98195
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NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-18
3.3 References
Reference
Information Client One Client Two Client Three
Address P: 217.785.0897
E:
james.ellenburg@illinois
.gov
P: 609.485.6127
E: [email protected]
Elizabeth Ford Ochs,
Authorized Contract Officer
P: 609.485.5557
E: [email protected]
Robert Cochran,
Contracting Officer
Representative
P: 571.209.3111
E: [email protected]
P: 206.543.0793
E: [email protected]
Contract Start
and End Date
October 2015-
November 2019
Software: May 2013-April
2018
Hardware: September
2011-September 2016
2010-2020 (10-year
renewal)
Contract Value
Estimated $140
million/duration of
contract
Software: sales through
September 2015 = $52
million
Hardware: sales through
September 2015 = $96
million
$5 million/annual
4. Financial/Accounting Information and
Disclosures
Requirement
4.1 Offeror must provide evidence of financial stability and capability to fund all cost associated with providing the services through the term of the Contract. The latest two (2) years audited annual financial statement(s), including Total Revenue, Net Income, and Total Assets, must be submitted with the Offeror’s Offer. If audited financial data is unavailable, explain in full the reason and provide latest non-audited financial information to include Balance Sheet, Income Statement, as well as, Statement of Cash flows and Change in Financial position. Include information to attest to the accuracy of the information provided.
Response
Included at the end of this attachment are CDW’s most recent 10K audit reports (2013 and 2014); audited financial statements are located in Item 8: Financial Statements and Supplementary Data.
CDW Financial Information
2014 2013
Total Revenue (listed as Net Sales) $12,074.5 million $10,768.6 million Net Income $244.9 million $132.8 million
Total Assets $6,099.9 million $5,924.6 million
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6151897
NASPO ValuePoint | Software Value-Added Reseller Services Attachment A: CDW·G Qualifications | A-19
Online versions of these documents are also located at investor.cdw.com.
4.2 Disclosures
Requirement
4.2.1 Information regarding any irregularities that were discovered in any account maintained by the Offeror on behalf of others. Describe the circumstances and disposition of the irregularities.
Response
To the best of our knowledge, at the time of this submission, accounts maintained by CDW on behalf of others have not been subject to any irregularities of circumstance or disposition.
Requirement
4.2.2 Full disclosure of any potential conflict of interest, i.e. serving as a member, board member, officer, or having significant financial interest with any company, firm or joint venture with interests in the provision of software.
Response
To the best of our knowledge, at the time of this submission, CDW does not have any potential conflicts of interest that would prevent us from serving NASPO ValuePoint members via this contract.
Requirement
4.2.3 Whether or not, in the last ten (10) years, the Offeror has filed (or had filed against it) any bankruptcy or insolvency proceeding, whether voluntary or involuntary, or undergone the appointment of a receiver, trustee, or assignee for the benefit of creditors, and if so, an explanation providing relevant details; Response
To the best of our knowledge, at the time of this submission, CDW has not filed (nor had filed against it) any bankruptcy or insolvency proceeding. No receiver, trustee, or assignee for the benefit of creditors has been specifically appointed.
Requirement
4.2.4 Whether or not there are any pending Securities Exchange Commission investigations involving the Offeror, and if such are pending or in progress, an explanation providing relevant details and an at tached opinion of counsel as to whether the pending investigation(s) may impair the Offeror’s performance in a Contract under this RFP.
Response
On 29 October 2015, CDW (the Company) received a request for production of documents in connection with an investigation by the SEC of our vendor partner program incentives.
We are cooperating with the SEC in this matter.
The Company is party to various legal proceedings that arise in the ordinary course of its business, which include commercial, intellectual property, employment, tort, and other litigation matters.
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The Company is also subject to audit by federal, state, and local authorities by various partners, group purchasing organizations, and customers (e.g., government agencies) relating to purchases and sales under various contracts. In addition, the Company is subject to indemnification claims under various contracts. From time to time, certain customers of the Company file voluntary petitions for reorganization or liquidation under the US bankruptcy laws. In such cases, certain pre-petition payments received by the Company could be considered preference items and subject to return to the bankruptcy administrator.
As of 30 September 2015, the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company’s financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one of more of these proceedings or matters.
Requirement
4.2.5 Documenting all open or pending litigation initiated by the Offeror or where the Offeror is a dependent or party in litigation that may have a material impact on Offeror’s ability to deliver the contracted services; Response
To the best of our knowledge, at the time of this submission, CDW does not have any open or pending litigation that would present a material impact on our ability to deliver the contracted services.
Requirement
4.2.6 Full disclosure of any public sector contracts terminated for cause or convenience in the past five (5) years.
Response
To the best of our knowledge, at the time of this submission, CDW has not had any public sector contracts terminated for cause or convenience in the past five (5) years.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6171899
Jumana Dihu
Relevant Experience
CDW
Program Manager (2013–Present)
Manages contract portfolio for healthcare, higher education, K–12, state & local sales segments within CDW Government LLC
Responsible for full range of customer-facing contracts and partner contracts, including master purchase agreement, subcontractor agreements, teaming agreements, referral agreements
Initiates and responds to requests for contract changes, product substitutions, technical refreshments
Facilitates preliminary dispute resolution and coordinates with legal department as necessary to maintain customer satisfaction and bring prompt closure Ensures document compliance and analyzes success of program to make recommendations for improvement, including product add/drop, offer expansion Manages all reporting capabilities for high-visibility contracts Sirva, Inc.
Program Manager (2002–2013)
Handled contract negotiation, cost/price analysis, compliance, market and channel analysis, development of strategic initiatives, and directed business goals and project management Education
BS, International Economics, DePaul University
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6181900
Gabriel Adler
Relevant Experience
CDW
Sales Manager, Software Solutions (2014—Present)
Responsible for software sales in multiple public-sector segments with CDW Government LLC (e.g., federal, state & local, K–12, higher education) Manages team of six inside software solution and licensing sellers, five outside software solution and licensing sellers
Manages continuous pipeline of software number, including cascade of forecast to upper management
Goes in-market with field sellers and interfaces with clients Develops coworkers via education around products, services, solutions Program Manager, Software Sales (2011–2014)
Responsible for multiple software programs, including Microsoft T36 Contract Management, Select Plus, NGVL (Next Generation Volume Licensing), OTRR (On Time Renewal Rate), Licensing Help Desk
Microsoft Inside Enterprise Licensing Specialist (2009–2011) Microsoft Sales Executive (2006–2009)
AMSB Account Manager (2005–2006)
Dave Adler, Inc.
Controller & Lead Sales Person
Education
BA, Business, Northeastern Illinois University
Professional Memberships
International Association of Web Masters and Designers
Skills
Microsoft Office Suite (Excel,
Word, Access, Outlook)
Microsoft FrontPage
HTML Programmer
Adobe Photoshop
Cute FTP
Adapta 2000
Microsoft Certified Professional—
SAM (Software Asset
Management)
Microsoft ESA/LAR FY09 Certified
VMware VSP 5.5
Citrix CSP
AS/400
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6191901
Gabe Arias
Relevant Experience
CDW
Licensing Account Executive (2011–Present)
Supports state & local government customers manage software investments, including Microsoft volume licensing
Builds trusted client relationships at CIO/Director level within state agencies, counties, cities
Presents CDW Government LLC’s software solution capabilities at client-facing meetings, hosted events, selected software partner events Acts as subject matter expert for all Microsoft licensing agreements, VMware, Adobe, Citrix, Red Hat, HP, IBM, and professional services offerings Manages multiple government contracts, answers complex licensing and product questions/scenarios, supports CDW account teams, proactively manages client software business (e.g., EA enrollment process, QBRs, trend analysis, technology briefings)
Dell, Inc.
Licensing Specialist, Global Accounts (2007–2011)
Focused on software and service solutions for large Enterprise and global segment ASAP Software
Inside Account Manager (2006–2007)
Education
BS, Marketing, Illinois State University
Awards, Certifications & Trainings
Certified Microsoft Licensing
Expert
CDW·G Most Valuable Player,
Software Team (2013, 2015)
CDW Presidents Achievement
(2014)
Classroom Training Program
Sales Leadership Training
Yellow Belt Certification Training
Microsoft Solution Selling Training
Cloud Computing & Virtualization
Conference
Microsoft Volume Licensing
Certification
VMware Licensing Certification
Symantec Licensing Certification
Citrix Licensing Certification
Oracle Licensing Certification
IBM Licensing Certification
Effective Presentations Training
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6201902
Jason Schwartz
Relevant Experience
CDW
Sales Manager, State & Local Sales (2015–Present)
Manages 20 account managers supporting state & local government customers in California, Arizona, Alaska, and Hawaii
Builds relationships with coworkers, customers, partners for both small and large enterprises in the public sector
Leads team of sales professionals through motivational coaching, effective partner management, and customer engagement
Consistently interacts with field personnel, customer base, and OEM partners Performs business pipeline review calls with sales teams to ensure financial objectives are achieved monthly, quarterly, and annually Sales Manager, Sales Academy (2014–2015)
Responsible for onboarding account managers hired into Medium Large Central and South regions and Small Business teams; developed individual coaching plans for each account manager
Senior Account Manager (2010–2014)
Achieved strong sales results with higher education customers through consultative selling of hardware, software, and professional services solutions to assist in long-term strategic IT plan of each customer
Education
BA, Political Science & Business Administration, University of Iowa DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6211903
Michael Truncone
Relevant Experience
CDW
Sales Manager, State & Local Sales (2015–Present)
Travels to discover, develop, and increase relationships with key clients, manufacturers, and service business partners
Performs business pipeline reviews with sales teams to ensure financial objectives are achieved monthly, quarterly, and annually
Conducts services scope reviews on opportunities with integration services to ensure successful project execution
Executive Account Manager (2005–2015)
Worked to develop partner relationships while holding weekly cadence with partners including Cisco, HP, and Lenovo
Demonstrated consistent sales growth throughout career Pursued relevant certifications within IT field, including partners HP, NetApp, EMC, Cisco, and Microsoft
Participated in Emerging Leaders Program
Worked efficiently and effectively while coordinating and managing within large sales organization
Coached and developed high-performing coworkers
Education
BA, Economics & Business Administration, University of Connecticut DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6221904
Clayton Boras
Relevant Experience
CDW
Sales Manager, Higher Education (2011–Present)
Supervises 20 inside sales and field sales personnel supporting higher education business in Northeast and Keystone geographies
Develops team members with career opportunities in Emerging Leaders program and promotion to Sales Operations
Consistently interacts with field personnel, customer base, and OEM partners Lead sales team ranked #1 in Higher Education (2012)
Executes large higher education wins for hardware, software, licensing, and services solutions
Sales Manager, K–12 Sales (2007–2011)
Oversaw 22 internal sales and two field sales personnel supporting K–12 education business for Keystone geography
Created sales strategies to identify lucrative contract opportunities and leveraged vendor relationships to achieve significant sales and gain visibility Interfaced with vendors, executive management contracts for key accounts, and information technology, purchasing, and general services personnel at state level Regional Sales Manager (2003–2007)
Territory Sales Manager (2001–2003)
Micro Warehouse Inc.
Group Business Unit Education Manager (1999–2003)
Strategic Business Unit Account Manager (1998–1999)
Education
MBA, Marketing, Sacred Heart University
BS, Finance, Sacred Heart University
Awards & Certifications
CDW Presidents Club Achievement Award (2008, 2012)
CDW #1 Ranked K–12 Sales Manager (2003, 2008)
CDW #1 Ranked Higher Education Sales Manager (2012)
Mitsubishi Sales Award (2006-2009)
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6231905
Dave Stephens
Relevant Experience
CDW
Business Development Manager, Public Safety (2010–Present) Manages sales engineering process for large-scale integration projects involving public safety agencies
Provides subject matter expertise to CDW Government LLC resources and offers resource training, as well as partner development and management Presents at state, regional, and national public safety conferences on topics such as mobility, digital evidence management, CJIS mandate compliance Senior Field Account Executive (2002–2010)
Worked with account teams to grow state & local government marketplace; additionally developed high-visibility opportunities within specific sales geography CATG Inc. dba MBS CONNECTING POINT
Operation Director (2000–2001)
President and General Manager (1999–2000)
National Sales Manager (1997–1999)
State Contract Sales Manager (1991–1997)
Account Manager (1988–1990)
VALCOM COMPUTER
Account/Assistant/Service Manager (1984–1988)
Education
BA, Data Processing & Business Administration, Weber State University DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6241906
Russell Keene
Relevant Experience
CDW
Sales Manager, K–12 Sales (2006–Present)
Trains and manages inside sales team of 27 account managers covering K–12 accounts in California, Arizona, Alaska, and Hawaii
Manages a team of six field account executives in California and Arizona Travels to discover, develop, and increase relationships with key clients, manufacturers, and service business partners
Performs business pipeline reviews with sales teams to ensure financial objectives are achieved monthly, quarterly, and annually
Conducts services scope reviews on opportunities with integration services to ensure successful project execution
Acts as Education liaison for CDW Emerging Leaders Program Analyzes contracts prior to RFP response submission to ensure positive outcome and acceptable company risk
District Manager, Northwest & Pacific Regions (2005–2006) Created regional business plan leading to sales increase and trained/coached inside account teams covering customers in western US
Senior Account Manager (1997–2005)
Proactively targeted key contracts and successfully bid to further business opportunities while acting as team mentor for new sales coworkers
Education
BS, Marketing, North Central College
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6251907
Alex Haycock
Relevant Experience
CDW
Sales Manager, K–12 Sales (2015–Present)
Mentors account team with various lengths of tenure across multiple CDW segments Leads account team to exceed goals via one-on-one coaching and focused selling efforts
Builds strong relationships with vendor partners, inside sales reps, and field resources to ensure customer satisfaction and support
Senior Account Manager (2014–2015)
Guided peers through daily and monthly sales activities while maintaining and expanding customer relationships in Aggregation Services team
Account Manager (2011–2014)
Developed strong and long-lasting relationships with back-end departments and vendors to become consistent and reliable resource to customers and colleagues Education
BA, Business Administration, Columbia College
Awards & Certifications
Cisco CCE
EMC Sales Professional
NetApp Sales Professional
VMware Sales Professional
Tripp Lite Sales Professional
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6261908
Sean Galligan
Relevant Experience
CDW
Sales Manager, K–12 Sales (2014–Present)
Manages recruitment, selection, training, and coaching of 18 direct reports handling millions in total business to ensure sales goals are met Drives business growth by capitalizing on new revenue potential in existing markets in New England geography
Leverages strategic relationships with customers, peers, and vendor partners Provides customer service management and problem resolution training and mentorship
Utilizes knowledge of partner sales programs and procedures to effectively steer sales growth projects with key partners such as Cisco, NetApp, VMware, and Aruba Account Manager (2007–2014)
Managed, fostered, and maintained successful working relationship with multiple vendor partners in K–12 education IT sales
Nielsen Media Research
Sports Product Placement Auditor (2006–2007)
Edited and evaluated analysis of sports marketing initiatives of product vendors, athletic teams, sports venues to assist in formulation of appropriate business strategy Sports Product Placement Analyst (2005–2006)
Education
BBA, Finance, University of Connecticut
Awards & Certifications
Cisco Sales Expert
NetApp Accredited Sales Professional
Microsoft Sales Accreditation
EMC Velocity Sales Accreditation
Major Projects
Project Name 1 (Project Date), 5-7 word description
Project Name 2 (Project Date), 5-7 word description
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6271909
Mike Clinton
Relevant Experience
CDW
Sales Manager, Higher Education (2015–Present)
Covers higher education sales in Northwest geography
Leads experienced inside and outside sales team to sell best-in-class manufacturers and technology from Cisco, Lenovo, Microsoft, Adobe, VMware, etc.
Principal ISA, Unified Communications (2008–2015)
Subject matter expert for CDW’s unified communications portfolio to customers, colleagues, account managers
Assessed customer business goals and technical requirements to develop UC strategies
Leveraged extensive knowledge of CDW’s Professional Services to provide customers with turnkey solutions
Supported Med/Lar, nonprofit, and healthcare teams
Senior Account Manager, Med/Lar (2002–2008)
Provided IT solutions and services to mid-market and Enterprise clients Education
BS, Telecommunications Management, DeVry University
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6281910
Chris Webb
Relevant Experience
CDW
Business Development Manager, Higher Education (2015–Present) Owns higher-education strategy for contracts, eProcurement, and key OEM partnership in CDW Government LLC
Directs team of five field-based business development resources focuses on higher education market
Builds strategic partnerships with key OEM partners, providers, and third-party service organizations
Drives customer relationships through C-level engagement, partnership reviews, mutually beneficial contracts
Reports to VP, Higher Education Sales
Business Development, Higher Education (2008–2015)
Positioned CDW and negotiated contracts for west coast higher education business Conducted business reviews with executive-level large clients to identify growth opportunities
Sales Manager, Higher Education (2007–2008)
Led team of 18 account mangers covering higher education in mid-Atlantic and Keystone geographies
Inside Account Manager, K–12 Education (2005–2007)
Proactively sought new customers and innovative ways to solve the technology needs of K– 12 education
Education
BS, Information Systems, Wake Forest University
Awards & Certifications
CDW Annual Sales Top Performers (2005, 2006, 2007)
CDW #1 Higher Education/Sales Manager (2008)
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6291911
Eric Goff
Relevant Experience
CDW
Sales Manager, Higher Education, Pacific Region (2009–Present) Manages day-to-day sales team activities to achieve financial plan, interacting with direct reports, coworkers, customers, and partners
Responsible for two territories consisting of 15 states; develops, improves, and maintains customer and partner relationships
Hosts meetings, delivers presentations, conducts onsite visits, develops plans and strategic planning sessions, handles contract negotiation Works effectively with internal and external stakeholders to achieve business objectives and exceed sales goals
Motivates and coaches sales team, educates and teams with OEM partners, engages customers to provide consultation and value
Sales Manager, Corporate Academy (2007–2009)
Responsible for managing newest sales representatives, coaching effective career strategies, and providing selling assistance
Account Manager (2001–2007)
Responsible for corporate accounts across the country (focus on Northern California) Education
BS, Marketing, Illinois State University
Awards & Certifications
CDW Presidents Achievement Award of Excellence (2009, 2014) Public Sales Manager Advisory Council (PSMAC)
Higher Education liaison, CDW Emerging Leaders Program DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6301912
GAINED GOVERNMENT CONTRACTS
Issuing Agency Contract Title Start Date Exp Date
Academy School District 20 Peripheral Purchase Agreement 07/10/2015 07/31/2016 Alabama Joint Purchasing Program ALJP 2013 - HP Networking 03/08/2013 03/08/2016 Alabama Joint Purchasing Program ALJP 2013 - NEC 03/08/2013 03/08/2016 Alabama Joint Purchasing Program ALJP 2013 - Lenovo 03/08/2013 03/08/2016 Alabama Joint Purchasing Program ALJP2015-0102 GoGuardian 07/06/2015 07/01/2017 Alabama Joint Purchasing Program ALJP2015-0113: Microsoft Hardware 07/29/2015 06/30/2017 American Lebanese Syrian Associated Charities, Inc (ALSAC) Master Services and Product Sales Agreement be 12/18/2013 12/18/2015 American Public University System Master Product Sales Agreement 04/15/2013 04/14/2016 Arlington Independent School District Computer, AV Equipment, Supplies and Services 07/01/2015 06/30/2016 Aruba Networks, Inc. California Aruba WSCA Data Communications 02/17/2015 05/31/2019 Aruba Networks, Inc. Aruba WSCA Data Communications 02/17/2015 05/31/2019 Aruba Networks, Inc. Florida Aruba NASPO Data Communications 05/11/2015 05/31/2019 Aruba Networks, Inc. Alaska Aruba NVP Data Communications 08/18/2015 05/31/2019 Aruba Networks, Inc. Nevada Aruba NVP Data Communications 08/19/2015 05/31/2019 Aruba Networks, Inc. Montana Aruba NVP Data Communications 08/24/2015 05/31/2019 Aruba Networks, Inc. New Jersey Aruba NVP Data Communications 08/24/2015 05/31/2019 Aruba Networks, Inc. South Carolina Aruba NVP Data Communications 08/24/2015 05/31/2019 Aruba Networks, Inc. Washington Aruba NVP Data Communications 08/24/2015 05/31/2019 Aruba Wireless Networks, Inc. Ohio STS Aruba 11/13/2014 06/30/2017 Associated Colleges of the Twin Cities NJPA Stretch Agreement 12/01/2014 11/18/2018 Association of Computer Technology Educators of Maine Master Product Sales Agreement 05/30/2014 05/30/2016 Baltimore City Public Schools Symantec Software Maintenance 07/01/2014 06/30/2017 Beaufort County School District APC Smart UPSs and Batteries 06/05/2015 06/04/2018 BJC Healthcare Mutual Non-Disclosure Agreement 11/20/2013 11/20/2016 Board of Regents of the Nevada System of Higher Education on behalf of Bus NJPA Stretch Agreement 12/01/2014 11/18/2018 Bossier Parish School Board Technology Catalog Contract 11/01/2015 10/31/2020 Brocade Communications Systems, Inc. State of Georgia Brocade 04/30/2013 06/30/2016 Brocade Communications Systems, Inc. Brocade WSCA Data Communications 07/10/2014 05/31/2019 Brocade Communications Systems, Inc. Alaska Brocade NVP Data Communications 07/10/2014 05/31/2019 Brocade Communications Systems, Inc. Delaware Brocade NVP Data Communications 07/10/2014 05/31/2019 Brocade Communications Systems, Inc. Montana Brocade NVP Data Communications 07/10/2014 05/31/2019 Brocade Communications Systems, Inc. Nevada Brocade NVP Data Communications 07/10/2014 05/31/2019 Brocade Communications Systems, Inc. South Dakota Brocade NVP Data Communication 07/10/2014 05/31/2019 Brocade Communications Systems, Inc. Washington Brocade NVP Data Communications 07/10/2014 05/31/2019 Brocade Communications Systems, Inc. Wyoming Brocade WSCA Data Communications 07/10/2014 05/31/2019 Brocade Communications Systems, Inc. New Jersey Brocade NVP Data Communications 09/08/2014 05/31/2019 Brocade Communications Systems, Inc. Wyoming Brocade NVP Data Communications 09/08/2014 05/31/2019 Brocade Communications Systems, Inc. California Brocade NVP Data Communications 09/09/2014 05/31/2019 Brocade Communications Systems, Inc. Oregon Brocade WSCA Data Communications 09/09/2014 05/31/2019 Brocade Communications Systems, Inc. Oregon Brocade NVP Data Communications 09/09/2014 05/31/2019 Brocade Communications Systems, Inc. Florida Brocade NVP Data Communications 10/06/2014 05/31/2019 Brocade Communications Systems, Inc. Hawaii Brocade NVP Data Communications 10/06/2014 05/31/2019 Brocade Communications Systems, Inc. South Carolina Brocade NVP Data Communicatio 07/14/2015 05/31/2019 Brocade Communications Systems, Inc. TX DIR Brocade 09/24/2014 08/13/2016 Brother International Corp. TX DIR Brother 06/05/2015 06/05/2016 Brother International Corporation NC Brother Printer 04/10/2013 03/31/2016 Brother International Corporation NY OGS Brother Printing and Imaging 11/06/2014 09/01/2017 Capistrano Unified School District Audio Visual Equipment 08/01/2015 07/31/2016 Carahsoft Technology Corp TX DIR Carahsoft/Adobe 08/29/2013 08/29/2016 Carahsoft Technology Corp Texas DIR Carahsoft/VMWare 03/13/2014 05/03/2016 Carahsoft Technology Corp Oklahoma OneNet Carahsoft/VMWare 04/15/2014 06/30/2016 Carahsoft Technology Corp OH STS Carahsoft/Nutanix 06/01/2015 12/19/2016 CESA Purchasing Technology Catalog 03/01/2014 02/29/2016 Chicago Public Schools Audio Visual Equipment 08/01/2013 06/30/2016 Cisco Systems, Inc. TX DIR Cisco 05/05/2014 05/05/2016
Cisco Systems, Inc. Cisco WSCA 08/07/2014 05/31/2019
Cisco Systems, Inc. Nevada Cisco WSCA 08/07/2014 06/01/2019 Cisco Systems, Inc. Oregon Cisco WSCA 08/15/2014 05/31/2019 Cisco Systems, Inc. Michigan Cisco WSCA 08/29/2014 05/31/2019 Cisco Systems, Inc. Washington Ciso WSCA 08/29/2014 05/31/2019 Cisco Systems, Inc. Hawaii Cisco WSCA 09/08/2014 05/31/2019 Cisco Systems, Inc. Wyoming Ciso WSCA 09/08/2014 05/31/2019 Cisco Systems, Inc. New Jersey Cisco WSCA 09/24/2014 05/31/2019 Cisco Systems, Inc. Louisiana Cisco WSCA 10/08/2014 06/01/2019 Cisco Systems, Inc. Flordia Cisco WSCA 10/09/2014 05/31/2019 Cisco Systems, Inc. Iowa Cisco WSCA 10/29/2014 05/31/2019 Cisco Systems, Inc. Utah Cisco WSCA 04/02/2015 05/31/2019 Cisco Systems, Inc. Montana Cisco NASPO ValuePoint Data Commun 07/24/2015 05/31/2019 DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6311913
Cisco Systems, Inc. 7-14-07-04 California Cisco WSCA 10/10/2014 05/31/2019 Citrus County School Board - Otterbox Cases Citrus County School Board 04/14/2015 04/14/2016 City of Atlanta City of Atlanta Hardware and Software 10/01/2013 10/01/2016 City of Austin Electronic Visual Display Systems 05/12/2015 05/11/2018 City of Austin Cisco Hardware and Support 08/05/2015 08/04/2018 City of Cambridge Misc Computer Hardware & Software for the Po 12/10/2014 12/09/2015 City of Chattanooga City of Chattanooga Brocade 10/01/2013 09/30/2016 City of Chesapeake Technology Solutions and Related Services 12/01/2014 11/18/2018 City of Denver City of Denver Ipads 06/20/2013 06/20/2016 City of Richmond Department of Procurement Services Richmond IT Products 05/14/2014 05/13/2016 City of Spokane City of Spokane Product Sales and Service Projec 09/23/2015 09/22/2017 City of Tucson, Arizona National IPA Technology Solutions 08/18/2013 08/16/2016 Clarkstown Central School District Samsung Chromebooks 09/08/2015 09/07/2016 Cobb County School District iPad Cases 05/01/2013 04/30/2016 Cobb County School District Audiovisual Equipment 06/01/2015 05/31/2016 Commonwealth of Massachusetts Operational Services Division Massachusetts Converged Voice & Data Commu 09/18/2013 08/31/2018 Commonwealth of Pennsylvania PA Commonwealth- Enterprise IT Peripherals 10/01/2013 09/30/2016 Commonwealth of Pennsylvania PA Commonwealth- PC and Monitors 02/15/2014 02/14/2016 Community Unified School District 300 Master Services Agreement 10/13/2014 10/12/2016 Community Unified School District 300 Computer & Tablets Purchase 04/13/2015 04/12/2016 Concorde Colleges Concorde Colleges Master Product Sales Agreem 03/22/2013 03/22/2016 Conejo Valley Unified School District Technology Solutions 08/06/2015 06/30/2016 Connecticut General Assembly, Joint Committe on Legislative Management IBM Express x3650 M4 Servers 04/24/2014 04/23/2019 Cook County Government Cook County Hardware Software Contract 05/15/2013 05/14/2016 County of Los Angeles Internal Services Department County of Los Angeles Wireless Accessories 11/01/2013 10/31/2016 County of Los Angeles Internal Services Department County of Los Angeles Media 04/01/2014 03/31/2017 County of Los Angeles Internal Services Department County of Los Angeles Orchid Peripherals 06/06/2014 06/05/2016 County of Los Angeles Internal Services Department County of Los Angeles Orchid Ergotron Periphera 09/10/2014 09/09/2016 Department of Information Technology and Telecommunications (DoITT) NYC DOITT Panasonic 04/10/2013 12/29/2015 Desert Sands Unified School District Chromebook Carts 11/06/2013 11/05/2016 Desert Sands Unified School District Chromebooks 09/02/2014 09/02/2016 Desert Sands Unified School District Tablets 03/18/2015 03/12/2016 Desert Sands USD Display Solutions Desert Sands USD Display Solutions 05/21/2015 05/16/2016 DeVry, Inc. Master Product Purchase Agreement 04/01/2013 04/01/2016 Digital Edge Digital Edge Wireless Mobile Devices 05/28/2014 12/31/2015 Digital Edge DigitalEdge Wireless Mobile Devices - Spectrum, 05/28/2014 01/01/2016 D-Link Systems, Inc. TX DIR D-Link Networking 06/01/2015 09/25/2016 Dutchess County BOCES Dutchess County BOCES Cooperative Lock and C 09/10/2015 09/10/2016 Eastern Suffolk BOCES Microcomputers, Perioherals & Software 01/15/2015 02/29/2016 EC America Ohio STS EC America Ohio State Term Schedule 08/31/2015 06/26/2017 EC America, Inc. PA Cisco immixGroup 11/27/2013 08/17/2018 Ector County Independent School District Electronic Surveillance System Upgrade 12/23/2014 12/22/2016 Education Service Center Region VII Computer Hardware & Supplies 08/20/2015 08/20/2016 El Paso Independent School District District Printers 07/01/2014 06/30/2016 Elk Area Schools ISD 78 Projector Bulb Contract 03/01/2014 06/30/2016 EMC Corporation EMC NVP Computer Equipment 08/24/2015 04/01/2017 EMC Corporation Alaska EMC NVP Computer Equipment 08/25/2015 03/31/2017 EMC Corporation Arizona EMC NVP Computer Equipment 08/26/2015 03/31/2017 EMC Corporation South Dakota EMC NVP Computer Equipment 08/26/2015 03/31/2017 EMC Corporation Alaska EMC NVP Data Communications 10/23/2015 05/31/2019 EMC Corporation California EMC NVP Data Communications 10/27/2015 05/31/2019 EMC Corporation Florida EMC NVP Data Communications 10/27/2015 05/31/2019 EMC Corporation Hawaii EMC NVP Data Communications 10/27/2015 03/31/2019 EMC Corporation Missouri EMC NVP Data Communications 10/27/2015 05/31/2019 EMC Corporation Montana EMC NVP Data Communications 10/27/2015 05/31/2019 EMC Corporation Utah EMC NVP Data Communications 10/27/2015 05/31/2019 EMC Corporation Kansas EMC NVP Computer Equipment 12/01/2015 03/31/2017 EMC Corporation New Jersey EMC NVP Computer Equipment 12/03/2015 03/31/2017 Epson America, Inc. TX DIR Epson Projectors 03/29/2013 12/07/2015 Extreme Networks, Inc. Extreme WSCA 06/17/2014 05/31/2019 Extreme Networks, Inc. Nevada Extreme WSCA 06/17/2014 05/31/2019 Extreme Networks, Inc. New Jersey Extreme WSCA 09/09/2014 05/31/2019 Extreme Networks, Inc. Florida Extreme NASPO Data Communications 05/11/2015 05/31/2019 Florida Department of Management Services Commercial Off-The-Shelf (COTS) Software 09/30/2014 09/09/2018 Florida Keys Community College NJPA Stretch Agreement 08/05/2015 11/18/2018 Florida State University NJPA Stretch Agreement 05/11/2015 11/18/2018 Florida Virtual Schools Computer Peripherals, Supplies and Accessories 06/18/2013 06/25/2016 Furman University Furman Univeristy 11/23/2015 08/16/2016 Garden Grove Unified School District Audio Visual / Technology Bid 11/05/2014 11/17/2016 Georgia State University National IPA Piggyback 11/16/2015 08/15/2016 DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6321914
Grand Prairie Independent School District Technology Equipment, Supplies, Services, Etc. 09/06/2014 08/31/2016 Grantham University Grantham University Master Product Sales Agree 05/22/2014 05/21/2017 Harris County Department of Education Harris County Department of Education 04/01/2014 01/22/2016 HealthEast Care System Business Associate Agreement 05/01/2013 08/18/2018 HealthEast Care System Master Services Agreement 09/25/2013 05/10/2016 Hewlett Packard Company HP Los Angeles Community College Data Storage 11/10/2014 02/08/2017 Hewlett Packard Company Los Angeles Community College District Server M 11/10/2014 02/08/2017 Hewlett Packard Company Alaska HP NVP Computer Equipment 08/12/2015 03/31/2017 Hewlett Packard Company HP NVP Computer Equipment 08/12/2015 03/31/2017 Hewlett Packard Company Arizona HP NVP Computer Equipment 08/13/2015 03/31/2017 Hewlett Packard Company Delaware HP NVP Computer Equipment 08/14/2015 03/31/2017 Hewlett Packard Company Kansas HP NVP Computer Equipment 08/14/2015 03/31/2017 Hewlett Packard Company Nevada HP NVP Computer Equipment 09/03/2015 03/31/2017 Hewlett Packard Company Florida HP NVP Computer Equipment 09/04/2015 03/31/2017 Hewlett Packard Company North Dakota HP NVP Computer Equipment 09/09/2015 03/31/2017 Hewlett Packard Company Utah HP NVP Computer Equipment 09/09/2015 03/31/2017 Hewlett Packard Company Wyoming HP NVP Computer Equipment 09/09/2015 03/31/2017 Hewlett Packard Company Arkansas HP NVP Computer Equipment 10/01/2015 03/31/2017 Hewlett Packard Company Washington HP NVP Computer Equipment 10/01/2015 03/31/2017 Hewlett Packard Company Wisconsin HP NVP Computer Equipment 10/01/2015 03/31/2017 Hewlett Packard Company California HP NVP Computer Equipment 10/08/2015 03/31/2017 Hewlett Packard Company Colorado HP NVP Computer Equipment 10/08/2015 03/31/2017 Hewlett Packard Company South Carolina HP NVP Computer Equipment 10/08/2015 03/31/2017 Hewlett Packard Company Oregon State University 11/25/2015 09/30/2016 Hewlett Packard Company Louisiana HP Inc NVP Computer Equipment 12/11/2015 03/31/2017 Hewlett-Packard Company Ohio STS HP2 03/11/2013 07/02/2018 Hewlett-Packard Company State of Georgia HP Server and Storage 06/12/2014 08/31/2016 Hewlett-Packard Company North Carolina HP Microcomputers 06/18/2014 01/31/2016 Hewlett-Packard Company TX DIR HP 07/03/2014 07/03/2016 Hewlett-Packard Company State of Georgia HP PC Hardware 08/04/2014 08/31/2016 Hewlett-Packard Company HP WSCA Data Communications 09/16/2014 05/31/2019 Hewlett-Packard Company California HP WSCA Data Communications 09/16/2014 05/31/2019 Hewlett-Packard Company Alaska HP WSCA Data Communications 09/18/2014 05/31/2019 Hewlett-Packard Company Hawaii HP WSCA Data Communications 09/18/2014 05/31/2019 Hewlett-Packard Company Nevada HP WSCA Data Communications 09/19/2014 05/31/2019 Hewlett-Packard Company Utah HP WSCA Data Communications 09/19/2014 05/31/2019 Hewlett-Packard Company Washington HP WSCA Data Communications 09/19/2014 05/31/2019 Hewlett-Packard Company NY OGS HP Printing and Imaging 10/03/2014 08/31/2017 Hewlett-Packard Company Kentucky HP WSCA Data Communications 10/13/2014 05/31/2019 Hewlett-Packard Company Ohio STS HP 10/15/2014 07/02/2018 Hewlett-Packard Company Louisiana HP WSCA Data Communications 10/17/2014 05/31/2019 Hewlett-Packard Company Wyoming HP NASPO Data Communications 05/07/2015 05/31/2019 Howard County Public Schools Career and Technology Education Supplies and E 01/15/2015 01/14/2016 Howard University-MedAssets Stretch Agreement MedAssets Stretch Agreement between CDW Go 07/01/2013 07/22/2016 Humanscale Corporation Humanscale IT Support Equipment 02/23/2015 09/15/2016 Illinois Department of Central Mangement Services Illinois Sniffer 07/11/2013 07/12/2017 Illinois Learning Technology Purchasing Program Illinois Learning Technology Purchasing Program 10/20/2015 10/21/2018 Illinois Public Higher Education Cooperative IPHEC Networking and Equipment Services 12/06/2013 06/30/2017 Irvine Unified School District Master Services And Product Sales Agreement 07/22/2013 07/21/2016 Jefferson County Public School District Mobile Device Management System 05/12/2014 05/31/2016 Juniper Networks (US), Inc. Louisiana Juniper NASPO Data Communications 04/30/2015 05/31/2019 Juniper Networks (US), Inc. Juniper VALP Data Communications 04/30/2015 05/31/2019 Juniper Networks, Inc. TX DIR Juniper 08/22/2014 08/21/2016 Kansas Department of Administration Kansas Sophos Contract 07/01/2013 06/30/2016 Kentucky Department of Education Instructional Devices 07/01/2015 06/30/2016 Kodak Alaris Inc. NY OGS Kodak PT66606 01/23/2015 08/31/2017 Kodak Alaris Inc. NY OGS Kodak Printers PT66606 01/23/2015 08/31/2017 Laramie County School District No. 1 Windows Mobile 8 Devices Tablets 07/01/2013 06/30/2016 Laredo Independent School District Computer Supplies & Peripherals 04/17/2014 04/16/2016 Laureate Education, Inc. Confidentiality and Non-Disclosure Agreement 04/15/2014 04/15/2018 Laureate Education, Inc. Laureate Education Master Services Sales Agreem 11/11/2014 11/10/2016 Legacy Health Master Service Agreement 01/18/2013 01/23/2016 Lenovo (United States) Inc. Arizona Lenovo NVP Computer Equipment 08/25/2015 03/31/2017 Lenovo (United States) Inc. Lenovo NVP Computer Equipment 08/25/2015 03/31/2017 Lenovo (United States) Inc. Alaska Lenovo NVP Computer Equipment 09/16/2015 03/31/2017 Lenovo (United States) Inc. Arkansas Lenovo NVP Computer Equipment 10/07/2015 03/31/2017 Lenovo (United States) Inc. Florida Lenovo NVP Computer Equipment 10/07/2015 03/31/2017 Lenovo (United States) Inc. Nevada Lenovo NVP Computer Equipment 10/07/2015 03/31/2017 Lenovo (United States) Inc. Kansas Lenovo NVP Computer Equipment 10/16/2015 03/31/2017 Lenovo (United States) Inc. Washington Lenovo NVP Computer Equipment 10/21/2015 03/31/2017 DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6331915
Lenovo (United States) Inc. Louisiana Lenovo NVP Computer Equipment 11/17/2015 03/31/2017 Lenovo (United States) Inc. Hawaii Lenovo NVP Computer Equipment 11/19/2015 03/31/2017 Lenovo (United States) Inc. Maine Lenovo NVP Computer Equipment 11/19/2015 03/31/2017 Lenovo (United States) Inc. New Jersey Lenovo NVP Computer Equipment 11/19/2015 03/31/2017 Lexmark International, Inc. Lexmark Printers 02/27/2013 02/26/2016 Lexmark International, Inc. NY OGS Lexmark 04/01/2013 02/26/2016 Lexmark International, Inc. NY OGS Lexmark Printing and Imaging 11/20/2014 08/31/2017 Lifespan Corporation Business Associate Agreement 09/23/2013 08/18/2018 Lincoln Public Schools Vendor Discount Request 01/01/2015 12/31/2015 Los Angeles Unified School District Keyboards for Tablet Devices 12/23/2014 12/22/2017 Lubbuck Independent School District Catalog Bid 11/25/2014 12/31/2016 Magnolia Independent School District Technology Equipment & Peripherals 02/19/2015 02/19/2016 Massachusetts Higher Education Consortium MHEC Consortium Contract- Multi-media equpm 12/01/2014 09/30/2017 McKinney Independent School District Technology Products & Services 03/26/2014 03/25/2016 Meridian Health System, Inc. Business Associate Agreement 08/23/2013 08/18/2018 Mesa Unified School District No. 4 Computer Parts & Peripherals 03/24/2015 02/24/2016 Metropolitan Transportation Authority MTA Peripherals 03/14/2014 08/01/2016 Middlesex Regional Educational Services Commission Technology Supplies & Services 07/01/2015 06/30/2016 Milwaukee Public Schools Various Electronic Supplies, Blanket Contract 02/01/2013 01/31/2016 Milwaukee Public Schools Chromebook Agreement 05/30/2014 05/29/2016 Milwaukee Public Schools Charging Carts for Chromebooks 08/22/2014 08/21/2016 Minnesota Department of Administration Minnesota Professional and Technical Services S 07/03/2014 04/15/2019 Mississippi Department of Information Technology Services Mississippi IT Hardware EPL 3760 03/11/2015 06/30/2017 Momentum Ventures, LLC Group Purchasing Agreement 05/15/2013 05/14/2016 Montgomery County Department of Technology Services Montgomery County MD IT Commodities 09/16/2014 02/02/2016 National Cooperative Purchasing Alliance Red Hat Software 09/02/2015 12/31/2015 National Joint Powers Alliance Technology Solutions with Related Equipment an 12/01/2014 11/30/2018 NetApp, Inc. Oklahoma State Regents NetApp 03/01/2014 02/28/2016 NetApp, Inc. TX DIR NetApp 08/19/2014 08/19/2016
NetApp, Inc. Alaska NetApp NVP Computer Equipment 10/13/2015 03/31/2017 NetApp, Inc. Arkansas NetApp NVP Computer Equipment 10/15/2015 03/31/2017 New Mexico Cooperative Educational Services Windows Desktop, Accessories and Software for 05/19/2014 05/18/2016 New York City Department of Education AV and Interactive Whiteboard Agreement 01/31/2014 01/31/2019 Noble County Clerk Noble County Office Supplies 07/01/2015 12/31/2015 Northwestern University Northwestern University Lenovo Desktop Compu 09/01/2014 08/31/2019 Northwestern University Northwestern Computer Peripherals and Supplie 10/31/2014 10/31/2019 Ohio Council of Educational Purchasing Consortia Technology Catalog 03/01/2014 02/28/2016 Ohio Inter University Council Purchasing Group Ohio Inter University Purchasing Group Price Ag 10/01/2014 09/30/2017 Ohio State University Medical Center Ohio State Unvi Med Ctr Material Systems and P 10/18/2013 08/31/2018 Oki Data America's Inc. TX DIR Okidata 06/05/2015 06/05/2016 Oki Data Americas, Inc. NY OGS Oki Data 02/27/2013 02/26/2016 Oki Data Americas, Inc. NY OGS Oki Data Printers and Imaging Equipmen 09/01/2014 08/31/2017 Onondaga-Cortland-Madison Board of Cooperative Educational Services COMPUTER PERIPHERALS 01/01/2014 12/31/2015 Orange County Public Schools Computer Peripheral Equipment 01/17/2013 12/31/2015 Orange County Public Schools Single Sign On Software 06/25/2014 06/24/2017 Oregon Department of Administrative Services-Enterprise Technolog ServiceEnterprise Technology Hardware, Software, and 05/14/2015 05/13/2017 Oregon State University Contract for the Purchase of Computer Hardwar 11/12/2013 11/11/2017 Palo Alto Networks, Inc California Palo Alto NVP Data Communications 04/16/2015 05/31/2019 Palo Alto Networks, Inc Palo Alto NVP Data Communications 04/16/2015 05/31/2019 Palo Alto Networks, Inc Nevada Palo Alto NVP Data Communications 06/08/2015 05/31/2019 Palo Alto Networks, Inc Washington Palo Alto NVP Data Communication 08/19/2015 05/31/2019 Palo Alto Networks, Inc Alaska Palo Alto NVP Data Communications 08/27/2015 05/31/2019 Palo Alto Networks, Inc Colorado Palo Alto NVP Data Communications 08/27/2015 05/31/2019 Palo Alto Networks, Inc Louisiana Palo Alto NVP Data Communications 08/27/2015 05/31/2019 Palo Alto Networks, Inc Utah Palo Alto VALP Data Communications 08/27/2015 05/31/2019 Palo Alto Networks, Inc Florida Palo Alto NVP Data Communications 12/08/2015 05/31/2019 Panasonic Computer Solutions Company TX DIR Panasonic 12/20/2013 12/20/2015 Pemayetv Emahakv Charter School Printer Supplies Management Program 04/16/2015 04/15/2018 Pennsylvania Department of General Services PA Commonwealth- Server Equipment 06/01/2014 05/31/2016 PEPPM General Hardware and Software 01/01/2014 12/31/2016 PEPPM PEPPM 2014 Steelcase Product Line BId 05/28/2014 12/31/2017 PEPPM PEPPM 2015 Ruckus Product Line Bid 01/01/2015 12/31/2017 PEPPM PEPPM Panasonic Product Line Bid 2015 03/09/2015 12/31/2017 PEPPM PEPPM Product Line Bid 03/26/2015 01/01/2018
PEPPM PEPPM 2015 Synnex Product Line Bid 10/12/2015 12/31/2017 Pharr-San Juan-Alamo Independent School District Audio Visual Aids, Videos, Equipment, Services a 09/01/2015 08/31/2016 Pharr-San Juan-Alamo Independent School District Toner & Ink Cartridges for Printers, Equipment, S 09/01/2015 08/31/2016 Pharr-San Juan-Alamo Independent School District Computer and Printer, Equipment, Services and 09/01/2015 08/31/2016 Pima County Community College District National IPA Piggyback Agreement 09/25/2015 08/14/2016 Polycom, Inc. State of Georgia Polycom 07/25/2013 06/30/2016 DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6341916
Prince George County Public Schools MDM Licenses 10/01/2014 09/30/2017 Promark Technology Ohio STS Promark 07/16/2014 09/04/2016 Promethean, Inc. NY OGS Promethean Materials and Equipment 02/13/2013 08/02/2017 Rasmussen, Inc. Rasmussen, Inc. Master Services and Product Sa 08/26/2014 08/25/2016 Region 18 Education Service Center Catalog Bid 06/23/2015 06/22/2016 Region 8 Education Service Center Printer Supplies Management Agreement 04/16/2015 04/15/2018 Regional Educational Media Center Association of Michigan Computer & Networking 2014 07/01/2014 06/30/2019 Regional Educational Media Center Association of Michigan Computer & Networking 07/01/2014 06/30/2019 Regional Educational Media Center Association of Michigan Supplies & Equipment 2015 01/01/2015 12/31/2015 Regional Educational Media Center Association of Michigan Software, Digital Content & Automated Notificat 07/01/2015 06/30/2018 Regional Educational Media Center Association of Michigan Computer Equipment 08/11/2015 03/31/2017 Ricoh U.S.A. Inc. NY OGS Ricoh Printing and Imaging 11/06/2014 09/01/2017 Rocky Point Union Free School District Lexmark OEM Toner Catridges & Supplies Bid 07/01/2013 06/30/2016 Samsung Electronics America, Inc. North Carolina 204D Samsung 04/01/2013 03/31/2016 Samsung Electronics America, Inc. NY OGS Samsung Printing 01/12/2015 08/31/2017 School Board of Hernando County Interactive Solutions 05/07/2014 05/06/2016 School Board of Sarasota County Audio Visual and Video Equipment 01/20/2015 01/19/2017 ShoreTel Inc. Hawaii ShoreTel NVP Data Communications 02/17/2015 05/31/2019 ShoreTel Inc. Nevada ShoreTel NVP Data Communications 02/17/2015 05/31/2019 ShoreTel Inc. ShoreTel WSCA 02/17/2015 05/31/2019
ShoreTel Inc. Utah ShoreTel NVP Data Communications 02/17/2015 05/31/2019 ShoreTel Inc. ShoreTel NVP Data Communications 02/17/2015 05/31/2019 ShoreTel Inc. California ShoreTel NVP Data Communications 08/19/2015 05/31/2019 ShoreTel Inc. Arkansas ShoreTel NVP Data Communications 08/28/2015 06/01/2019 ShoreTel Inc. Florida ShoreTel NVP Data Communications 08/28/2015 05/31/2019 ShoreTel Inc. Missouri ShoreTel NVP Data Communications 08/28/2015 05/31/2019 ShoreTel Inc. Washington ShoreTel NVP Data Communication 09/18/2015 05/31/2019 Snohomish County Public Utility District Snohomish County PUD Fireye 10/21/2014 10/21/2019 Socorro Independent School District District Interactive Projectors 11/20/2014 11/19/2016 South Carolina Information Technology Management Office South Carolina Symantec 02/20/2013 02/19/2018 South Carolina Information Technology Management Office South Carolina Aerohive 05/29/2015 05/28/2018 Southeast Kansas Educational Services Cooperative Southeast Kansas Educational Services Cooperat 03/01/2014 02/29/2016 Spectrum Industries, Inc. State of Connecticut Classroom Furniture 07/23/2014 03/31/2017 St. Mary's County Public Schools Promethean Interactive Whiteboards & Related 04/01/2013 03/31/2016 Stanford University Stanford University MPSA 10/27/2015 10/27/2018 State of California, Department of General Services SLP Academic Microsoft 06/27/2013 06/30/2016 State of California, Department of General Services CMAS Cisco 08/07/2013 09/30/2017 State of California, Department of General Services SLP Microsoft 11/15/2013 02/01/2017 State of California, Department of General Services SLP Adobe 01/24/2014 12/31/2015 State of California, Department of General Services SLP Novell 06/09/2014 06/30/2016 State of California, Department of General Services SLP VMware 07/21/2014 07/31/2017 State of California, Department of General Services Cisco PC Servers 06/30/2015 06/29/2017 State of California, Department of General Services SLP Commvault 08/03/2015 07/31/2017 State of California, Department of General Services SLP Symantec 09/19/2014 08/31/2016 State of Connecticut, Dept of Administrative Services Information Processing Systems Agreement 01/17/2014 01/17/2018 State of Connecticut, Dept of Information Technology Audio Visual 05/01/2014 03/31/2019 State of Oregon IT Hardware Value Added Reseller 09/25/2015 09/30/2017 State of Tennessee, Department of General Services Tennessee Cisco Hardware, Software, and Servic 01/01/2013 12/31/2015 State of Tennessee, Department of General Services Tennessee Ultrabooks and Related Peripherals 07/11/2014 07/10/2016 State of Tennessee, Department of General Services Tennessee Multi Manufacturer Software 04/01/2015 03/31/2016 State of Texas, Department of Information Resources TX DIR Networking 09/20/2014 09/19/2016 State of Texas, Department of Information Resources TX DIR Education IT Products 06/18/2015 06/18/2016 Tegile Systems, Inc. Florida Tegile NASPO ValuePoint Computer Equi 07/22/2015 03/31/2017 Tegile Systems, Inc. Tegile NASPO ValuePoint Computer Equipment 07/22/2015 03/31/2017 Texas A&M University TCPN Stretch Agreement 07/01/2013 10/31/2016 Texas Christian University Texas Christian Managed Print Services Contract 08/19/2013 08/19/2016 The Catholic University of America The Catholic University of America-MPA 10/26/2015 05/31/2017 The Interlocal Purchasing System TIPS/TAPS Computers, Equipment, Components 06/26/2015 06/29/2018 The Interlocal Purchasing System TIPS-TAPS Software 07/16/2015 07/27/2018 Tri-Consortia Technology Committee Category 2-Products and Services 02/13/2015 06/30/2018 Tuskegee University Tuskegee University 05/14/2013 05/14/2016 University Hospitals Health System, Inc Letter of Understanding for VDI project 12/02/2013 12/01/2016 University of Alabama University of Alabama Computer Peripherals 03/01/2014 12/31/2015 University of Alabama at Birmingham Business Associates Agreement 08/13/2013 08/12/2018 University of Florida NJPA Stretch Agreement 02/26/2015 11/18/2018 University of Idaho NJPA Stretch Agreement 07/31/2015 11/18/2018 University of Iowa University of Iowa Border Routers 08/29/2014 08/28/2016 University of Kentucky University of Kentucky Software, Peripherals & A 01/07/2013 01/06/2016 University of Massachusetts NJPA Stretch Agreement 05/01/2015 11/18/2018 University of Minnesota University of Minnesota Juniper and Powerdsine 07/01/2013 06/30/2016 DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6351917
University of Montana NJPA Stretch Agreement 12/01/2014 11/18/2018 University of Virginia NJPA Stretch Agreement 12/01/2014 11/18/2018 University of Wisconsin Foundation Master Services Sales Agreement 09/11/2015 09/10/2017 US Educational Technology Purchasing Alliance End User Devices 01/01/2015 12/31/2019 US Educational Technology Purchasing Alliance LAN/WAN Security (E-Rate) 01/01/2015 12/31/2019 Vanguard University Vanguard University MPSA 12/12/2013 12/13/2015 Victoria Independent School District Audio Visual Equipment & Supplies 01/01/2014 12/31/2015 Victoria Independent School District Technology RFP 03/01/2014 02/28/2016 Village of Lombard MPS-Village of Lombard 10/30/2013 10/30/2016 Village of Lombard Village of Lombard PSMP 10/30/2013 10/29/2016 Virginia Information Technologies Agency VITA Governance, Risk and Compliance Software 02/04/2013 02/04/2017 Virginia Information Technologies Agency VITA Hardware and Maintenance 03/31/2014 03/31/2016 Virginia Information Technologies Agency VITS Software License Contract 04/01/2014 03/31/2016 Wayne-Finger Lakes BOCES Chrome Books & Accessories 06/01/2013 01/31/2016 Western Suffolk BOCES Western Suffolk BOCES Smartboard & Audio Vis 02/24/2015 12/31/2015 DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6361918
LOST OR RESIGNED GOVERNMENT CONTRACTS
Issuing Agency Contract Title Start Date Exp Date Reason Montgomery County Public Schools Computer Supplies 01/13/2010 01/12/2013 Unknown reason Arlington Independent School District Computer, AV Equipment, Supplies and Services 11/01/2012 01/15/2013 Agreement rebid and awarded to CDW•G Milwaukee Public Schools Tech Catalog Contract 11/20/2009 01/31/2013 Agreement rebid and awarded to CDW•G Albuquerque Public Schools Audio Visual 03/02/2009 02/28/2013 Moved purchasing to local cooperative agreements New Mexico Cooperative Educational Services Technology Contract 03/01/2010 02/28/2013 Agreement rebid and awarded to CDW•G King County Director's Association Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Clark County School District Classroom Visual Presentation Equipment and Accessories 03/23/2011 03/22/2013 Unknown reason Irvine Unified School District Irvine Unified School District Product Purchase Agreement 56943 04/15/2008 04/16/2013 Signed a new agreement New Caney Independent School District Special Education Supplies 05/17/2011 05/16/2013 Unknown reason San Francisco Unified School District Interactive Whiteboard Classroom Solution 06/09/2010 06/07/2013 Unknown reason Region 18 Education Service Center Computer Hardware, Software, Supplies and Accessories 06/23/2012 06/22/2013 Unknown reason Socorro Independent School District District Software 06/24/2011 06/25/2013 Agreement rebid and awarded to CDW•G Tuscon Unified School District Computer, Technology, Electrical Parts and Supplies 09/18/2008 06/30/2013 Unknown reason Corona-Norco Unified School District Audio Visual Equipment 07/01/2011 06/30/2013 Unknown reason Garden Grove Unified School District Audio Visual Equipment 09/19/2012 06/30/2013 Unknown reason Orange County Public Schools Projectors 07/01/2011 06/30/2013 Unknown reason Jackson-Madison County School System Slate-Tablet Computers 03/15/2013 06/30/2013 Agreement rebid and awarded to CDW•G Copper Country Intermediate School District 22i SPOT Device 05/23/2013 08/30/2013 Agreement rebid and awarded to CDW•G NORTH ALABAMA COOPERATIVE PURCHASING ASSOCIATION MANUFACTURER SUPPLIED TECHNOLOGY EQUIPMENT WITH PERIPH 09/01/2010 08/31/2013 Agreement rebid and awarded to CDW•G Academy School District 20 Peripherals 09/01/2012 08/31/2013 Agreement rebid and awarded to CDW•G Eagle Pass Independent School District Computer Hardware & Equipment 10/01/2011 08/31/2013 Unknown reason Harlingen Consolidated Independent School District Audio Visual 09/11/2012 08/31/2013 Unknown reason Lone Star College System Technology Solutions 11/20/2012 10/13/2013 Agreement not renewed due to lack of sales School District of Palm Beach County Computer Software, Peripherals, Accessories & Repair Parts 11/20/2009 11/19/2013 Unknown reason Smoky Hill Education Service Center NJPA Stretch Agreement 12/17/2012 11/22/2013 Signed new NJPA Stretch Agreement Associated Colleges of the Twin Cities Technology Catalog 08/08/2012 11/22/2013 Signed new Stretch Agreement under new NJPA Agreement City of Chesapeake Technology Solutions and Related Services 10/11/2012 11/23/2013 Signed new Stretch Agreement under new NJPA Agreement Socorro Independent School District Audio Visual Equipment 12/18/2011 12/17/2013 Agreement rebid and awarded to CDW•G Lake County School Board Catalog Bid for Incidental Supplies 09/25/2006 12/31/2013 Unknown reason Regional Educational Media Center Association of Michigan uipment & Supplies 2013 01/01/2013 12/31/2013 Agreement rebid and awarded to CDW•G School District of Kansas City Missouri Computer Technology and Peripherals 01/01/2013 12/31/2013 Unknown reason Cypress-Fairbanks Independent School District Repair Parts for AV, Computer, Printer & Miscellaneous Office Equip 01/01/2012 12/31/2013 Unknown reason Northside Independent School District Audio, Visual & DVD Software 02/01/2012 01/31/2014 Unknown reason University of Alabama Lenovo Product 03/01/2013 02/28/2014 Agreement rebid and awarded to CDW•G Colorado BOCES Association Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Panhandle Area Education Consortium Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Iowa Educators Consortium Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Indiana Association Educational Service Centers Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Indiana Association Educational Service Centers - GovPro Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Oakland Schools Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Minnesota Service Cooperatives Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Cooperating School Districts of Greater St Louis Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Montana Cooperative Services, LLC Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G North Dakota Educators Service Cooperative Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G InterMountain ESD Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Portland Public Schools Technology Catalog 01/03/2006 02/28/2014 Agreement rebid and awarded to CDW•G Keystone Purchasing Network Technology Catalog 07/01/2013 02/28/2014 Agreement rebid and awarded to CDW•G TexBuy (Region 16 Education Service Center) Technology Catalog 09/27/2010 02/28/2014 Agreement rebid and awarded to CDW•G Fairfax County Public Schools Technology Catalog 03/01/2010 02/28/2014 Agreement rebid and awarded to CDW•G Richmond Public Schools Audio Visual Equipment & Misc Items 03/01/2011 02/28/2014 Unknown reason Regional Education Service Agencies 5 Technology Catalog 05/09/2012 02/28/2014 Agreement rebid and awarded to CDW•G Atlanta Independent School System Instructional Interactive Devices Accessories for Promethean 04/08/2013 03/27/2014 Agreement rebid and awarded to CDW•G Socorro Independent School District District Technology 03/27/2013 03/27/2014 Agreement rebid and awarded to CDW•G City of Mesquite Annual Supply of Miscellaneous PC Components 04/05/2012 04/04/2014 Unknown reason North County Educational Purchasing Corsoritum Audio Visual 04/15/2011 04/15/2014 Agreement rebid and not awarded to CDW•G DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6371919
National Joint Powers Alliance Emergency Response Agreement 04/15/2009 04/15/2014 Agreement rebid and awarded to CDW•G San Bernardino City Unified School District Audio Visual Equipment & Supplies 05/06/2013 05/05/2014 Unknown reason Community Unified School District 300 Replacement Computers 05/13/2013 05/13/2014 Agreement rebid and awarded to CDW•G Douglas County Schools (Omaha Public Schools) Promethean Interactive Whiteboards 05/21/2013 05/20/2014 Unknown reason San Diego County Office of Education Chromebook 08/27/2013 06/30/2014 Unknown reason Hillsborough County Public Schools Audio Visual Equipment, Related Parts and Periodic Services 01/25/2012 06/30/2014 Unknown reason Lenovo (United States) Inc. KETS Instructional Devices Workstations 12/04/2012 06/30/2014 Agreement rebid and awarded to CDW•G Montgomery County Public Schools Chrome-Android-Windows Mobile Devices 07/15/2014 06/30/2014 Unknown reason Jackson-Madison County School System Computer Requirements 08/20/2013 06/30/2014 Agreement rebid and not awarded to CDW•G Arlington Independent School District Computer / Audio Visual Equipment, Supplies and/or Services 08/16/2013 06/30/2014 Agreement rebid and awarded to CDW•G Jefferson County School District No. R-1 AV Equipment & Supplies 08/01/2013 07/31/2014 Agreement rebid and awarded to CDW•G School District of Desoto County Catalog Discount Term Contract 11/13/2012 07/31/2014 Unknown reason Copper Country Intermediate School District 22i SPOT Device 04/23/2014 07/31/2014 Agreement rebid and awarded to CDW•G Desert Sands Unified School District Chromebooks 08/21/2013 08/20/2014 Agreement rebid and awarded to CDW•G Education Service Center Region VII Computer Hardware & Supplies Bid Award 08/22/2013 08/22/2014 Agreement rebid and awarded to CDW•G Amarillo Independent School District Audio Visual 09/01/2013 08/31/2014 Moved purchasing to local cooperative agreements Socorro Independent School District District Interactive Projectors 09/20/2013 09/19/2014 Agreement rebid and awarded to CDW•G Aldine Independent School District Instructional Supplies & Equipment 09/21/2011 09/20/2014 Signed VPA Agreement with CDW•G Mesa Unified School District No. 4 Student Devices 09/24/3013 09/23/2014 Agreement rebid and awarded to CDW•G School Board of Polk County Kindle Fire 04/25/2012 11/27/2014 Unknown reason Hillsborough County Public Schools Classroom Supplies & Equipment Catalog 12/09/2009 12/08/2014 Unknown reason National Joint Powers Alliance Technology Catalog 12/09/2009 12/15/2014 Agreement rebid and awarded to CDW•G Montana State University NJPAStretch Agreement 11/06/2013 12/15/2014 Signed a new NJPA Stretch Agreement Board of Regents of the Nevada System of Higher Education on beh NJPA Stretch Agreement 05/01/2014 12/15/2014 Signed new Stretch Agreement under new NJPA Agreement College of Southern Nevada NJPA Stretch Agreement 06/05/2014 12/15/2014 Signed new Stretch Agreement under new NJPA Agreement Massapequa Union Free School District NJPA Stretch Agreement 09/01/2013 12/15/2014 Signed new Stretch Agreement under new NJPA Agreement West Hempsted Unified Free School District NJPA Stretch Agreement 09/16/2014 12/15/2014 Agreement not renewed Ohio Inter-University Council Purchasing Group Technology Solutions with Related Equipment and Accesories 03/14/2011 12/15/2014 Signed new NJPA Stretch Agreement Fayette County Board of Education LocknCharge Carrier Charging Carts 10/01/2014 12/31/2014 Unknown reason The School Board of Sarasota County Audio Visual & Video Equipment 01/22/2013 01/21/2015 Unknown reason Unified School District 229 Master Services Sales Agreement 01/27/2014 01/26/2015 Unknown reason Adams County School District 14 Microsoft Office 365 08/18/2014 01/30/2015 Unknown reason Fountain Fort Carson School District 8 Laptop & Ultrabook Contract 03/03/2014 03/02/2015 Unknown reason Victoria Independent School District Educational Computer Software 06/01/2013 05/31/2015 Unknown reason Montgomery County Public Schools Televisions for Schools and Offices 06/15/2013 06/14/2015 Unknown reason Region 18 Education Service Center Catalog Bid 06/23/2014 06/22/2015 Agreement rebid and awarded to CDW•G Alum Rock Union Elementary School District Visual and Audio Installation 04/25/2013 06/30/2015 Agreement not rebid Alum Rock Union Elementary School District Installation of Interactive Classroom Promethean Boards 05/07/2013 06/30/2015 Agreement not rebid Pinellas County School Board Audio Visual & Video Equipment/Materials 01/26/2014 06/30/2015 Unknown reason Des Moines Independent Community School District Technology - Electronic Products 07/01/2012 06/30/2015 Unknown reason Rockford Public Schools Lenovo ThinkPads 07/01/2012 06/30/2015 Unknown reason Regional Educational Media Center Association of Michigan Software 2012 07/01/2012 06/30/2015 Agreement rebid and awarded to CDW•G Middlesex Regional Educational Services Commission Technology Catalog 07/01/2013 06/30/2015 Agreement rebid and awarded to CDW•G Metropolitan Nashville Public Schools Nutrition Services Computers/Supplies 06/01/2014 06/30/2015 Unknown reason Birdville Independent School District Birdville ISD 07/01/2014 06/30/2015 Moved purchasing to local cooperative agreements Pearland Independent School District Careet and Technical Education Catalog 07/01/2014 06/30/2015 Unknown reason Arlington Independent School District Computer, AV Equipment, Supplies and Services 07/01/2014 06/30/2015 Agreement rebid and awarded to CDW•G Donna Independent School District Computer Peripherals & IPads 2014-2015 11/19/2014 06/30/2015 Unknown reason Jefferson County Public Schools R-1 Projection, A/V and Charging Carts 09/30/2015 07/31/2015 Unknown reason Pharr-San Juan-Alamo Independent School District Computer Equipment, Servers, Microsoft Licensing, Services and Fina 08/23/2013 08/22/2015 Unknown reason Education Service Center Region VII Computer Hardware & Supplies 08/21/2014 08/22/2015 Agreement rebid and awarded to CDW•G Academy School District 20 District-wide Peripheral Purchase 08/19/2014 08/31/2015 Agreement rebid and awarded to CDW•G Edinburg Consolidated Independent School District Audio Visual Supplies & Equipment 09/01/2013 08/31/2015 Moved purchasing to local cooperative agreements Pharr-San Juan-Alamo Independent School District Toner and Ink Cartridges for Printers, Equipment, Services and Suppl 09/01/2014 08/31/2015 Unknown reason Pharr-San Juan-Alamo Independent School District Computer and Printer Equipment, Services and Supplies Catalog 09/01/2014 08/31/2015 Unknown reason Portland Water District Information Technology Supplies 09/12/2014 09/11/2015 Unknown reason Aldine Independent School District VPA for Technology Devices 09/17/2014 09/16/2015 Moved purchasing to local cooperative agreements DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6381920
School Board of Volusia County IT Hardware and Software - Percent Discount 10/28/2013 09/30/2015 Using other school agreement in Florida El Paso Independent School District iPads, Computer, Telephone & AV Repairs 10/11/2012 10/10/2015 Unknown reason Judson Independent School District Computer and Networking Equipment 10/23/2014 10/22/2015 Unknown reason Clear Creek Independent School District Audio Visual Equipment, Supplies & Discounts 12/01/2011 11/30/2015 Unknown reason Henrico County Public Schools Promethean Interactive White Boards 12/01/2010 11/30/2015 Unknown reason CalSAVE Technology Catalog 04/01/2011 12/31/2015 Agreement out to RFP Education Service Center Region 19 Special Education & Assistive Technology Equipment, Supplies, and C 12/09/2012 12/31/2015 Not renewed for lack of sales Victoria Independent School District Audio Visual Equipment & Supplies 01/01/2014 12/31/2015 Unknown reason National Cooperative Purchasing Alliance Red Hat Software 09/02/2015 12/31/2015 Agreement not renewed Epson America, Inc. Epson Brighter Futures Printers 03/20/2005 03/31/2013 Unknown reason Catholic Purchasing Services Master Service and Product Sales Agreement 06/23/2009 06/22/2013 Not renewed for lack of sales California Charter Schools Association Product Purchase Agreement 06/25/2009 06/25/2013 Moved purchasing to local cooperative agreements Long Beach Unified School District Audio Visual Equipment 09/30/2010 06/30/2013 Unknown reason Education Service Center Region VI Technology Supplies 07/01/2012 06/30/2013 Unknown reason South County Support Service Agency MSPSA 07/07/2009 07/06/2013 Not renewed for lack of sales Chicago Public Schools Software Resale and Support Services 08/01/2010 07/31/2013 Signed new agreement with CDW•G using City of Chicago contract Alabama Joint Purchasing Program ALJP 2012 - Amazon Kindle & ServiceNet Warranty 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Asus 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Brocade 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - McAfee 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Ruckus 08/15/2012 08/14/2013 Line item rebid and not awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Spectrum 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Trend Micro 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Xerox 08/15/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Belkin 09/10/2012 08/14/2013 Line item rebid and awarded to CDW•G Alabama Joint Purchasing Program ALJP 2012 - Tripp Lite 11/02/2012 08/14/2013 Line item rebid and awarded to CDW•G Education Service Center Region VII Computer Hardware & Supplies 08/16/2012 08/18/2013 Agreement rebid and awarded to CDW•G Rockwood School District Rockwood School District Product Purchase Agreement 92547 10/01/2008 10/01/2013 Unknown reason Harris County Department of Education Technology Catalog 12/14/2004 12/14/2013 Agreement rebid and awarded to CDW•G Victoria Independent School District Technology RFP 03/01/2011 03/01/2014 Unknown reason McKinney Independent School District Technology & Technical Products & Services 03/25/2009 03/24/2014 Unknown reason Alabama Joint Purchasing Program ALJP 2011 - Planar 05/16/2011 05/15/2014 Line item rebid and not awarded to CDW•G Alabama Joint Purchasing Program ALJP2011-037: AVerMedia 09/25/2012 05/15/2014 Line item rebid and not awarded to CDW•G Washington Learning Source Adobe CLP Software 07/13/2007 07/31/2014 Agreement not rebid Washington Learning Source Aruba Networking Equipment 05/22/2009 07/31/2014 Agreement not rebid Management Council Ohio Education Computer Network MSPSA 41025 02/01/2013 01/31/2015 Unknown reason The Interlocal Purchasing System Computer Equipment, Components and Peripherals 06/28/2012 06/29/2015 Agreement rebid and awarded to CDW•G The Interlocal Purchasing System TIPS-TAPS Software 08/09/2010 07/23/2015 Agreement rebid and awarded to CDW•G Digital Edge Digital Edge Wireless Mobile Devices 05/28/2014 12/31/2015 Agreement rebid and not awarded to CDW•G State of Alabama Department of Finance Blackberry Support 04/22/2010 04/21/2015 Contract expired. No reason on file for why this was not renewed.
State of Alabama Department of Finance Alabama Apple PC and Servers 11/01/2013 10/31/2015 CDW•G was named to a new Contract.
State of Alabama Department of Finance Alabama Printers and Scanners 12/17/2012 12/16/2015 CDW•G was named to a new Contract.
County of Albany Department of General Services Albany County Printers, Accessories and Supplies 08/22/2013 08/21/2015 Contract expired and was not renewed. There was no replacement RFP.
Xerox Corporation State of Arkansas Xerox 04/06/2012 04/30/2015 CDW•G was named to a new Contract.
Baldwin County Baldwin County Commission Microcomputer 10/21/2014 10/21/2015 CDW•G was named to a new Contract.
State of California, Department of General Services SLP Adobe 01/24/2014 12/31/2015 CDW•G was named to a new Contract.
City of St. Petersburg City of St. Petersburg Computers, Ruggedized Laptop 03/07/2011 02/28/2014 Contract expired and was not renewed. There was no replacement RFP.
Commonwealth of Pennsylvania PA Commonwealth- Networking Equipment 10/01/2013 09/30/2016 Contract was extended until 2016.
County of Ventura County of Ventura Cisco 12/12/2013 06/30/2015 Contract expired. No reason on file for why this was not renewed.
State of Connecticut, Dept of Information Technology Audio Visual 08/01/2010 05/30/2014 CDW•G was named to a new Contract.
American Power Conversion FL APC IT Hardware 09/08/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
Cisco Systems, Inc. Florida Cisco IT Hardware 09/12/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
EMC Corporation State of Florida EMC 09/13/2005 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
Enterasys Networks, Inc. Florida Enterasys 09/08/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
Brocade Communications Systems, Inc. Florida Brocade IT Hardware 09/08/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
Hewlett- Packard Company Florida HP IT Storage, Network 09/12/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
Promark Technology, Inc. FL Promark IT Hardware 12/18/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6391921
Aruba Networks, Inc. Florida Aruba 10/14/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
Trippe Manufacturing Co. Florida Tripp Lite 03/23/2011 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
NetApp Florida NetApp 09/12/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
IBM Corporation Florida IBM 09/08/2008 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA. immixGroup, Inc. Florida Immix Riverbed 02/14/2013 09/07/2014 Contract expired and was not renewed. FL wanted to move to WSCA.
Cisco Systems, Inc. Florida Cisco Audio and Visual Equipment and Accessories 08/19/2011 02/18/2015 Contract expired and was not renewed. FL wanted to move to WSCA.
Cisco Systems, Inc. Florida Cisco Telephony 12/09/2008 09/02/2015 Contract expired and was not renewed. FL wanted to move to WSCA.
Carahsoft Technology Corp State of Georgia F5/Carahsoft 12/31/2014 06/30/2015 CDW•G was named to a new Contract.
Extreme Networks, Inc. State of Georgia Extreme Networks 07/01/2012 06/30/2015 CDW•G was named to a new Contract.
Extreme Networks, Inc. State of Georgia Enterasys 07/01/2012 06/30/2015 CDW•G was named to a new Contract.
Pace Microsoft Licenses, Terminal Services CAL and Core CAL Step-up 06/19/2012 12/31/2013 Contract expired and was not renewed. There was no replacement RFP.
Illinois Department of Central Management Services IL EMC Capacity Expansion/Maint. Contract 06/27/2013 07/01/2015 Contract expired and was not renewed. There was no replacement RFP.
Illinois Department of Central Management Services Illinois Adobe Master Contract 07/14/2008 06/30/2013 Contract expired and was not renewed. There was no replacement RFP.
Illinois Department of Central Management Services IL Microsoft EA Agreement 10/01/2011 09/30/2015 CDW•G was named to a new Contract.
Illinois Department of Central Management Services Illinois Microsoft LAR Agreement 10/01/2011 09/30/2015 CDW•G was named to a new Contract.
Illinois DOT Illinois DOT Microsoft Premier Support Service 11/24/2013 11/23/2014 CDW•G was named to a new Contract.
Hewlett- Packard Company Indiana HP QPA 03/05/2014 10/31/2015 Contract expired. No reason on file for why this was not renewed.
Kansas Department of Administration Kansas Cisco Contract 07/23/2007 12/31/2015 CDW•G was named to a new Contract.
Aruba Wireless Networks, Inc. Louisiana Aruba 08/26/2013 08/25/2015 Contract expired. No reason on file for why this was not renewed.
County of Los Angeles Internal Services Department County of Los Angeles Cisco Hardware 07/21/2010 10/20/2015 CDW•G was named to a new Contract.
Promethean, Inc. State of Louisiana Promethean 04/05/2012 10/04/2015 Contract expired. No reason on file for why this was not renewed.
Trippe Manufacturing Company State of Louisiana Tripp Lite 05/15/2012 11/14/2015 We are still awaiting renewal Epson America, Inc. State of Louisiana Epson 10/01/2014 06/10/2015 CDW•G was named to a new Contract.
Lake County Computer Workstation Hardware 12/01/2011 11/30/2015 Contract expired. No reason on file for why this was not renewed.
Louisville Jefferson County Metro Government Louisville Jefferson County Metro Government Hardware, Software 05/18/2010 09/30/2015 CDW•G was named to a new Contract.
City of Cambridge Misc Computer Hardware & Software for the Police Department 12/10/2014 12/09/2015 Contract expired. No reason on file for why this was not renewed.
Mississippi Department of Information Technology Services Mississippi Microsoft EPL 3640 12/01/2010 06/01/2014 CDW•G was named to a new Contract.
Mississippi Department of Information Technology Services Software Express Products List 06/23/2009 06/30/2014 CDW•G was named to a new Contract.
Mississippi Department of Information Technology Services Mississippi IT Hardware EPL 3658 07/01/2011 02/13/2015 CDW•G was named to a new Contract.
Carahsoft Technology Corp North Carolina Carahsoft VMware 11/20/2014 09/11/2015 Contract expired. No reason on file for why this was not renewed.
Ricoh Americas Corporation NC Ricoh Printer 204D 08/01/2007 03/31/2013 Contract expired and was not renewed, but Ricoh is looking to award a new cont Hewlett- Packard Company North Carolina HP Thin Client 06/15/2012 06/14/2013 Contract expired. No reason on file for why this was not renewed.
North Carolina Department of Administration North Carolina Citrix 08/01/2012 07/31/2013 CDW•G chose not to extend the contract for no sales.
North Carolina Department of Administration NC Ruggedized Accessories 204B 06/01/2007 10/31/2013 CDW•G was named to a new Contract.
Panasonic Computer Solutions Company NC Panasonic Rugged Computers 06/01/2007 10/31/2013 CDW•G was named to a new Contract.
Hewlett- Packard Company North Carolina HP Printer 04/01/2013 03/31/2014 CDW•G was named to a new Contract.
Carahsoft Technology Corp. Carahsoft VMWare Software 09/10/2014 09/09/2015 Contract expired. No reason on file for why this was not renewed.
North Carolina Department of Administration NC Mass Storage ITS-006498 09/20/2012 03/31/2016 Contract was extended until 2016.
NetApp, Inc. NC 204J NetApp Mass Storage 09/20/2012 09/20/2015 Contract expired. No reason on file for why this was not renewed.
North Carolina Department of Administration NC Ruggedized Computers and Accessories 11/01/2013 10/31/2015 Contract expired. No reason on file for why this was not renewed.
Synnex Corporation North Central EMS Cooperative 04/25/2011 02/09/2014 Contract expired. No reason on file for why this was not renewed.
Synnex Corporation North Central EMS Cooperative 04/25/2011 02/09/2014 Contract expired. No reason on file for why this was not renewed.
Noble County Clerk Noble County Office Supplies 07/01/2015 12/31/2015 Still awaiting 3M Projection Systems NY OGS-3M Projection Systems Audio Visual 11/01/2008 10/31/2013 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Mitsubishi Digital Electronics NY OGS-Mitsubishi Audio Visual 11/01/2008 10/31/2013 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Optoma Technology, Inc. NY OGS-Optoma Technology Audio Visual 10/01/2008 10/31/2013 Contract expired and was not renewed. NY OGS did not open up for RFP again.
PolyVision Corporation NY OGS-Polyvision Audio Visual 05/06/2010 10/31/2013 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Hitachi Data Systems NY OGS-Hitachi Systems & Peripherals Storage 11/25/2009 02/10/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
ExaGrid Systems, Inc. NY OGS-ExaGrid Systems Inc Storage Systems and Peripherals 08/17/2011 02/10/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Quantum Corporation NY OGS-Quantum Corporation Systems and Peripheral (Storage) 02/11/2004 02/11/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Trend Micro, Inc. NY OGS-Trend Micro Microcomputer Software 03/03/2009 03/02/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
International Business Machines Corporation (IBM) NY OGS-IBM Enterprise Systems Xseries 07/02/2008 07/01/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Citrix Systems, Inc. NY OGS-Citrix Microcomputer Software 08/09/2004 08/08/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Epson America, Inc. NY OGS-Epson Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Infocus Corporation NY OGS-Infocus Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
NEC Display Solutions of America NY OGS-NEC Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
AverMedia Technologies, Inc. NY OGS-AverMedia Technologies Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6401922
Elmo USA Corp. NY OGS-Elmo Corp Audio Visual 11/01/2008 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Steelcase, Inc. NY OGS-NY OGS Steelcase VID#1000009217 08/29/2005 10/31/2014 Contract expired and was not renewed. NY OGS did not open up for RFP again.
EMC Corporation NY OGS-EMC Storage Systems and Peripherals 03/05/2004 08/31/2015 Contract expired and was not renewed. NY OGS did not open up for RFP again.
NetApp, Inc. NY OGS-NetApp Inc Systems and Peripheral (Storage) 02/11/2004 08/31/2015 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Hewlett- Packard Company NY OGS-HP Enterprise Systems 06/17/2011 10/22/2015 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Hewlett- Packard Company NY OGS-HP Storage Systems and Peripherals 07/19/2007 12/10/2015 Contract expired and was not renewed. NY OGS did not open up for RFP again.
Acer America Corp. NY OGS-Acer Computer Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS.
Fujitsu Computer Systems, Corporation NY OGS-Fujitsu Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS.
Hewlett- Packard Company NY OGS-HP Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS.
Lenovo (United States) Inc. NY OGS-Lenovo Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS.
Panasonic Computer Solutions Company NY OGS-Panasonic Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS.
Seneca Data Distributors, Inc. NY OGS-SenecaData Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS.
Sony Electronics, Inc. NY OGS-Sony Microcomputer Systems 12/29/2010 12/28/2015 Contract may be renewed, pending NY OGS.
Toshiba America Information Systems, Inc. NY OGS-Toshiba Microcomputer Systems 02/24/2011 12/28/2015 Contract may be renewed, pending NY OGS.
Asus Computer International NY OGS-Asus Microcomputer System 04/21/2011 12/28/2015 Contract may be renewed, pending NY OGS.
Department of Information Technology and Telecommunications (DNYC DOITT Panasonic 04/10/2013 12/29/2015 Contract will expire and not being renewed.
Oakland County, Michigan Oakland County Microsoft Enterprise 09/01/2010 08/31/2013 Contract expired and was not renewed. There was no replacement RFP.
Oakland County, Michigan Oakland County Michigan Fujitsu Tablets 10/01/2010 09/30/2013 Contract expired and was not renewed. There was no replacement RFP.
Aruba Wireless Networks, Inc. State of Oklahoma Aruba Networking 02/20/2014 02/19/2015 CDW•G was named to a new Contract.
State of Pennsylvania, Department of General Services Costars-3 IT Hardware 09/23/2005 09/08/2015 CDW•G was named to a new Contract.
State of Pennsylvania, Department of General Services Costars Software 08/01/2008 11/30/2015 CDW•G was named to a new Contract.
Philadelphia Housing Authority Philadelphia Housing Authority Hardware 04/01/2014 03/31/2015 Contract expired and was not renewed. There was no replacement RFP.
Philadelphia Housing Authority Philadelphia Housing Authority Software 04/01/2014 03/31/2015 Contract expired and was not renewed. There was no replacement RFP.
Pennsylvania Department of General Services PA IT Hardware Rugged Toughbooks 01/15/2009 09/30/2013 CDW•G was named to a new Contract.
Pennsylvania Department of General Services PA IT Networking Contract 08/12/2008 09/30/2013 CDW•G was named to a new Contract.
South Carolina Information Technology Management Office South Carolina AverMedia 08/03/2011 08/02/2015 CDW•G was named to a new Contract.
Mitsubishi Digital Electronics South Carolina Mitsubishi AV 08/11/2006 08/05/2015 CDW•G was named to a new Contract.
South Carolina Information Technology Management Office South Carolina Polyvision 08/03/2011 08/05/2015 CDW•G was named to a new Contract.
South Carolina Information Technology Management Office South Carolina Enterasys 09/08/2010 09/07/2015 CDW•G was named to a new Contract.
Bretford Manufacturing South Carolina Bretford 09/03/2009 12/31/2015 Still awaiting Epson America, Inc. South Carolina Epson AV 07/10/2006 12/31/2015 Still awaiting NEC Display Solutions of America South Carolina NEC Audio Visual 08/02/2006 12/31/2015 Still awaiting State of Tennessee, Department of General Services Tennessee Cisco Hardware, Software, and Services 01/01/2013 12/31/2015 CDW•G was named to a new Contract.
EMC Corporation TX DIR EMC Software 05/04/2011 05/04/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. TX DIR Lexmark 09/27/2012 05/18/2015 CDW•G was named to a new Contract.
Oki Data Americas, Inc. TX DIR Okidata 05/30/2007 06/07/2015 CDW•G was named to a new Contract.
Xerox Corporation TX DIR Xerox 03/26/2007 06/07/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation TX DIR Ricoh 08/09/2012 06/10/2015 We are still awaiting renewal Samsung Electronics America, Inc. Texas DIR Samsung 03/17/2014 08/07/2015 CDW•G was named to a new Contract.
EMC Corporation TX DIR EMC 09/10/2014 09/10/2015 CDW•G was named to a new Contract.
Epson America, Inc. TX DIR Epson Projectors 03/29/2013 12/07/2015 Epson has renewed and is working with DIR to update site soon Panasonic Computer Solutions Company TX DIR Panasonic 12/20/2013 12/20/2015 Not technically expired but we are still awaiting renewal Lenovo (United States) Inc. TX DIR Lenovo 12/28/2012 12/28/2015 CDW•G was named to a new Contract.
City of Richmond Department of Procurement Services Richmond Information Technology Supply Schedule 04/16/2008 04/30/2014 CDW•G was named to a new Contract.
Virginia Information Technologies Agency VITA Statewide Printer Wide Format Device 10/29/2010 04/30/2013 Contract expired and was not renewed. There was no replacement RFP.
Virginia Information Technologies Agency VITA Hardware and Maintenance Contract 02/06/2009 03/31/2014 CDW•G was named to a new Contract.
Virginia Information Technologies Agency VITA Software License Contract 02/06/2009 03/31/2014 CDW•G was named to a new Contract.
Virginia Information Technologies Agency VITA Server and Maintenance Contract 01/11/2010 03/31/2014 Contract expired and was not renewed. There was no replacement RFP.
Virginia Information Technologies Agency VITA Storage 01/13/2011 11/29/2016 Contract was extended until 2016.
State of Vermont VT Computer Peripherals 10/12/2011 09/30/2015 Contract expired. No reason on file for why this was not renewed.
Wisconsin Department of Administration, Bureau of Procurement Wisconsin Microcomputer Software Contact 09/01/2005 02/28/2013 CDW•G was named to a new Contract.
Wisconsin Department of Administration, Bureau of Procurement Wisconsin Microcomputer Software Contact 09/01/2010 08/31/2015 CDW•G was named to a new Contract.
Hewlett- Packard Company HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. Extreme WSCA 08/14/2009 05/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. Alaska Extreme WSCA 03/15/2011 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. California WSCA Cisco 05/23/2008 05/31/2014 CDW•G was named to a new Contract.
Hewlett- Packard Company California HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6411923
Hewlett- Packard Company Colorado HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. Colorado Extreme WSCA 03/15/2011 05/31/2014 CDW•G was named to a new Contract.
Hewlett- Packard Company Hawaii HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. Iowa WSCA Cisco 08/14/2009 05/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. Iowa Extreme WSCA 10/24/2011 05/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. Kansas Extreme WSCA 10/24/2011 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. Kentucky Cisco WSCA 08/01/2011 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. Louisiana Cisco WSCA 10/23/2012 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. Michigan Cisco WSCA 05/02/2012 05/31/2014 CDW•G was named to a new Contract.
Hewlett- Packard Company Minnesota HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. New Jersey Cisco WSCA 04/21/2009 05/31/2014 CDW•G was named to a new Contract.
Hewlett- Packard Company New Jersey HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. Nevada Extreme WSCA 08/14/2009 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. Nevada Cisco WSCA 05/13/2013 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. Oregon Cisco WSCA 09/01/2009 05/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. South Dakota Extreme WSCA 10/24/2011 05/31/2014 CDW•G was named to a new Contract.
Hewlett- Packard Company Utah HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. Washington Cisco WSCA NASPO 02/08/2010 05/31/2014 CDW•G was named to a new Contract.
Hewlett- Packard Company Washington HP WSCA Data Communications 04/29/2010 05/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. Washington Extreme WSCA 10/24/2011 05/31/2014 CDW•G was named to a new Contract.
Cisco Systems, Inc. Wisconsin Cisco WSCA 09/22/2010 05/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. California Extreme WSCA 03/15/2011 08/31/2014 CDW•G was named to a new Contract.
EMC Corporation Colorado EMC WSCA 10/09/2009 08/31/2014 CDW•G was named to a new Contract.
Extreme Networks, Inc. Missouri Extreme WSCA 10/24/2011 08/31/2014 CDW•G was named to a new Contract.
Panasonic Systems Communications Company South Carolina Panasonic WSCA NASPO 12/28/2011 08/31/2014 CDW•G was named to a new Contract.
Lexmark International, Inc. South Carolina Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract.
Lexmark International, Inc. South Dakota Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract.
Lexmark International, Inc. Utah Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract.
Extreme Networks, Inc. Utah Extreme WSCA 10/24/2011 08/31/2014 CDW•G was named to a new Contract.
Lexmark International, Inc. Washington Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract.
Lexmark International, Inc. Wisconsin Lexmark WSCA NASPO 09/01/2009 08/31/2014 Lexmark did not sign a new contract.
EMC Corporation Connecticut EMC WSCA 09/01/2009 12/31/2014 CDW•G was named to a new Contract.
NetApp, Inc. Georgia NetApp WSCA 10/20/2010 12/31/2014 CDW•G was named to a new Contract.
NetApp, Inc. Minnesota NetApp WSCA 03/29/2012 12/31/2014 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Ohio Lenovo WSCA NASPO 09/01/2009 12/31/2014 CDW•G was named to a new Contract.
EMC Corporation Rhode Island EMC WSCA 09/01/2009 12/31/2014 CDW•G was named to a new Contract.
NetApp, Inc. NetApp WSCA NASPO 09/01/2009 03/31/2015 CDW•G was named to a new Contract.
NetApp, Inc. Arizona NetApp WSCA 09/08/2010 03/31/2015 CDW•G was named to a new Contract.
EMC Corporation Florida EMC NVP Computer Equipment 11/30/2015 03/31/2015 CDW•G was named to a new Contract.
NetApp, Inc. Idaho NetApp WSCA 01/13/2011 03/31/2015 CDW•G was named to a new Contract.
Hewlett Packard Company Alaska HP WSCA NASPO 06/04/2013 06/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company Delaware HP WSCA NASPO 06/13/2012 06/30/2015 CDW•G was named to a new Contract.
Fujitsu America, Inc. Idaho Fujitsu WSCA NASPO 11/08/2010 06/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation EMC WSCA/NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Hewlett Packard Company HP WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Fujitsu America, Inc. Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Xerox Corporation Xerox WSCA NASPO 03/01/2011 09/30/2015 Xerox did not sign a new contract.
Lenovo (United States) Inc. Alaska Lenovo WSCA NASPO 06/30/2010 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Alaska Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Alaska EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation Alaska Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Alaska Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Panasonic Systems Communications Company Arkansas Panasonic WSCA NASPO 11/23/2011 09/30/2015 CDW•G was named to a new Contract.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6421924
NetApp, Inc. Arkansas NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company Arkansas HP WSCA NASPO 11/11/2013 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation Arizona Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. California Lenovo WSCA NASPO 08/22/2011 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation California EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. California NetApp WSCA 10/13/2010 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation California Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. California Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Fujitsu America, Inc. California Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company California HP WSCA NASPO 05/09/2013 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Colorado Lenovo WSCA NASPO 07/17/2012 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Colorado Panasonic WSCA NASPO 08/01/2009 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Colorado NetApp WSCA 09/08/2010 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Colorado Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Fujitsu America, Inc. Colorado Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company Colorado HP WSCA NASPO 06/04/2013 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Delaware Lenovo WSCA NASPO 11/22/2010 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Delaware Panasonic WSCA NASPO 09/02/2009 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Delaware EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Delaware NetApp WSCA 01/13/2011 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation Delaware Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Fujitsu America, Inc. Delaware Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Florida Lenovo WSCA NASPO 06/01/2012 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Florida Panasonic WSCA NASPO 06/14/2012 09/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company Florida HP WSCA NASPO 08/30/2013 09/30/2015 CDW•G was named to a new Contract.
Fujitsu America, Inc. Florida Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Florida EMC WSCA 01/27/2015 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Florida NetApp WSCA 03/09/2015 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Georgia EMC WSCA 11/01/2010 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Georgia NetApp WSCA 02/28/2013 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation Hawaii Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Iowa Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Iowa Panasonic WSCA NASPO 05/04/2010 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Iowa EMC WSCA 11/03/2010 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Iowa NetApp WSCA 09/28/2010 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Iowa Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Fujitsu America, Inc. Iowa Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Idaho Panasonic WSCA NASPO 08/31/2009 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Kansas Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Kansas Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Fujitsu America, Inc. Kansas Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Louisiana Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Louisiana EMC WSCA 12/13/2010 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Louisiana NetApp WSCA 04/18/2011 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Louisiana Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Hewlett Packard Company Louisiana HP WSCA NASPO 06/05/2013 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Missouri Lenovo WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Missouri Panasonic WSCA NASPO 08/28/2009 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Missouri EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Missouri NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Missouri Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Fujitsu America, Inc. Missouri Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation Missouri Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. Montana Lenovo WSCA NASPO 09/01/2008 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Montana Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Montana EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Montana NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6431925
Ricoh Americas Corporation Montana Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Montana Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Hewlett Packard Company Montana HP WSCA NASPO 06/04/2013 09/30/2015 CDW•G was named to a new Contract.
Lenovo (United States) Inc. North Dakota Lenovo WSCA NASPO 12/09/2010 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company North Dakota Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. North Dakota Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
EMC Corporation North Dakota EMC WSCA 05/10/2013 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Nebraska Panasonic WSCA NASPO 12/28/2011 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Nebraska NetApp WSCA 01/11/2012 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Nebraska EMC WSCA 10/01/2012 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company New Jersey Panasonic WSCA NASPO 02/10/2010 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation New Jersey EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. New Jersey NetApp WSCA 03/23/2011 09/30/2015 CDW•G was named to a new Contract.
Xerox Corporation New Jersey Xerox WSCA 02/23/2011 09/30/2015 Xerox did not sign a new contract.
Hewlett Packard Company New Jersey HP WSCA NASPO 11/16/2011 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. New Jersey Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Ricoh Americas Corporation New Mexico Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Nevada Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Nevada EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Nevada NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation Nevada Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Nevada Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Fujitsu America, Inc. Nevada Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company Ohio HP WSCA NASPO 11/16/2011 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Oklahoma Panasonic WSCA NASPO 06/14/2012 09/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company OR PC Peripherals Agreement 07/01/2010 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Oregon Panasonic WSCA NASPO 07/31/2009 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Oregon EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Oregon NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract.
Xerox Corporation Oregon Xerox WSCA 03/01/2011 09/30/2015 Xerox did not sign a new contract.
Hewlett Packard Company Oregon HP WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Lexmark International, Inc. Oregon Lexmark WSCA NASPO 09/01/2009 09/30/2015 Lexmark did not sign a new contract.
Panasonic Systems Communications Company South Dakota Panasonic WSCA NASPO 11/23/2011 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation South Dakota EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Fujitsu America, Inc. South Dakota Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. South Dakota NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Tennessee EMC WSCA 03/22/2013 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Utah Panasonic WSCA NASPO 06/14/2012 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Utah EMC WSCA 09/01/2010 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Utah NetApp WSCA 06/30/2010 09/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company Utah HP WSCA NASPO 06/04/2013 09/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company Vermont HP WSCA NASPO 06/13/2012 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Vermont Panasonic WSCA NASPO 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Vermont EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation Vermont Ricoh WSCA NASPO 05/19/2010 09/30/2015 CDW•G was named to a new Contract.
Fujitsu America, Inc. Vermont Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Washington Panasonic WSCA NASPO 08/10/2011 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Washington NetApp WSCA 09/28/2010 09/30/2015 CDW•G was named to a new Contract.
Xerox Corporation Washington Xerox WSCA 04/25/2011 09/30/2015 Xerox did not sign a new contract.
EMC Corporation Washington EMC WSCA 09/02/2009 09/30/2015 CDW•G was named to a new Contract.
Fujitsu America, Inc. Washington Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
Hewlett Packard Company Washington HP WSCA NASPO 06/26/2013 09/30/2015 CDW•G was named to a new Contract.
Panasonic Systems Communications Company Wisconsin Panasonic WSCA NASPO 12/28/2011 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Wisconsin EMC WSCA 09/02/2009 09/30/2015 CDW•G was named to a new Contract.
NetApp, Inc. Wisconsin NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract.
Ricoh Americas Corporation Wisconsin Ricoh WSCA NASPO 05/21/2010 09/30/2015 CDW•G was named to a new Contract.
Fujitsu America, Inc. Wisconsin Fujitsu WSCA NASPO 11/08/2010 09/30/2015 CDW•G was named to a new Contract.
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6441926
NetApp, Inc. West Virginia NetApp WSCA 03/29/2012 09/30/2015 CDW•G was named to a new Contract.
EMC Corporation Wyoming EMC WSCA 09/01/2009 09/30/2015 CDW•G was named to a new Contract.
West Virginia Department of Administration Purchasing Division West Virgina Personal Computers and Peripherals Blanket Order 05/01/2008 06/30/2013 Contract expired and was not renewed. There was no replacement RFP.
Wyoming Game and Fish Dept Wyoming Game and Fish Dept. GPS Units 09/02/2011 06/30/2014 Contract expired. No reason on file for why this was not renewed.
Samaritan Health Services Master Service Sales Agreement 03/28/2012 03/27/2014 Contract expired. No reason on file for why this was not renewed.
Brocade Communications Systems, Inc. Alaska Brocade WSCA Data Communications 11/01/2012 05/31/2014 CDW•G was named to a new Contract.
Brocade Communications Systems, Inc. California Brocade WSCA Data Communications 11/02/2012 05/31/2014 CDW•G was named to a new Contract.
Brocade Communications Systems, Inc. Delaware Brocade WSCA Data Communications 11/01/2012 05/31/2014 CDW•G was named to a new Contract.
Brocade Communications Systems, Inc. Washington Brocade WSCA Data Communications 11/01/2012 05/31/2014 CDW•G was named to a new Contract.
Brocade Communications Systems, Inc. Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract.
Brocade Communications Systems, Inc. Colorado Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract.
Brocade Communications Systems, Inc. Hawaii Brocade WSCA Data Communications 03/21/2013 08/31/2014 CDW•G was named to a new Contract.
Brocade Communications Systems, Inc. Missouri Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract.
Brocade Communications Systems, Inc. New Jersey Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract.
Brocade Communications Systems, Inc. Utah Brocade WSCA Data Communications 11/01/2012 08/31/2014 CDW•G was named to a new Contract.
Onondaga- Cortland DATA COMMUNICATIONS EQUIPMENT 11/01/2013 10/31/2014 Contract expired. No reason on file for why this was not renewed.
Harris County Harris County Virtualization Software Upgrade 10/28/2014 10/27/2015 CDW•G was named to a new Contract.
Technical College System of Georgia CISCO Unified Communications Products 04/14/2010 04/13/2013 Unknown reason Ohio Wesleyan University Master Product Sales Agreement 06/21/2010 06/20/2013 Customer is using other contarcts CDW holds University of Minnesota Electronic Commerce Agreement between the University of Minneso 11/15/2008 06/30/2013 New Contract was awarded to CDW City of Tucson Department of Procurement-EXPIRED National IPA Technology Solutions 03/01/2009 08/18/2013 New Contract was awarded to CDW Paine College Master Product Sales Agreement 09/14/2011 09/14/2013 Not Enough contract spend so Agreement was not extended Massachusetts Higher Education Consortium Massachusetts Consortium Contract - Multi-Media Equipment MC10 11/01/2010 09/30/2013 New Contract was awarded to CDW University of Tennssee Microcomputers University of Tennessee 10/01/2008 09/30/2013 CDW was not awarded a new agreement University of Kentucky Cisco Networking Products and Services 03/08/2010 03/09/2014 Unknown reason Toccoa Falls College Managed Print Services 04/13/2011 04/13/2014 Not Enough contract spend so Agreement was not extended University of New Mexico Agreement between University of New Mexico and CDWG for techn 04/17/2006 04/16/2014 Unknown reason Morehouse School of Medicine Master Product Sales Agreement 04/22/2013 04/22/2014 Agreement was not renewed as they became a member of a co-op York College of Pennsylvania York College of Pennsylvania Product Purchase Agreement 09/12/2008 05/20/2014 Spend was not high enough to extend Universal Technical Institute Master Product Sales Agreement between CDW Government LLC an 06/07/2010 06/07/2014 Unknown reason Massachusetts Higher Education Consortium MHEC Contract #F04, Software 07/01/2012 06/30/2014 New Contract was awarded to CDW•G University of Connecticut Invitation to Bid Document B991910-G Network and Security Hardwa 07/10/2009 06/30/2014 Unknown reason University of Connecticut Network and Security Software 06/16/2010 06/30/2014 Unknown reason Massachusetts Higher Education Consortium MHEC Contract #04, Software 07/01/2010 06/30/2014 New Contract was awarded to CDW•G Stratford University MPSA between Stratford University and CDWG 07/13/2010 07/13/2014 Unknown reason Illinois Valley Community College Managed Print Services Agreement 08/04/2009 08/03/2014 Agreement was not renewed as they use other agreements Bay De Noc Community College Managed Print Services 08/19/2009 08/18/2014 Not Enough contract spend so Agreement was not extended Barry University Master Product Sales Agreement 08/22/2011 08/21/2014 Agreement was not renewed as they became a member of a co-op Eastern Illinois University Product Sales and Service Projects Agreement 04/15/2013 04/14/2015 Agreement was not renewed customer uses oterh agreements instead Massachusetts Higher Education Consortium MHEC Contract #F05, Technology 08/06/2011 07/31/2015 New Contract was awarded to CDW•G Broome-Tioga BOCES Broome-Tioga BOCES AV and Related Technology Equipment 01/16/2014 01/15/2015 Unknown reason City of Hartford - Hartford Public Schools
City of Hartford - Hartford Public Schools Desktop, Laptop, Tablet Devices, Servers, Deployment/Other Technical Services, Device Parts/Peripherals, and Software Licensing 11/19/2012 08/31/2013 Rebid and CDWG was awarded a new contract
Clarkstown Central School District Clarkstown Central School District Chromebooks (as needed) 01/24/2014 01/23/2014 Unknown reason Eastern Suffolk BOCES Eastern Suffolk BOCES Wireless Tablets and Notebooks 01/01/2014 11/30/2014 Unknown reason Nassau BOCES Nassau BOCES Computer Hardware, Software, Networking Supplies 01/30/2014 01/29/2015 Unknown reason
Nassau BOCES Nassau BOCES NASSAU BOCES iPad Cases 05/01/2014 08/09/2015 Unknown reason New York City Department of Education New York City Department of Education A/V Equipment 11/06/2008 01/31/2014 Rebid and CDWG was awarded a new contract New York City Department of Education New York City Department of Education Interactive Whiteboard 11/06/2008 06/30/2013 Rebid and CDWG was awarded a new contract New York City Department of Education
New York City Department of Education Printers, Software, Peripherals, Accessories & Related Services 04/01/2012 03/31/2015 Rebid and CDWG was awarded a new contract DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6451927
Onondaga-Cortland-Madison Board of Cooperative Educational Serv Onondaga-Cortland-Madison Board of Cooperative Educational Services DATA COMMUNICATIONS EQUIPMENT 11/01/2014 11/02/2015 Unknown reason Onondaga-Cortland-Madison Board of Cooperative Educational Serv Onondaga-Cortland-Madison Board of Cooperative Educational Services COMPUTER PERIPHERALS 04/04/2014 03/31/2015 Unknown reason Onondaga-Cortland-Madison Board of Cooperative Educational Serv Onondaga-Cortland-Madison Board of Cooperative Educational Services Computers, Storage Systems, Accessories and
Replacement Parts
04/04/2014
03/31/2015
Unknown reason
Onondaga-Cortland-Madison Board of Cooperative Educational Serv Onondaga-Cortland-Madison Board of Cooperative Educational Services (BOCES) OCM Data Communications Equip RFB-215-20 11/01/2014 11/02/2015
Unknown reason
Orange Ulster BOCES Orange Ulster BOCES Google Chromebooks 10/19/2013 10/18/2014 Unknown reason Patchogue Medford Schools Patchogue Medford Schools AV Supply Bid 03/27/2015 06/30/2015 Unknown reason PEPPM
PEPPM General Hardware & Software / Remanufacturered Toner & Ink Cartridges 01/01/2010 12/31/2013 Rebid and CDWG was awarded a new contract PEPPM PEPPM General Hardware and Software 04/21/2011 12/31/2014 Rebid and CDWG was awarded a new contract Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Chromebooks 01/17/2013 06/30/2014 Rebid and CDWG was awarded a new contract Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Misc. Printers 07/11/2013 12/31/2014 Unknown reason
Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Microcomputer Hardware 09/05/2014 06/30/2015 Unknown reason Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Southern Westchester BOCES AV Pricing 09/01/2014 09/01/2015 Unknown reason Southern Westchester Board of Cooperative Educational Services Southern Westchester Board of Cooperative Educational Services Southern Westchester BOCES Chromebook & Google Software 07/10/2014 07/01/2015 Unknown reason Ulster County BOCES Ulster County BOCES Chromebook & Chromebox 12/20/2012 08/31/2014 Unknown reason Western Suffolk BOCES Western Suffolk BOCES Printer & Toner Cartidges 07/01/2013 06/30/2014 Unknown reason Western Suffolk BOCES
Western Suffolk BOCES Samsung Series 3 Chromebook/Google MGT License & config services 01/01/2013 12/30/2013 Unknown reason Western Suffolk BOCES
Western Suffolk BOCES Professional Days for Computer Network Support LAN/WAN 07/01/2013 06/30/2014 Unknown reason
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6461928
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to
Commission File Number 001-35985
CDW CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 26-0273989
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
200 N. Milwaukee Avenue
Vernon Hills, Illinois 60061
(Address of principal executive offices) (Zip Code)
(847) 465-6000
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report) ____________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered Common stock, par value $0.01 per share NASDAQ Global Select Market Securities registered pursuant to Section 12(g) of the Act: None ____________________________________________
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes
No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10- K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company) Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
No
Table of Contents
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6471929
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 28, 2013, the last business day of the registrant’s most recently completed second fiscal quarter, was $654,984,661, based on the per share closing sale price of $18.62 on that date (assuming the closing of the registrant's initial public offering).
As of February 28, 2014, there were 171,954,277 shares of common stock, $0.01 par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for use in connection with its 2014 Annual Meeting of Shareholders, to be filed not later than 120 days after December 31, 2013, are incorporated by reference into Part III of this report.
Table of Contents
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6481930
2 CDW CORPORATION AND SUBSIDIARIES
ANNUAL REPORT ON FORM 10-K
Year Ended December 31, 2013
TABLE OF CONTENTS
Item Page
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
SIGNATURES
Business 4
Risk Factors 9
Unresolved Staff Comments 20
Properties 20
Legal Proceedings 21
Mine Safety Disclosures 21
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24
Selected Financial Data 26
Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Quantitative and Qualitative Disclosures About Market Risk 60 Financial Statements and Supplementary Data 61
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 109 Controls and Procedures 109
Other Information 111
Directors, Executive Officers and Corporate Governance 112 Executive Compensation 112
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 112 Certain Relationships and Related Transactions, and Director Independence 112 Principal Accountant Fees and Services 112
Exhibits and Financial Statement Schedules 113
114
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6491931
3 FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact included in this report are forward-looking statements. These statements relate to analyses and other information, which are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. We claim the protection of The Private Securities Litigation Reform Act of 1995 for all forward-looking statements in this report.
These forward-looking statements are identified by the use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions. However, these words are not the exclusive means of identifying such statements. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected.
Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the section entitled “Risk Factors” included elsewhere in this report. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements contained in the section entitled “Risk Factors” included elsewhere in this report as well as other cautionary statements that are made from time to time in our other Securities and Exchange Commission ("SEC") filings and public communications. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not contain all of the factors that are important to you.
In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Table of Contents
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6501932
4 PART I
Item 1. Business
Our Company
CDW is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions in the U.S. and Canada. We help our customer base of approximately 250,000 small, medium and large business, government, education and healthcare customers by delivering critical solutions to their increasingly complex IT needs. Our broad array of offerings ranges from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. We are technology "agnostic," with a product portfolio that includes more than 100,000 products from more than 1,000 brands. We provide our products and solutions through sales force and service delivery teams consisting of more than 4,400 coworkers, including nearly 1,800 field sellers, highly-skilled technology specialists and advanced service delivery engineers.
We are a leading U.S. sales channel partner for many original equipment manufacturers (“OEMs”) and software publishers (collectively, our “vendor partners”), whose products we sell or include in the solutions we offer. We believe we are an important extension of our vendor partners' sales and marketing capabilities, providing them with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market coverage and extensive customer access.
We provide value to our customers by simplifying the complexities of technology across design, selection, procurement, integration and management. Our goal is to have our customers, regardless of their size, view us as an indispensable extension of their IT staffs. We seek to achieve this goal by providing our customers with superior service through our large and experienced sales force and service delivery teams. Our multi-brand offering approach enables us to identify the products or combination of products that best address each customer's specific organizational IT requirements and to evolve our offerings as new technologies develop.
We believe we offer the following value proposition to our customers and our vendor partners:
Our value proposition to our customers Our value proposition to our vendor partners Broad selection of products and multi-branded IT
solutions
Value-added services with integration capabilities
Highly-skilled specialists and engineers
Solutions across a very broad IT landscape
Access to approximately 250,000 customers throughout
the U.S. and Canada
Large and established customer channels
Strong distribution and implementation capabilities
Value-added solutions and marketing programs that
generate end-user demand
Our customers include private sector businesses that typically employ fewer than 5,000 employees, government agencies and educational and healthcare institutions. We serve our customers through channel-specific sales teams and service delivery teams with extensive technical skills and knowledge of the specific markets they serve. This market segmentation allows us to customize our offerings and to provide enhanced expertise in designing and implementing IT solutions for our customers. We currently have five dedicated customer channels: medium/large business, small business, government, education and healthcare, each of which generated over $1 billion in net sales in 2013. The scale and diversity of our customer channels provide us with multiple avenues for growth and a balanced customer base to weather economic and technology cycles.
Table of Contents
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6511933
5 The following table provides information regarding our reportable segments and our customer channels:
Corporate Segment Public Segment
Customer
Channels
Medium/
Large
Business
Small
Business Government Education Healthcare Other
Target
Customers
100 - 5,000
employees
10 - 100
employees
Various federal,
state and local
agencies
Higher
education
and K-12
Hospitals,
ambulatory service
providers and long-
term care facilities
Advanced
services
customers plus
Canada
2013 Net
Sales
(in billions)
$4.9 $1.1 $1.3 $1.4 $1.5 $0.6
For further information on our segments, including financial results, see Note 16 to the accompanying audited consolidated financial statements included elsewhere in this report.
We offer more than 1,000 brands, from well-established companies such as APC, Apple, Cisco, EMC, Hewlett- Packard, IBM, Lenovo, Microsoft, NetApp, Symantec and VMware to emerging vendor partners such as Drobo, Fusion-io, Meraki, Nimble Storage, Salesforce.com, Sophos and Splunk. In 2013, we generated over $1 billion of revenue for each of four of our vendor partners and over $100 million of revenue for each of 11 other vendor partners. We have received the highest level of certification from major vendor partners such as Cisco, EMC and Microsoft, which reflects the extensive product and solution knowledge and capabilities that we bring to our customers' IT challenges. These certifications also provide us with access to favorable pricing, tools and resources, including vendor incentive programs, which we use to provide additional value to our customers. Our vendor partners also regularly recognize us with top awards and select us to develop and grow new customer solutions.
History
CDW was founded in 1984. In 2003, we purchased selected U.S. assets and the Canadian operations of Micro Warehouse, which extended our growth platform into Canada. In 2006, we acquired Berbee Information Networks Corporation, a regional provider of technology products, solutions and customized engineering services in advanced technologies primarily across Cisco, IBM and Microsoft portfolios. This acquisition increased our capabilities in customized engineering services and managed services.
On October 12, 2007, CDW Corporation, an Illinois corporation, was acquired through a merger transaction by an entity controlled by investment funds affiliated with Madison Dearborn Partners, LLC and Providence Equity Partners L.L.C. (the “Acquisition”). CDW Corporation continued as the surviving corporation and same legal entity after the Acquisition, but became a wholly owned subsidiary of VH Holdings, Inc., a Delaware corporation.
On December 31, 2009, CDW Corporation merged into CDWC LLC, an Illinois limited liability company owned by VH Holdings, Inc., with CDWC LLC as the surviving entity. This change had no impact on our operations or management. On December 31, 2009, CDWC LLC was renamed CDW LLC (“CDW LLC”). On August 17, 2010, VH Holdings, Inc. was renamed CDW Corporation (“Parent”), a Delaware corporation.
Throughout this report, the terms “the Company” and “CDW” refer to Parent and its 100% owned subsidiaries subsequent to the Acquisition.
Parent was previously owned directly by CDW Holdings LLC ("CDW Holdings"), a company controlled by investment funds affiliated with Madison Dearborn Partners, LLC and Providence Equity Partners L.L.C. (the "Sponsors"), certain other co-investors and certain members of CDW management. See "Sponsors" below. On July 2, 2013, Parent completed an initial public offering ("IPO") of its common stock. In connection with the IPO, CDW Holdings distributed all of its shares of Parent's common stock to its members in June 2013 in accordance with the members' respective membership interests and was subsequently dissolved in August 2013. See Note 9 to the accompanying audited consolidated financial statements included elsewhere in this report for additional discussion of the IPO.
The Sponsors beneficially owned approximately 63.7% of our common stock as of December 31, 2013.
Table of Contents
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6521934
6 Our Market
We operate in the U.S. and Canadian IT market, which is a large and growing market. According to IDC, the overall U.S. IT market generated approximately $660 billion in sales in 2013. We believe our addressable market in the U.S. in the indirect sales channel represents more than $200 billion in annual sales and for the year ended December 31, 2013, our U.S. net sales of $10.3 billion represented approximately 5% of that highly diverse and fragmented market. According to IDC, the overall Canadian IT market generated more than $50 billion in sales in 2013. We believe our addressable market in Canada in the indirect sales channel represents more than $10 billion in annual sales and for the year ended December 31, 2013, our net sales of $475 million in Canada represented approximately 4% of that market. We believe we have the largest market share in our addressable market, with our 2013 net sales exceeding the cumulative North American net sales of our four largest publicly traded sales channel competitors, based upon publicly available information for those companies. New technologies, including cloud, virtualization and mobility, coupled with the resulting increase in demand for data as well as aging infrastructure, are increasingly requiring businesses and institutions to seek integrated solutions to their IT needs. We expect this trend to continue for the foreseeable future, with end-user demand for business efficiency and productivity driving future IT spending growth.
Our Offerings
Our offerings range from discrete hardware and software products and services to complex integrated solutions that include one or more of these elements. We believe our customers increasingly view technology purchases as integrated solutions rather than discrete product and service categories and we estimate that approximately 51% of our net sales in 2013 came from sales of product categories and services typically associated with solutions. Our hardware products include notebooks/mobile devices (including tablets), network communications, enterprise and data storage, video monitors, printers, desktop computers and servers. Our software products include application suites, security, virtualization, operating systems, network management and Software as a Service (“SaaS”) offerings. We also provide a full suite of value-added-services, which range from basic installation, warranty and repair services to custom configuration, data center and network implementation services, as well as managed services that include Infrastructure as a Service (“IaaS”) offerings.
We also offer a variety of integrated solutions, such as:
• Mobility: We assist our customers with the selection, procurement and integration of mobile security software, hardware devices such as smartphones, tablets and notebooks, and cellular wireless activation systems. We also provide mobile device management applications with policy and security management capabilities across a variety of mobile operating systems and platforms.
• Security: We assess our customers' security needs and provide them with threat prevention tools in order to protect their networks, servers and applications, such as anti-virus, anti-spam, content filtering, intrusion prevention, firewall and virtual private network services, and network access control. We also design and implement data loss prevention solutions, using data monitoring and encryption across a wide array of devices to ensure the security of customer information, personal employee information and research and development data. • Data Center Optimization: We help our customers evaluate their data centers for convergence and optimization opportunities. Our data center optimization solutions consist of server virtualization, physical server consolidation, data storage management and energy-efficient power and cooling systems. • Cloud Computing: Cloud computing is a combination of software and computing delivered on demand as a service. We provide SaaS and IaaS solutions that reside in the public cloud, meaning any person or organization interested in porting applications and resources to an external “public” cloud system can do so. Likewise, we provide similar private cloud-based solutions to our customers that prefer to avoid running their infrastructure on a shared public platform but want to obtain the flexibility, scalability and access offered by cloud computing and collaboration. • Virtualization: We design and implement server, storage and desktop virtualization solutions. Virtualization enables our customers to efficiently utilize hardware resources by running multiple, independent, virtual operating systems on a single computer and multiple virtual servers simultaneously on a single server. Virtualization also can separate a desktop environment and associated application software from the hardware device that is used to access it, and provides employees with remote desktop access. Our specialists assist customers with the steps of implementing virtualization solutions, including evaluating network environments, deploying shared storage options and licensing platform software.
• Collaboration: We provide our customers with communication tools that allow employees to share knowledge, ideas and information among each other and with clients and partners effectively and quickly. Our collaboration solutions unite communications and applications via the integration of products that facilitate the use of Table of Contents
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7 multiple enterprise communication methods including email, instant messaging, presence, social media, voice, video, hardware, software and services. We also host cloud-based collaboration solutions.
While we believe customers increasingly view technology purchases as solutions rather than discrete product and service categories, the following table shows our net sales by major category, based upon our internal category classifications.
Year Ended December 31, 2013 Year Ended December 31, 2012(1) Year Ended December 31, 2011(1) Dollars in
Millions
Percentage
of Total
Net Sales
Dollars in
Millions
Percentage
of Total
Net Sales
Dollars in
Millions
Percentage
of Total
Net Sales
Notebooks/Mobile Devices $ 1,706.0 15.8% $ 1,470.1 14.5% $ 1,336.9 13.9% NetComm Products 1,489.1 13.8 1,351.1 13.3 1,237.7 12.9 Enterprise and Data Storage
(Including Drives) 998.1 9.3 979.4 9.7 929.9 9.7
Other Hardware 4,173.3 38.8 4,068.8 40.2 3,988.3 41.5
Software 1,994.7 18.5 1,849.4 18.3 1,767.2 18.4
Services 327.1 3.0 284.6 2.8 254.3 2.6
Other (2) 80.3 0.8 124.8 1.2 88.1 1.0
Total net sales $ 10,768.6 100.0% $ 10,128.2 100.0% $ 9,602.4 100.0% (1) Amounts have been reclassified for changes in individual product classifications to conform to the presentation for the year ended December 31, 2013.
(2) Includes items such as delivery charges to customers and certain commission revenue.
Our Customers
We provide integrated IT solutions to approximately 250,000 small, medium and large business, government, education and healthcare customers throughout the U.S. and Canada. Sales to the U.S. federal government, which are diversified across multiple agencies and departments, collectively accounted for approximately 7%, 10% and 10% of total net sales in 2013, 2012 and 2011, respectively. However, there are several independent purchasing decision-makers across these agencies and departments. Excluding these sales to the federal government, we are not reliant on any one customer, as our next five largest customers cumulatively comprised approximately 3% of our net sales in 2013.
Inventory Management
We utilize our IT systems to manage our inventory in a cost-efficient manner, resulting in a rapid-turn inventory model. We generally only stock items that have attained a minimum sales volume.
Our distribution process is highly automated. Once a customer order is received and credit approved, orders are automatically routed to one of our distribution centers for picking and shipping as well as configuration and imaging services.
We operate two distribution centers: an approximately 450,000 square foot facility in Vernon Hills, Illinois, and an approximately 513,000 square foot facility in North Las Vegas, Nevada. We ship almost 35 million units annually on an aggregate basis from our two distribution centers. We believe that the location of our distribution centers allows us to efficiently ship products throughout the U.S. and provide timely access to our principal distributors. In addition, in the event of weather-related or other disruptions at one of our distribution centers, we are able to shift order processing and fulfillment from one center to the other quickly and efficiently, enabling us to continue to ship products in a timely manner. We believe that competitive sources of supply are available in substantially all of the product categories we offer. We continue to improve the productivity of our distribution centers as measured by key performance indicators such as units shipped per hour worked and bin accuracy.
We also have drop-shipment arrangements with many of our OEMs and wholesale distributors, which permit us to offer products to our customers without having to take physical delivery at either of our distribution centers. These arrangements generally represent approximately 40% to 50% of total net sales, including approximately 10% to 15% related to electronic delivery for software licenses.
Information Technology Systems
We maintain customized IT and unified communication systems that enhance our ability to provide prompt, efficient and expert service to our customers. In addition, these systems enable centralized management of key functions, including Table of Contents
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8 purchasing, inventory management, billing and collection of accounts receivable, sales and distribution. Our systems provide us with thorough, detailed and real-time information regarding key aspects of our business. This capability helps us to continuously enhance productivity, ship customer orders quickly and efficiently, respond appropriately to industry changes and provide high levels of customer service. We believe that our websites, which provide electronic order processing and advanced tools, such as order tracking, reporting and asset management, make it easy for customers to transact business with us and ultimately strengthen our customer relationships.
Product Procurement
We may purchase all or only some of the products that our vendor partners offer for resale to our customers or for inclusion in the solutions we offer. Each vendor partner agreement provides for specific terms and conditions, which may include one or more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs, such as purchase or sales rebates and cooperative advertising reimbursements. We also purchase software from major software publishers for resale to our customers or for inclusion in the solutions we offer. Our agreements with software publishers allow the end-user customer to acquire software or licensed products and services.
In addition to purchasing products directly from our vendor partners, we purchase products from wholesale distributors for resale to our customers or for inclusion in the solutions we offer. These wholesale distributors provide logistics management and supply-chain services for us, as well as for our vendor partners. For the year ended December 31, 2013, we purchased 54% of the products we sold as discrete products or as components of a solution directly from our vendor partners and the remaining 46% from wholesale distributors. Purchases from wholesale distributors Tech Data, SYNNEX and Ingram Micro represented 11%, 9% and 9%, respectively, of our total purchases. Sales of products manufactured by Apple, Cisco, EMC, Hewlett-Packard, Lenovo and Microsoft, whether purchased directly from these vendor partners or from a wholesale distributor, represented in the aggregate 56% of our net sales in 2013. Sales of products manufactured by Hewlett-Packard and Cisco represented 20% and 14%, respectively, of our 2013 net sales.
Competition
The market for technology products and services is highly competitive. Competition is based on the ability to tailor specific solutions to customer needs, quality and breadth of product and service offerings, knowledge and expertise of sales force, customer service, price, product availability, speed of delivery and credit availability. Our competition includes:
• resellers such as Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, Softchoice, World Wide Technology and many smaller resellers;
• manufacturers who sell directly to customers, such as Dell, Hewlett-Packard and Apple; • large service providers and system integrators, such as IBM, Accenture, Hewlett-Packard and Dell; • e-tailers such as Amazon, Newegg, and TigerDirect.com; • cloud providers such as AT&T, Amazon Web Services and Box; and • retailers (including their e-commerce activities) such as Staples and Office Depot.
We expect the competitive landscape in which we compete to continue to change as new technologies are developed.
While innovation can help our business as it creates new offerings for us to sell, it can also disrupt our business model and create new and stronger competitors. For a discussion of the risks associated with competition, see “Risk Factors” included elsewhere in this report.
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9 Marketing
We market the CDW brand to both national and local audiences using a variety of channels that include online, broadcast, print, social and other media. This promotion is supported by integrated communication efforts that target decision- makers, influencers and the general public using a combination of news releases, case studies, media interviews and speaking opportunities. We also market to current and prospective customers through integrated marketing programs that include behaviorally targeted email, print, online media, events and sponsorships, as well as broadcast media.
As a result of our relationships with our vendor partners, a significant portion of our advertising and marketing expenses are reimbursed through cooperative advertising reimbursement programs. These programs are at the discretion of our vendor partners and are typically tied to sales or purchasing volumes or other commitments to be met by us within a specified period of time. We believe that our national scale and analytical techniques that measure the efficacy of our marketing programs differentiate us from our competitors.
Coworkers
As of December 31, 2013, we employed nearly 7,000 coworkers, none of whom is covered by collective bargaining agreements. We consider our coworker relations to be good.
Intellectual Property
The CDW trademark and certain variations thereon are registered or subject to pending trademark applications in the U.S., Canada and certain other jurisdictions. We believe our trademarks have significant value and are important factors in our marketing programs. In addition, we own registrations for domain names, including cdw.com and cdwg.com, for certain of our primary trademarks. We also have unregistered copyrights in our website content.
Sponsors
Madison Dearborn Partners, LLC is a leading private equity investment firm based in Chicago, Illinois that has raised over $18 billion of equity capital. Since its formation in 1992, it has invested in approximately 125 companies across a broad spectrum of industries, including basic industries, business and government services, consumer, financial and transaction services, healthcare and telecom, media and technology services. Madison Dearborn's objective is to invest in companies in partnership with outstanding management teams to achieve significant long-term appreciation in equity value.
Providence Equity Partners L.L.C. ("Providence") is a leading global private equity firm focused on media, communications, education and information investments. Providence manages funds with $39 billion of commitments and has invested in more than 130 companies over its 25-year history. Providence is headquartered in Providence, Rhode Island and has offices in New York, London, Hong Kong, Beijing and New Delhi. Providence's objective is to build extraordinary companies that will shape the future of the media, communications, education and information industries.
Item 1A. Risk Factors
There are many factors that affect our business and the results of operations, some of which are beyond our control. The following is a description of some important factors that may cause the actual results of operations in future periods to differ materially from those currently expected or desired.
Risks Related to Our Business
General economic conditions could negatively affect technology spending by our customers and put downward pressure on prices, which may have an adverse impact on our business, results of operations or cash flows.
Weak economic conditions generally, sustained uncertainty about global economic conditions, U.S. federal government spending cuts and the impact of new government programs, or a tightening of credit markets could cause our customers and potential customers to postpone or reduce spending on technology products or services or put downward pressure on prices, which could have an adverse effect on our business, results of operations or cash flows.
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10 Our financial performance could be adversely affected by decreases in spending on technology products and services by our Public segment customers.
Our sales to our Public segment customers are impacted by government spending policies, budget priorities and revenue levels. Although our sales to the federal government are diversified across multiple agencies and departments, they collectively accounted for approximately 7% of 2013 net sales. An adverse change in government spending policies (including ongoing budget cuts at the federal level), budget priorities or revenue levels could cause our Public segment customers to reduce their purchases or to terminate or not renew their contracts with us, which could adversely affect our business, results of operations or cash flows. For example, in 2013, as a result of sequestration and related budget uncertainty and the partial shutdown of the federal government for 16 days, we experienced significantly reduced Federal sales in our Public segment.
Our business depends on our vendor partner relationships and the availability of their products.
We purchase products for resale from vendor partners, which include OEMs and software publishers, and wholesale distributors. For the year ended December 31, 2013, we purchased approximately 54% of the products we sold directly from vendor partners and the remaining amount from wholesale distributors. We are authorized by vendor partners to sell all or some of their products via direct marketing activities. Our authorization with each vendor partner is subject to specific terms and conditions regarding such things as sales channel restrictions, product return privileges, price protection policies, purchase discounts and vendor partner programs and funding, including purchase rebates, sales volume rebates, purchasing incentives and cooperative advertising reimbursements. However, we do not have any long-term contracts with our vendor partners and many of these arrangements are terminable upon notice by either party. A reduction in vendor partner programs or funding or our failure to timely react to changes in vendor partner programs or funding could have an adverse effect on our business, results of operations or cash flows. In addition, a reduction in the amount of credit granted to us by our vendor partners could increase our need for, and the cost of, working capital and could have an adverse effect on our business, results of operations or cash flows, particularly given our substantial indebtedness.
From time to time, vendor partners may terminate or limit our right to sell some or all of their products or change the terms and conditions or reduce or discontinue the incentives that they offer us. For example, there is no assurance that, as our vendor partners continue to sell directly to end users and through resellers, they will not limit or curtail the availability of their products to solutions providers like us. Any such termination or limitation or the implementation of such changes could have a negative impact on our business, results of operations or cash flows.
Although we purchase from a diverse vendor base, in 2013, products we purchased from distributors Tech Data, SYNNEX and Ingram Micro represented 11%, 9% and 9%, respectively, of our total purchases. In addition, sales of Apple, Cisco, EMC, Hewlett-Packard, Lenovo and Microsoft products comprise a substantial portion of our sales, representing approximately 56% of net sales in 2013. Sales of products manufactured by Hewlett-Packard and Cisco represented approximately 20% and 14%, respectively, of our 2013 net sales. The loss of, or change in business relationship with, any of these or any other key vendor partners, the diminished availability of their products, or backlogs for their products leading to manufacturer allocation, could reduce the supply and increase the cost of products we sell and negatively impact our competitive position.
Additionally, the relocation of key distributors utilized in our purchasing model could increase our need for, and the cost of, working capital and have an adverse effect on our business, results of operations or cash flows. Further, the sale, spin- off or combination of any of our vendor partners and/or certain of their business units, including any such sale to or combination with a vendor with whom we do not currently have a commercial relationship or whose products we do not sell, could have an adverse impact on our business, results of operations or cash flows.
Our sales are dependent on continued innovations in hardware, software and services offerings by our vendor partners and the competitiveness of their offerings, and our ability to partner with new and emerging technology providers.
The technology industry is characterized by rapid innovation and the frequent introduction of new and enhanced hardware, software and services offerings, such as cloud-based solutions, including SaaS, IaaS and Platform as a Service ("PaaS"). We have been and will continue to be dependent on innovations in hardware, software and services offerings, as well as the acceptance of those innovations by customers. A decrease in the rate of innovation, or the lack of acceptance of innovations by customers, could have an adverse effect on our business, results of operations or cash flows.
In addition, if we are unable to keep up with changes in technology and new hardware, software and services offerings, for example by providing the appropriate training to our account managers, sales technology specialists and engineers to enable them to effectively sell and deliver such new offerings to customers, our business, results of operations or cash flows could be adversely affected.
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11 We also are dependent upon our vendor partners for the development and marketing of hardware, software and services to compete effectively with hardware, software and services of vendors whose products and services we do not currently offer or that we are not authorized to offer in one or more customer channels. In addition, our success is dependent on our ability to develop relationships with and sell hardware, software and services from new emerging vendors and vendors that we have not historically represented in the marketplace. To the extent that a vendor's offering that is highly in demand is not available to us for resale in one or more customer channels, and there is not a competitive offering from another vendor that we are authorized to sell in such customer channels, or we are unable to develop relationships with new technology providers or companies that we have not historically represented, our business, results of operations or cash flows could be adversely impacted.
Substantial competition could reduce our market share and significantly harm our financial performance.
Our current competition includes:
• resellers, such as Dimension Data, ePlus, Insight Enterprises, PC Connection, PCM, Presidio, Softchoice, World Wide Technology and many smaller resellers;
• manufacturers who sell directly to customers, such as Dell, Hewlett-Packard and Apple; • large service providers and system integrators, such as IBM, Accenture, Hewlett-Packard and Dell; • e-tailers, such as Amazon, Newegg and TigerDirect.com; • cloud providers, such as AT&T, Amazon Web Services and Box; and • retailers (including their e-commerce activities), such as Staples and Office Depot.
We expect the competitive landscape in which we compete to continue to change as new technologies are developed.
While innovation can help our business as it creates new offerings for us to sell, it can also disrupt our business model and create new and stronger competitors. For instance, technologies that deliver technology solutions as a service, such as cloud- based solutions, could increase the amount of sales directly to customers rather than through solutions providers like us, or could lead to a reduction in our profitability. In addition, some of our hardware and software vendor partners sell, and could intensify their efforts to sell, their products directly to our customers. Moreover, traditional OEMs have increased their services capabilities through mergers and acquisitions with service providers, which could potentially increase competition in the market to provide comprehensive technology solutions to customers. If any of these trends becomes more prevalent, it could adversely affect our business, results of operations or cash flows.
We focus on offering a high level of service to gain new customers and retain existing customers. To the extent we face increased competition to gain and retain customers, we may be required to reduce prices, increase advertising expenditures or take other actions which could adversely affect our business, results of operations or cash flows. Additionally, some of our competitors may reduce their prices in an attempt to stimulate sales, which may require us to reduce prices. This would require us to sell a greater number of products to achieve the same level of net sales and gross profit. If such a reduction in prices occurs and we are unable to attract new customers and sell increased quantities of products, our sales growth and profitability could be adversely affected.
The success of our business depends on the continuing development, maintenance and operation of our information technology systems.
Our success is dependent on the accuracy, proper utilization and continuing development of our information technology systems, including our business systems, such as our sales, customer management, financial and accounting, marketing, purchasing, warehouse management, e-commerce and mobile systems, as well as our operational platforms, including voice and data networks and power systems. The quality and our utilization of the information generated by our information technology systems, and our success in implementing new systems and upgrades, affects, among other things, our ability to:
• conduct business with our customers, including delivering services and solutions to them; • manage our inventory and accounts receivable;
• purchase, sell, ship and invoice our hardware and software products and provide and invoice our services efficiently and on a timely basis; and
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12 • maintain our cost-efficient operating model while scaling our business.
The integrity of our information technology systems is vulnerable to disruption due to forces beyond our control.
While we have taken steps to protect our information technology systems from a variety of threats, including computer viruses, malware, phishing, social engineering, unauthorized access and other malicious attacks, both internal and external, and human error, there can be no guarantee that those steps will be effective. Furthermore, although we have redundant systems at a separate location to back up our primary systems, there can be no assurance that these redundant systems will operate properly if and when required. Any disruption to or infiltration of our information technology systems could significantly harm our business and results of operations.
Breaches of data security could adversely impact our business.
Our business involves the storage and transmission of proprietary information and sensitive or confidential data, including personal information of coworkers, customers and others. In addition, we operate data centers for our customers which host their technology infrastructure and may store and transmit both business-critical data and confidential information.
In connection with our services business, our coworkers also have access to our customers' confidential data and other information. We have privacy and data security policies in place that are designed to prevent security breaches; however, as newer technologies evolve, we could be exposed to increased risk of breaches in security. Breaches in security could expose us, our customers or other individuals to a risk of public disclosure, loss or misuse of this information, resulting in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, as well as the loss of existing or potential customers and damage to our brand and reputation. In addition, the cost and operational consequences of implementing further data protection measures could be significant. Such breaches, costs and consequences could adversely affect our business, results of operations or cash flows.
The failure to comply with our Public segment contracts or applicable laws and regulations could result in, among other things, termination, fines or other liabilities, and changes in procurement regulations could adversely impact our business, results of operations or cash flows.
Revenues from our Public segment customers are derived from sales to governmental departments and agencies, educational institutions and healthcare customers, through various contracts and open market sales of products and services.
Sales to Public segment customers are highly regulated. Noncompliance with contract provisions, government procurement regulations or other applicable laws or regulations (including but not limited to the False Claims Act and the Medicare and Medicaid Anti-Kickback Statute) could result in civil, criminal and administrative liability, including substantial monetary fines or damages, termination of government contracts or other Public segment customer contracts, and suspension, debarment or ineligibility from doing business with the government and other customers in the Public segment. In addition, generally contracts in the Public segment are terminable at any time for convenience of the contracting agency or group purchasing organization (“GPO”) or upon default. Furthermore, our inability to enter into or retain contracts with GPOs may threaten our ability to sell to customers in those GPOs and compete. The effect of any of these possible actions could adversely affect our business, results of operations or cash flows. In addition, the adoption of new or modified procurement regulations and other requirements may increase our compliance costs and reduce our gross margins, which could have a negative effect on our business, results of operations or cash flows.
If we fail to provide high-quality services to our customers, or if our third-party service providers fail to provide high-quality services to our customers, our reputation, business, results of operations or cash flows could be adversely affected.
Our service offerings include field services, managed services, warranties, configuration services, partner services and telecom services. Additionally, we deliver and manage mission critical software, systems and network solutions for our customers. We also offer certain services, such as implementation and installation services and repair services, to our customers through various third-party service providers engaged to perform these services on our behalf. If we or our third-party service providers fail to provide high quality services to our customers or such services result in a disruption of our customers' businesses, this could, among other things, result in legal claims and proceedings and liability. Moreover, as we expand our services and solutions business, we may be exposed to additional operational, regulatory and other risks. We also could incur liability for failure to comply with the rules and regulations applicable to the new services and solutions we provide to our customers. If any of the foregoing were to occur, our reputation with our customers, our brand and our business, results of operations or cash flows could be adversely affected.
If we lose any of our key personnel, or are unable to attract and retain the talent required for our business, our business could be disrupted and our financial performance could suffer.
Our success is heavily dependent upon our ability to attract, develop, engage and retain key personnel to manage and grow our business, including our key executive, management, sales, services and technical coworkers.
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13 Our future success will depend to a significant extent on the efforts of Thomas E. Richards, our Chairman and Chief Executive Officer, as well as the continued service and support of our other executive officers. Our future success also will depend on our ability to retain our customer-facing coworkers, who have been given critical CDW knowledge regarding, and the opportunity to develop strong relationships with, many of our customers. In addition, as we seek to expand our offerings of value-added services and solutions, our success will even more heavily depend on attracting and retaining highly skilled technology specialists and engineers, for whom the market is extremely competitive.
Our inability to attract, develop and retain key personnel could have an adverse effect on our relationships with our vendor partners and customers and adversely affect our ability to expand our offerings of value-added services and solutions.
Moreover, our inability to train our sales, services and technical personnel effectively to meet the rapidly changing technology needs of our customers could cause a decrease in the overall quality and efficiency of such personnel. Such consequences could adversely affect our business, results of operations or cash flows.
The interruption of the flow of products from suppliers could disrupt our supply chain.
A significant portion of the products we sell are manufactured or purchased by our vendor partners outside of the U.S., primarily in Asia. Political, social or economic instability in Asia, or in other regions in which our vendor partners purchase or manufacture the products we sell, could cause disruptions in trade, including exports to the U.S. Other events that could also cause disruptions to our supply chain include:
• the imposition of additional trade law provisions or regulations; • the imposition of additional duties, tariffs and other charges on imports and exports; • foreign currency fluctuations;
• natural disasters or other adverse occurrences at, or affecting, any of our suppliers' facilities; • restrictions on the transfer of funds;
• the financial instability or bankruptcy of manufacturers; and • significant labor disputes, such as strikes.
We cannot predict whether the countries in which the products we sell are purchased or manufactured, or may be purchased or manufactured in the future, will be subject to new or additional trade restrictions or sanctions imposed by the U.S. or foreign governments, including the likelihood, type or effect of any such restrictions. Trade restrictions, including new or increased tariffs or quotas, embargoes, sanctions, safeguards and customs restrictions against the products we sell, as well as foreign labor strikes and work stoppages or boycotts, could increase the cost or reduce the supply of product available to us and adversely affect our business, results of operations or cash flows.
A natural disaster or other adverse occurrence at one of our primary facilities or customer data centers could damage our business.
Substantially all of our corporate, warehouse and distribution functions are located at our Vernon Hills, Illinois facilities and our second distribution center in North Las Vegas, Nevada. If the warehouse and distribution equipment at one of our distribution centers were to be seriously damaged by a natural disaster or other adverse occurrence, we could utilize the other distribution center or third-party distributors to ship products to our customers. However, this may not be sufficient to avoid interruptions in our service and may not enable us to meet all of the needs of our customers and would cause us to incur incremental operating costs. In addition, we operate three customer data centers and numerous sales offices which may contain both business-critical data and confidential information of our customers. A natural disaster or other adverse occurrence at any of the customer data centers or at any of our major sales offices could negatively impact our business, results of operations or cash flows.
We are heavily dependent on commercial delivery services.
We generally ship hardware products to our customers by FedEx, United Parcel Service and other commercial delivery services and invoice customers for delivery charges. If we are unable to pass on to our customers future increases in the cost of commercial delivery services, our profitability could be adversely affected. Additionally, strikes, inclement weather, natural disasters or other service interruptions by such shippers could adversely affect our ability to deliver products on a timely basis.
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14 We are exposed to accounts receivable and inventory risks.
We extend credit to our customers for a significant portion of our net sales, typically on 30-day payment terms. We are subject to the risk that our customers may not pay for the products they have purchased, or may pay at a slower rate than we have historically experienced, the risk of which is heightened during periods of economic downturn or uncertainty or, in the case of Public segment customers, during periods of budget constraints.
We are also exposed to inventory risks as a result of the rapid technological changes that affect the market and pricing for the products we sell. We seek to minimize our inventory exposure through a variety of inventory management procedures and policies, including our rapid-turn inventory model, as well as vendor price protection and product return programs.
However, if we were unable to maintain our rapid-turn inventory model, if there were unforeseen product developments that created more rapid obsolescence or if our vendor partners were to change their terms and conditions, our inventory risks could increase. We also from time to time take advantage of cost savings associated with certain opportunistic bulk inventory purchases offered by our vendor partners or we may decide to carry high inventory levels of certain products that have limited or no return privileges due to customer demand or request. These bulk purchases could increase our exposure to inventory obsolescence.
We could be exposed to additional risks if we make acquisitions or enter into alliances.
We may pursue transactions, including acquisitions or alliances, in an effort to extend or complement our existing business. These types of transactions involve numerous business risks, including finding suitable transaction partners and negotiating terms that are acceptable to us, the diversion of management's attention from other business concerns, extending our product or service offerings into areas in which we have limited experience, entering into new geographic markets, the potential loss of key coworkers or business relationships and successfully integrating acquired businesses, any of which could adversely affect our operations.
In addition, our financial results could be adversely affected by financial adjustments required by accounting principles generally accepted in the United States of America (“GAAP”) in connection with these types of transactions where significant goodwill or intangible assets are recorded. To the extent the value of goodwill or identifiable intangible assets with indefinite lives becomes impaired, we may be required to incur material charges relating to the impairment of those assets.
Our future operating results may fluctuate significantly.
We may experience significant variations in our future quarterly results of operations. These fluctuations may cause the market price of our common stock to be volatile and may result from many factors, including the condition of the technology industry in general, shifts in demand and pricing for hardware, software and services and the introduction of new products or upgrades.
Our operating results are also highly dependent on our level of gross profit as a percentage of net sales. Our gross profit percentage fluctuates due to numerous factors, some of which may be outside of our control, including general macroeconomic conditions; pricing pressures; changes in product costs from our vendor partners; the availability of price protection, purchase discounts and incentive programs from our vendor partners; changes in product, order size and customer mix; the risk of some items in our inventory becoming obsolete; increases in delivery costs that we cannot pass on to customers; and general market and competitive conditions.
In addition, our cost structure is based, in part, on anticipated sales and gross margins. Therefore, we may not be able to adjust our cost structure quickly enough to compensate for any unexpected sales or gross margin shortfall, and any such inability could have an adverse effect on our business, results of operations or cash flows.
We are exposed to risks from legal proceedings and audits.
We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, employment, tort and other litigation.
We are subject to intellectual property infringement claims against us in the ordinary course of our business, either because of the products and services we sell or the business systems and processes we use to sell such products and services, in the form of cease-and-desist letters, licensing inquiries, lawsuits and other communications and demands. In our industry, such intellectual property claims have become more frequent as the complexity of technological products and the intensity of competition in our industry have increased. Increasingly, many of these assertions are brought by non-practicing entities whose principal business model is to secure patent licensing revenue, but we may also be subject to suits from inventors, competitors or other patent holders who may seek licensing revenue, lost profits and/or an injunction preventing us from engaging in certain activities, including selling certain products and services.
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15 Because of our significant sales to governmental entities, we also are subject to audits by federal, state and local authorities. We also are subject to audits by various vendor partners and large customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts.
Current and future litigation, infringement claims, governmental proceedings, audits or indemnification claims that we face may result in substantial costs and expenses and significantly divert the attention of our management regardless of the outcome. In addition, current and future litigation, infringement claims, governmental proceedings, audits or indemnification claims could lead to increased costs or interruptions of our normal business operations. Litigation, infringement claims, governmental proceedings, audits or indemnification claims involve uncertainties and the eventual outcome of any litigation, infringement claim, governmental proceeding, audit or indemnification claim could adversely affect our business, results of operations or cash flows.
We have significant deferred cancellation of debt income.
As a result of a 2009 debt modification, we realized $395.5 million of cancellation of debt income (“CODI”). We made an election under Code Section 108(i) to defer this CODI from taxable income, pursuant to which we are also required to defer certain original issue discount (“OID”) deductions as they accrue. As of December 31, 2013, we had already deferred approximately $114.5 million of OID deductions. Starting in 2014, we will be required to include the deferred CODI into taxable income ratably over a five-year period ending in 2018. During this same period, we will also be permitted to benefit from our deferred OID deductions. Because we have more CODI than the aggregate of our deferred and unaccrued OID on the relevant remaining debt instruments, we will have a future cash tax liability associated with our significant deferred CODI. We have reflected the associated cash tax liability in our deferred taxes for financial accounting purposes.
All of our deferred CODI will be accelerated into current taxable income if, prior to 2018, we engage in a so-called “impairment transaction” and the gross value of our assets immediately afterward is less than 110% of the sum of our total liabilities and the tax on the net amount of our deferred CODI and OID (the “110% test”) as determined under the applicable Treasury Regulations. An “impairment transaction” is any transaction that impairs our ability to pay the tax on our deferred CODI, and includes dividends or distributions with respect to our equity and charitable contributions, in each case in a manner that is not consistent with our historical practice within the meaning of the applicable Treasury Regulations.
Prior to 2018, our willingness to pay dividends or make distributions with respect to our equity could be adversely affected if, at the time, we do not meet the 110% test and, as a result, the payment of a dividend or the making of a distribution would accelerate the tax payable with respect to our deferred CODI. We believe that, based on our interpretation of applicable Treasury Regulations, the gross value of our assets exceeds 110% of the sum of our total liabilities and the tax on the net amount of our deferred CODI and OID as of the filing date of this Annual Report on Form 10-K. However, we cannot assure you that this will continue to be true in the future.
Risks Related to Our Indebtedness
We have a substantial amount of indebtedness, which could have important consequences to our business.
We have a substantial amount of indebtedness. As of December 31, 2013, we had $3.3 billion of total long-term debt outstanding, as defined by GAAP, and $256.6 million of obligations outstanding under our inventory financing agreements, and the ability to borrow an additional $641.1 million under our senior secured asset-based revolving credit facility (the “Revolving Loan”). Our substantial indebtedness could have important consequences, including the following:
• making it more difficult for us to satisfy our obligations with respect to our indebtedness; • requiring us to dedicate a substantial portion of our cash flow from operations to debt service payments on our and our subsidiaries' debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes;
• requiring us to comply with restrictive covenants in our senior credit facilities and indentures, which limit the manner in which we conduct our business;
• making it more difficult for us to obtain vendor financing from our vendor partners; • limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate; • placing us at a competitive disadvantage compared to any of our less-leveraged competitors; Table of Contents
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16 • increasing our vulnerability to both general and industry-specific adverse economic conditions; and • limiting our ability to obtain additional debt or equity financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements and increasing our cost of borrowing.
Restrictive covenants under our senior credit facilities and indentures may adversely affect our operations and liquidity.
Our senior credit facilities and our indentures contain, and any future indebtedness of ours may contain, various covenants that limit our ability to, among other things:
• incur or guarantee additional debt;
• pay dividends or make distributions to holders of our capital stock or to make certain other restricted payments or investments;
• repurchase or redeem capital stock;
• make loans, capital expenditures or investments or acquisitions; • receive dividends or other payments from our subsidiaries; • enter into transactions with affiliates;
• create liens;
• merge or consolidate with other companies or transfer all or substantially all of our assets; • transfer or sell assets, including capital stock of subsidiaries; and • prepay, repurchase or redeem debt.
As a result of these covenants, we are limited in the manner in which we conduct our business and we may be unable to engage in favorable business activities or finance future operations or capital needs. A breach of any of these covenants or any of the other restrictive covenants would result in a default under our senior credit facilities. Upon the occurrence of an event of default under our senior credit facilities, the lenders:
• will not be required to lend any additional amounts to us; • could elect to declare all borrowings outstanding thereunder, together with accrued and unpaid interest and fees, to be due and payable;
• could require us to apply all of our available cash to repay these borrowings; or • could prevent us from making payments on our senior subordinated notes due 2017; • any of which could result in an event of default under the indentures.
If we were unable to repay those amounts, the lenders under our senior credit facilities could proceed against the collateral granted to them to secure our borrowings thereunder. We have pledged a significant portion of our assets as collateral under our senior credit facilities and our senior secured notes due 2018. If the lenders under our senior credit facilities or the holders of our senior secured notes due 2018 accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay our senior credit facilities and our other indebtedness or the ability to borrow sufficient funds to refinance such indebtedness. Even if we were able to obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us.
In addition, under our Revolving Loan, we are permitted to borrow an aggregate amount of up to $900 million; however, our ability to borrow under our Revolving Loan is limited by a borrowing base and a liquidity condition. The borrowing base at any time equals the sum of up to 85% of CDW LLC and its subsidiary guarantors’ eligible accounts receivable (net of accounts reserves) (up to 30% of such eligible accounts receivable which can consist of federal government accounts receivable) plus the lesser of (i) 70% of CDW LLC and its subsidiary guarantors’ eligible inventory (valued at cost and net of inventory reserves) and (ii) the product of 85% multiplied by the net orderly liquidation value percentage multiplied by eligible inventory (valued at cost and net of inventory reserves), less reserves (other than accounts reserves and inventory reserves). The borrowing base in effect as of December 31, 2013 was $1,065.5 million.
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17 Our ability to borrow under our Revolving Loan is also limited by a minimum liquidity condition, which provides that, if excess cash availability is less than the lesser of (i) $90 million or (ii) the greater of (A) 10% of the borrowing base or (B) $60 million, the lenders are not required to lend any additional amounts under our Revolving Loan unless the consolidated fixed charge coverage ratio (as defined in the credit agreement for our Revolving Loan) is at least 1.0 to 1.0. Moreover, our Revolving Loan provides discretion to the agent bank acting on behalf of the lenders to impose additional availability reserves, which could materially impair the amount of borrowings that would otherwise be available to us. We cannot assure you that the agent bank will not impose such reserves or, were it to do so, that the resulting impact of this action would not materially and adversely impair our liquidity.
We will be required to generate sufficient cash to service our indebtedness and, if not successful, we may be forced to take other actions to satisfy our obligations under our indebtedness.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. Our outstanding long-term debt will impose significant cash interest payment obligations on us in 2014 and subsequent years and, accordingly, we will have to generate significant cash flow from operating activities to fund our debt service obligations. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources” included elsewhere in this report.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional debt or equity capital, restructure or refinance our indebtedness, or revise or delay our strategic plan. We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or satisfy our capital requirements, or that these actions would be permitted under the terms of our existing or future debt agreements, including our senior credit facilities and indentures. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our senior credit facilities and indentures restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds which we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due. Furthermore, the Sponsors have no obligation to provide us with debt or equity financing.
If we cannot make scheduled payments on our debt, we will be in default and, as a result:
• our debt holders could declare all outstanding principal and interest to be due and payable; • the lenders under our senior credit facilities could foreclose against the assets securing the borrowings from them and the lenders under our term loan facility could terminate their commitments to lend us money; and • we could be forced into bankruptcy or liquidation.
Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more debt, including secured debt. This could further increase the risks associated with our leverage.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of our senior credit facilities and indentures do not fully prohibit us or our subsidiaries from doing so. To the extent that we incur additional indebtedness or such other obligations, the risks associated with our substantial indebtedness described above, including our possible inability to service our debt, will increase. As of December 31, 2013, we had approximately $641.1 million available for additional borrowing under our Revolving Loan after taking into account borrowing base limitations (net of $2.2 million of issued and undrawn letters of credit and $256.7 million of reserves related to our floorplan sub-facility).
Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Certain of our borrowings, primarily borrowings under our senior credit facilities, are at variable rates of interest and expose us to interest rate risk. As of December 31, 2013, we had $1,528.9 million of variable rate debt outstanding. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease. Although we have entered into interest rate cap agreements on our term loan facility to reduce interest rate volatility, we cannot assure you we will be able to do so in the future on acceptable terms or that such caps or the caps we have in place now will be effective.
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18 Risks Related to Ownership of Our Common Stock
Our common stock price may be volatile and may decline regardless of our operating performance, and holders of our common stock could lose a significant portion of their investment.
The market price for our common stock may be volatile. Our stockholders may not be able to resell their shares of common stock at or above the price at which they purchased such shares, due to fluctuations in the market price of our common stock, which may be caused by a number of factors, many of which we cannot control, including the risk factors described in this Annual Report on Form 10-K and the following:
• changes in financial estimates by any securities analysts who follow our common stock, our failure to meet these estimates or failure of securities analysts to initiate or maintain coverage of our common stock; • downgrades by any securities analysts who follow our common stock; • future sales of our common stock by our officers, directors and significant stockholders, including the Sponsors; • market conditions or trends in our industry or the economy as a whole; • investors’ perceptions of our prospects;
• announcements by us or our competitors of significant contracts, acquisitions, joint ventures or capital commitments; • changes in key personnel; and
• our limited public float in light of the Sponsors’ beneficial ownership of a majority of our common stock, which may result in the trading of relatively small quantities of shares by our stockholders having a disproportionate positive or negative influence on the market price of our common stock.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies, including companies in our industry. In the past, securities class action litigation has followed periods of market volatility. If we were involved in securities litigation, we could incur substantial costs, and our resources and the attention of management could be diverted from our business.
The Sponsors have the ability to control significant corporate activities and their interests may not align with yours.
The Sponsors beneficially own approximately 63.7% of our common stock as of February 28, 2014. As a result of their ownership, the Sponsors, so long as they hold a majority of our outstanding common stock, will have the ability to control the outcome of matters submitted to a vote of stockholders and, through our board of directors, the ability to control decision- making with respect to our business direction and policies. Matters over which the Sponsors will, directly or indirectly, exercise control include:
• the election of our board of directors and the appointment and removal of our officers; • mergers and other business combination transactions, including proposed transactions that would result in our stockholders receiving a premium price for their shares; • other acquisitions or dispositions of businesses or assets; • incurrence of indebtedness and the issuance of equity securities; • repurchase of stock and payment of dividends; and
• the issuance of shares to management under our equity incentive plans.
Even if the Sponsors’ ownership of our shares falls below a majority, they may continue to be able to strongly influence or effectively control our decisions. Under our amended and restated certificate of incorporation, the Sponsors and their affiliates do not have any obligation to present to us, and the Sponsors may separately pursue, corporate opportunities of which they become aware, even if those opportunities are ones that we would have pursued if granted the opportunity.
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19 Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.
Sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. As of February 28, 2014, there were 171,954,277 shares of our common stock outstanding. The shares of our common stock sold in our initial public offering and secondary offering in 2013 are freely tradable without restriction under the Securities Act of 1933, as amended (the “Securities Act”), except that any shares of our common stock that may be acquired by our directors, executive officers and other affiliates may be sold only in compliance with certain volume limitations and other restrictions of Rule 144 of the Securities Act.
The remaining shares of our common stock, to the extent not previously sold pursuant to an exemption from registration, will continue to be “restricted shares” within the meaning of Rule 144 of the Securities Act and subject to certain restrictions on resale. Restricted shares may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144 or Rule 701 under the Securities Act.
As of February 28, 2014, approximately 119,000,000 shares of our common stock will continue to have the right to require us to register the sales of their shares under the Securities Act, under the terms of an agreement between us and the holders of these securities.
In the future, we may also issue our securities in connection with investments or acquisitions. The number of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then- outstanding shares of our common stock.
Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of the Company more difficult without the approval of our board of directors. These provisions:
• authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock; • establish a classified board of directors so that not all members of our board of directors are elected at one time; • generally prohibit stockholder action by written consent, requiring all stockholder actions be taken at a meeting of our stockholders, except that any action required or permitted to be taken by our stockholders may be effected by written consent until such time as the Sponsors cease to beneficially own 50% or more of our common stock; • provide that special meetings of the stockholders can only be called by or at the direction of (i) our board of directors pursuant to a written resolution adopted by the affirmative vote of the majority of the total number of directors that the Company would have if there were no vacancies or (ii) until such time as the Sponsors cease to beneficially own 50% or more of our common stock (a) the chairman or vice chairman of our board of directors, (b) our chief executive officer, (c) a majority of our board of directors through a special resolution or (d) the holders of at least 10% of our common stock;
• establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and • provide that our board of directors is expressly authorized to make, alter or repeal our amended and restated bylaws.
Our amended and restated certificate of incorporation also contains a provision that provides us with protections similar to Section 203 of the Delaware General Corporation Law, and will prevent us from engaging in a business combination with a person who acquires at least 15% of our common stock for a period of three years from the date such person acquired such common stock, unless board or stockholder approval is obtained prior to the acquisition. These anti-takeover provisions and other provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of the Company, even if doing so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for our stockholders to elect directors of their choosing and to cause us to take other corporate actions our stockholders desire.
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20 Conflicts of interest may arise because some of our directors are principals of our largest stockholders.
Paul Finnegan and Robin Selati, who are principals of Madison Dearborn, and Glenn Creamer and Michael Dominguez, who are managing directors of Providence Equity, serve on our board of directors. As of February 28, 2014, the Sponsors continue to hold a majority of our outstanding common stock. The Sponsors and the entities respectively controlled by them may hold equity interests in entities that directly or indirectly compete with us, and companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts arise between the interests of Madison Dearborn or Providence Equity, on the one hand, and of other stockholders, on the other hand, these directors may not be disinterested. Although our directors and officers have a duty of loyalty to us under Delaware law and our amended and restated certificate of incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (1) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our board of directors and a majority of our disinterested directors approves the transaction, (2) the material facts relating to the director’s or officer’s relationship or interest as to the transaction are disclosed to our stockholders and a majority of our disinterested stockholders approve the transaction or (3) the transaction is otherwise fair to us. Our amended and restated certificate of incorporation also provides that any principal, officer, member, manager and/or employee of a Sponsor or any entity that controls, is controlled by or under common control with a Sponsor (other than us or any company that is controlled by us) or a Sponsor-managed investment fund will not be required to offer any transaction opportunity of which they become aware to us and could take any such opportunity for themselves or offer it to other companies in which they have an investment, unless such opportunity is offered to them solely in their capacities as our directors.
We cannot assure you that we will continue to pay dividends on our common stock, and our indebtedness and certain tax considerations could limit our ability to continue to pay dividends on our common stock. If we do not continue to pay dividends, you may not receive any return on investment unless you are able to sell your common stock for a price greater than your purchase price.
In each of the fourth quarter of 2013 and the first quarter of 2014, our board of directors declared a quarterly cash dividend of $0.0425 per share of common stock. We expect to continue to pay a cash dividend on our common stock of $0.0425 per share per quarter, or $0.17 per share per annum. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, including those under our senior credit facilities and indentures, any potential indebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors our board of directors deems relevant. There can be no assurance that we will continue to pay a dividend at the current rate or at all. Accordingly, if we do not pay dividends in the future, realization of a gain on your investment will depend entirely on the appreciation of the price of our common stock, which may never occur. See “-Risks Related to Our Business-We have significant deferred cancellation of debt income” for a discussion of certain tax considerations that could affect our willingness to pay dividends in the future.
We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our obligations.
We are a holding company that does not conduct any business operations of our own. As a result, we are largely dependent upon cash dividends and distributions and other transfers from our subsidiaries to meet our obligations. The agreements governing the indebtedness of our subsidiaries impose restrictions on our subsidiaries’ ability to pay dividends or other distributions to us. The deterioration of the earnings from, or other available assets of, our subsidiaries for any reason could also limit or impair their ability to pay dividends or other distributions to us.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
As of December 31, 2013, we owned or leased a total of approximately 2.0 million square feet of space throughout the U.S. and Canada. We own two properties: a combined office and an approximately 450,000 square foot distribution center in Vernon Hills, Illinois, and an approximately 513,000 square foot distribution center in North Las Vegas, Nevada. In addition, we conduct sales, services and administrative activities in various leased locations throughout the U.S. and Canada, including data centers in Madison, Wisconsin and Minneapolis, Minnesota.
We believe that our facilities are well maintained, suitable for our business and occupy sufficient space to meet our operating needs. As part of our normal business, we regularly evaluate sales center performance and site suitability. Leases Table of Contents
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21 covering our currently occupied leased properties expire at varying dates, generally within the next ten years. We anticipate no difficulty in retaining occupancy through lease renewals, month-to-month occupancy or replacing the leased properties with equivalent properties. We believe that suitable additional or substitute leased properties will be available as required.
Item 3. Legal Proceedings
We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, intellectual property, employment, tort and other litigation matters. We are also subject to audit by federal, state and local authorities, and by various partners and large customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts. From time to time, certain of our customers file voluntary petitions for reorganization or liquidation under the U.S. bankruptcy laws. In such cases, certain pre-petition payments received by us could be considered preference items and subject to return to the bankruptcy administrator.
As of December 31, 2013, we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, our financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.
We previously filed a claim as part of a class action settlement in a case alleging price fixing during the period of January 1, 1996 through December 31, 2006, by certain manufacturers of thin-film liquid crystal display panels. On July 13, 2013, the United Stated District Court for the Northern District of California approved distribution of the settlement proceeds, including a net payment to us of $10.4 million after fees and expenses. We have recognized a pre-tax benefit of $10.4 million within selling and administrative expenses in the consolidated statement of operations for the year ended December 31, 2013.
The first of two settlement payments was received by us on July 29, 2013 in the amount of $8.5 million. The balance of $1.9 million was received in February 2014.
Item 4. Mine Safety Disclosures
Not applicable.
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22 Executive Officers
Name Age Position
Thomas E. Richards 59 Chairman, President and Chief Executive Officer, and Director Dennis G. Berger 49 Senior Vice President and Chief Coworker Services Officer Neal J. Campbell 52 Senior Vice President and Chief Marketing Officer Christina M. Corley 46 Senior Vice President - Corporate Sales Douglas E. Eckrote 49 Senior Vice President - Strategic Solutions and Services Christine A. Leahy 49 Senior Vice President, General Counsel and Corporate Secretary Christina V. Rother 50 Senior Vice President - Public and Advanced Technology Sales Jonathan J. Stevens 44 Senior Vice President - Operations and Chief Information Officer Matthew A. Troka 43 Senior Vice President - Product and Partner Management Ann E. Ziegler 55 Senior Vice President and Chief Financial Officer Thomas E. Richards serves as our Chairman, President and Chief Executive Officer, as a member of our board of directors and as a manager of CDW LLC. From October 2011 to December 31, 2012, Mr. Richards served as our Chief Executive Officer. From September 2009 to October 2011, Mr. Richards served as our President and Chief Operating Officer.
Prior to joining CDW, Mr. Richards held leadership positions with Qwest Communications, a telecommunications carrier. From 2008 to 2009, he served as Executive Vice President and Chief Operating Officer, where he was responsible for the day-to-day operation and performance of Qwest Communications, and before assuming that role, was the Executive Vice President of the Business Markets Group from 2005 to 2008. Mr. Richards also has served as Chairman and Chief Executive Officer of Clear Communications Corporation and as Executive Vice President of Ameritech Corporation. He currently serves as a board member of Junior Achievement of Chicago, Rush University Medical Center and the University of Pittsburgh. Mr. Richards is also a member of the Economic Club of Chicago and the Executives’ Club of Chicago. Mr. Richards is a graduate of the University of Pittsburgh where he earned a bachelor’s degree and a graduate of Massachusetts Institute of Technology where he earned a Master of Science in Management as a Sloan Fellow. As a result of these and other professional experiences, Mr. Richards possesses particular knowledge and experience in technology industries, strategic planning and leadership of complex organizations that strengthen the board’s collective qualifications, skills and experience.
Dennis G. Berger serves as our Senior Vice President and Chief Coworker Services Officer. Mr. Berger joined CDW in September 2005 as Vice President-Coworker Services. In January 2007, he was named Senior Vice President and Chief Coworker Services Officer. Mr. Berger is responsible for leading CDW’s programs in coworker learning and development, benefits, compensation, performance management, coworker relations and talent acquisition. Prior to joining CDW, he served as Vice President of Human Resources at PepsiAmericas, a beverage company, from 2002 to 2005. Mr. Berger has also held human resources positions of increasing responsibility at Pepsi Bottling Group, Inc., Pepsico, Inc. and GTE Corporation.
Mr. Berger serves on the board of directors of Glenwood Academy, Anti-Defamation League of Chicago and Skills for Chicagoland’s Future. Mr. Berger is a graduate of Northeastern University where he earned a bachelor’s degree and a graduate of John M. Olin School of Business at Washington University in St. Louis where he earned a Master of Business Administration.
Neal J. Campbell serves as our Senior Vice President and Chief Marketing Officer. Mr. Campbell joined CDW in January 2011, and is responsible for the strategy and development of CDW’s advertising, public relations, channel marketing, marketing intelligence and research, merchandising, microsites, creative services and direct marketing content, along with relationship marketing, corporate communications and e-commerce initiatives including content development, online marketing and e-procurement. Prior to joining CDW, Mr. Campbell served as Chief Executive Officer of TrafficCast, a provider of real- time and predictive traffic information to Google, Yahoo and others from 2008 to 2011. From 2006 to 2008, he served as Executive Vice President and General Manager-Strategic Marketing and Next Generation Products for ISCO International, a manufacturer of wireless telecommunications components. Mr. Campbell also spent 17 years with Motorola, most recently as Vice President and General Manager, GSM Portfolio Marketing and Planning for the company’s mobile device business. He currently serves as a board member of TrafficCast and Junior Achievement of Chicago, and is on the Executive Advisory Council of Bradley University. Mr. Campbell is a graduate of Bradley University where he earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where he earned a Master of Business Administration.
Christina M. Corley serves as our Senior Vice President of Corporate Sales and is responsible for managing all aspects of our corporate sales force, including sales force strategy, structure, goals, operations, revenue generation and training and development. Prior to joining CDW in September 2011, Ms. Corley served as President and Chief Operating Officer of Zones, Inc., a provider of IT products and solutions, from 2006 to 2011. She served as Executive Vice President of Purchasing Table of Contents
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23 and Operations for Zones, Inc. from April 2005 to October 2006. She served as President of Corporate PC Source (“CPCS”), a wholly owned subsidiary of Zones, Inc., from March 2003 to April 2005. Prior to its acquisition by Zones, Inc., Ms. Corley served as Chief Executive Officer of CPCS from 1999 to 2003. Ms. Corley began her career in sales and marketing, holding various positions at IBM, Dataflex and VisionTek. She currently serves as a board member of the Boys and Girls Club of Chicago. Ms. Corley is a graduate of the University of Illinois at Urbana-Champaign where she earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where she earned a Master of Business Administration in management and strategy.
Douglas E. Eckrote serves as our Senior Vice President of Strategic Solutions and Services and is responsible for our technology specialist teams focusing on servers and storage, unified communications, security, wireless, power and cooling, networking, software licensing and mobility solutions. He also holds responsibility for CDW Canada, Inc. Mr. Eckrote joined CDW in 1989 as an account manager. Mr. Eckrote was appointed Director of Operations in 1996, Vice President of Operations in 1999 and Senior Vice President of Purchasing in April 2001. In October 2001, he was named Senior Vice President of Purchasing and Operations. He was named Senior Vice President of Operations, Services and Canada in 2006 and assumed his current role in 2009. Prior to joining CDW, Eckrote worked in outside sales for Arrow Electronics and Cintas Uniform Company. From 2003 to 2009, Mr. Eckrote served on the board of directors of the Make-A-Wish Foundation of Illinois, completing the last two years as board chair, and currently serves on the Make-A-Wish Foundation of America National Chapter Performance Committee. Mr. Eckrote also served on the board of directors of the Center for Enriched Living from 2002-2011, serving as Vice President from 2004-2005, President from 2006-2008, board emeritus from 2009-2011 and currently serves as a trustee. Mr. Eckrote is a graduate of Purdue University where he earned a bachelor’s degree and a graduate of Northwestern University’s Kellogg School of Management where he earned an Executive Master of Business Administration.
Christine A. Leahy serves as our Senior Vice President, General Counsel and Corporate Secretary and is responsible for our legal, corporate governance, enterprise risk management and compliance functions. Ms. Leahy joined CDW in January 2002 as Vice President, General Counsel and Corporate Secretary. In January of 2007, she was named Senior Vice President.
Before joining CDW, Ms. Leahy served as a corporate partner in the Chicago office of Sidley Austin LLP where she specialized in corporate governance, securities law, mergers and acquisitions and strategic counseling. Ms. Leahy serves on the board of trustees of Children’s Home and Aid. Ms. Leahy is a graduate of Brown University where she earned a bachelor’s degree and a graduate of Boston College Law School where she earned her Juris Doctor. She also completed the CEO Perspective and Women’s Director Development Programs at Northwestern University’s Kellogg School of Management.
Christina V. Rother serves as our Senior Vice President of Public and Advanced Technology Sales and is responsible for managing all aspects of our public sector and advanced technology sales forces, including sales force strategy, structure, goals, operations, revenue generation and training and development. Ms. Rother joined CDW in 1991 as an account manager.
In 2002, she was appointed Vice President for Education and State and Local Sales. In 2005, she was chosen to lead our newly formed healthcare sales team. Beginning in 2006, Ms. Rother has held various positions ranging from Group Vice President of CDW Government LLC, President of CDW Government LLC and Senior Vice President of Sales. In September 2011, Ms. Rother assumed her current role as Senior Vice President of Public and Advanced Technology Sales. Prior to joining CDW, Ms. Rother held a number of sales positions with technology companies including Laser Computers and Price Electronics.
Ms. Rother currently serves as chair of the board of directors of the Make-A-Wish Foundation of Illinois. Ms. Rother is a graduate of the University of Illinois at Chicago where she earned a bachelor’s degree.
Jonathan J. Stevens serves as our Senior Vice President of Operations and Chief Information Officer. Mr. Stevens joined CDW in June 2001 as Vice President-Information Technology, was named Chief Information Officer in January 2002 and Vice President-International and Chief Information Officer from 2005 until December 2006. In January 2007, he was named Senior Vice President and Chief Information Officer and assumed his current role in November 2009. Mr. Stevens is responsible for the strategic direction of our information technology. Additionally, he holds responsibility for our distribution centers, transportation, facilities, customer relations, operational excellence and the business technology center. Prior to joining CDW, Mr. Stevens served as regional technology director for Avanade, an international technology integration company formed through a joint venture between Microsoft and Accenture from 2000 to 2001. Prior to that, Mr. Stevens was a principal with Microsoft Consulting Services and led an information technology group for a corporate division of AT&T/NCR. He currently serves on the board of directors of SingleWire Software, LLC and Northeast Illinois Council: Boy Scouts of America.
Mr. Stevens is a graduate of the University of Dayton where he earned a bachelor’s degree.
Matthew A. Troka serves as our Senior Vice President of Product and Partner Management. Mr. Troka is responsible for managing our relationships with all of our vendor partners. In addition, he directs the day-to-day operations of our purchasing department. Mr. Troka joined CDW in 1992 as an account manager and became a sales manager in 1995. From 1998 to 2001, he served as Corporate Sales Director. From 2001 to 2004, Mr. Troka was Senior Director of Purchasing. From 2004 to 2006, Mr. Troka served as Vice President of Purchasing. From 2006 to 2011, Mr. Troka was Vice President of Product and Partner Management. On March 3, 2011, Mr. Troka was elected Senior Vice President of Product and Partner Management.
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24 Mr. Troka serves as a member of the board of directors of Encompass Championship Charities. Mr. Troka is a graduate of the University of Illinois where he earned a bachelor’s degree.
Ann E. Ziegler joined CDW in April 2008 as Senior Vice President and Chief Financial Officer. Prior to joining CDW, Ms. Ziegler spent 15 years at Sara Lee Corporation (“Sara Lee”), a global consumer goods company, in a number of executive roles including finance, mergers and acquisitions, strategy and general management positions in both U.S. and international businesses. Most recently, from 2005 until April 2008, Ms. Ziegler served as Chief Financial Officer and Senior Vice President of Administration for Sara Lee Food and Beverage. Prior to joining Sara Lee, Ms. Ziegler was a corporate attorney at Skadden, Arps, Slate, Meagher & Flom. Ms. Ziegler serves on the board of directors of Hanesbrands, Inc. During the previous five years, Ms. Ziegler also served on the board of directors of Unitrin, Inc. Ms. Ziegler is a graduate of The College of William and Mary where she earned a bachelor’s degree and a graduate of the University of Chicago Law School where she earned her Juris Doctor.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock has been listed on the NASDAQ Global Select Market since June 27, 2013 under the symbol “CDW.” Prior to that date, there was no public market for our common stock. Shares sold in our initial public offering ("IPO") were priced at $17.00 per share on June 26, 2013. The following table sets forth the ranges of high and low sales prices per share of our common stock as reported on the NASDAQ Global Select Market for the periods indicated.
Year ended December 31, 2013 High Low
Second quarter (beginning June 27, 2013)....................................................................................................... $ 19.17 $ 17.38 Third quarter..................................................................................................................................................... $ 24.51 $ 18.26 Fourth quarter................................................................................................................................................... $ 23.56 $ 20.50 Holders
As of February 28, 2014, there were 143 holders of record of our common stock. The number of beneficial stockholders is substantially greater than the number of holders of record because a portion of our common stock is held through brokerage firms.
Dividends
We expect to continue to pay a quarterly cash dividend on our common stock of $0.0425 per share, or $0.17 per annum. The initial quarterly cash dividend of $0.0425 per share was paid on December 2, 2013 to all common stockholders of record as of the close of business on November 15, 2013. On February 13, 2014, we announced that our board of directors declared a quarterly cash dividend on our common stock of $0.0425 per share. The dividend will be paid on March 10, 2014 to all stockholders of record as of the close of business on February 25, 2014. The payment of dividends in quarters beyond the first quarter of 2014 remains at the discretion of our board of directors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, any potential indebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors that our board of directors deems relevant. In addition, our ability to pay dividends on our common stock will be limited by restrictions on our ability to pay dividends or make distributions to our stockholders and on the ability of our subsidiaries to pay dividends or make distributions to us, in each case, under the terms of our current and any future agreements governing our indebtedness. For a discussion of our cash resources and needs and restrictions on our ability to pay dividends, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included elsewhere in this report. For additional discussion of restrictions on our ability to pay dividends, see Note 7 "Long-Term Debt", to the accompanying audited consolidated financial statements included elsewhere in this report.
Stock Performance Graph
The information contained in this Stock Performance Graph section shall not be deemed to be "soliciting material" or "filed" or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that CDW specifically incorporates it by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.
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25 The following graph compares the cumulative total shareholder return, calculated on a dividend reinvested basis, on $100.00 invested at the opening of the market on June 27, 2013, the date our common stock first traded on the NASDAQ Global Select Market, through and including the market close on December 31, 2013, with the cumulative total return for the same time period of the same amount invested in the S&P MidCap 400 index and a peer group index. The Company's peer group index for 2013 consists of the following companies: Accenture plc, Anixter International, Inc., Arrow Electronics, Inc., Avnet, Inc., CGI Group Inc., Genuine Parts Company, Henry Schein, Inc., Insight Enterprises, Inc., Owens & Minor, Inc., Patterson Companies, Inc., SYNNEX Corporation, United Stationers Inc., W.W. Grainger, Inc. and Wesco International, Inc.
This peer group was selected based on a review of publicly available information about these companies and the Company’s determination that they met one or more of the following criteria: (i) similar size in terms of revenue and/or enterprise value (one-third to three times the Company’s revenue or enterprise value); (ii) operates in a business-to-business distribution environment; (iii) members of the technology industry; (iv) similar customers (i.e., business, government, healthcare, and education); (v) companies that provide services and/or solutions; and (vi) similar EBITDA and gross margins.
Shareholder returns over the indicated period are based on historical data and should not be considered indicative of future shareholder returns.
June 27, 2013 December 31, 2013
CDW Corp $ 100 $ 138
S&P MidCap 400 index 100 118
CDW Peers 100 113
Use of Proceeds from Registered Securities
On July 2, 2013, the Company completed an IPO of its common stock in which it issued and sold 23,250,000 shares of common stock. On July 31, 2013, the Company completed the sale of an additional 3,487,500 shares of common stock to the underwriters of the IPO pursuant to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO. Such shares were registered under the Securities Act of 1933, as amended, pursuant to the Company's Registration Statement on Form S-1 (File 333-187472), which was declared effective by the SEC on June 26, 2013.
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26 The shares of common stock are listed on the NASDAQ Global Select Market under the symbol “CDW.” The Company's shares of common stock were sold to the underwriters at a price of $17.00 per share in the IPO and upon the exercise of the overallotment option, which together, generated aggregate net proceeds of $424.7 million to the Company after deducting $29.8 million in underwriting discounts, expenses and transaction costs. Using a portion of the net proceeds from the IPO (exclusive of proceeds from the exercise of the overallotment option), the Company paid a $24.4 million termination fee to affiliates of Madison Dearborn Partners, LLC and Providence Equity Partners, L.L.C. in connection with the termination of the management services agreement with such entities that was effective upon completion of the IPO, redeemed $175.0 million aggregate principal amount of senior secured notes due 2018, and redeemed $146.0 million aggregate principal amount of senior subordinated notes due 2017. The redemption price of the senior secured notes due 2018 was 108.0% of the principal amount redeemed, plus accrued and unpaid interest to the date of redemption. The Company used cash on hand to pay such accrued and unpaid interest. The redemption price of the senior subordinated notes due 2017 was 106.268% of the principal amount redeemed, plus accrued and unpaid interest to the date of redemption. The Company used cash on hand to pay such accrued and unpaid interest. On October 18, 2013, proceeds from the overallotment option exercise of $56.0 million and cash on hand were used to redeem $155.0 million aggregate principal amount of senior subordinated notes due 2017. The redemption price of the senior subordinated notes due 2017 was 104.178% of the principal amount redeemed, plus accrued and unpaid interest to the date of redemption. The Company used cash on hand to pay such redemption premium and accrued and unpaid interest.
J.P. Morgan Securities LLC, Barclays Capital Inc. and Goldman, Sachs & Co. acted as joint book-running managers of the IPO and as representatives of the underwriters. Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC acted as additional book-running managers in the IPO. Robert W. Baird & Co. Incorporated, Raymond James & Associates, Inc., William Blair & Company, L.L.C., Needham & Company, LLC, Stifel, Nicolaus & Company, Incorporated, Loop Capital Markets LLC and The Williams Capital Group, L.P. acted as managing underwriters in the IPO.
Item 6. Selected Financial Data
The selected financial data set forth below are not necessarily indicative of the results of future operations and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and the related notes included elsewhere in this report.
We have derived the selected financial data presented below as of December 31, 2013 and December 31, 2012 and for the years ended December 31, 2013, 2012, and 2011 from our audited consolidated financial statements and related notes, which are included elsewhere in this report. The selected financial data as of December 31, 2010 and December 31, 2009 have been derived from our audited consolidated financial statements as of and for those periods, which are not included in this report.
The following are some of the items affecting comparability of the selected financial data for the periods presented:
• During the year ended December 31, 2013, we recorded IPO- and secondary-offering related expenses of $75.0 million.
• During the years ended December 31, 2013, 2012, and 2011, we recorded net losses on extinguishments of long-term debt of $64.0 million, $17.2 million, and $118.9 million, respectively. The losses represented the difference between the amount paid upon extinguishment, including call premiums and expenses paid to the debt holders and agents, and the net carrying amount of the extinguished debt, adjusted for a portion of the unamortized deferred financing costs.
• During the year ended December 31, 2009, we recorded goodwill impairment charges of $241.8 million. This impairment was primarily attributable to deterioration in macroeconomic conditions and overall declines in net sales.
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27 Years Ended December 31,
(dollars and shares in millions, except per share amounts) 2013 2012 2011 2010 2009 Statement of Operations Data:
Net sales $ 10,768.6 $ 10,128.2 $ 9,602.4 $ 8,801.2 $ 7,162.6 Cost of sales 9,008.3 8,458.6 8,018.9 7,410.4 6,029.7
Gross profit 1,760.3 1,669.6 1,583.5 1,390.8 1,132.9
Selling and administrative expenses 1,120.9 1,029.5 990.1 932.1 821.1 Advertising expense 130.8 129.5 122.7 106.0 101.9
Goodwill impairment — — — — 241.8
Income (loss) from operations 508.6 510.6 470.7 352.7 (31.9) Interest expense, net (250.1) (307.4) (324.2) (391.9) (431.7) Net (loss) gain on extinguishments of long-term debt (64.0) (17.2) (118.9) 2.0 — Other income, net 1.0 0.1 0.7 0.2 2.4
Income (loss) before income taxes 195.5 186.1 28.3 (37.0) (461.2) Income tax (expense) benefit (62.7) (67.1) (11.2) 7.8 87.8 Net income (loss) $ 132.8 $ 119.0 $ 17.1 $ (29.2) $ (373.4) Net income (loss) per common share:
Basic $0.85 $0.82 $0.12 $(0.20) $(2.60)
Diluted $0.84 $0.82 $0.12 $(0.20) $(2.60)
Weighted-average common shares outstanding:
Basic 156.6 145.1 144.8 144.4 143.8
Diluted 158.7 145.8 144.9 144.4 143.8
Balance Sheet Data (at period end):
Cash and cash equivalents $ 188.1 $ 37.9 $ 99.9 $ 36.6 $ 88.0 Working capital 810.9 666.5 538.1 675.4 923.2
Total assets 5,924.6 5,720.0 5,967.7 5,943.8 5,976.0
Total debt and capitalized lease obligations (1) 3,251.2 3,771.0 4,066.0 4,290.0 4,621.9 Total shareholders’ equity (deficit) 711.7 136.5 (7.3) (43.5) (44.7) Other Financial Data:
Capital expenditures $ 47.1 $ 41.4 $ 45.7 $ 41.5 $ 15.6 Depreciation and amortization 208.2 210.2 204.9 209.4 218.2 Gross profit as a percentage of net sales 16.3% 16.5% 16.5% 15.8% 15.8% Ratio of earnings to fixed charges (2) 1.8 1.6 1.1 (a) (a) EBITDA (3) $ 653.8 $ 703.7 $ 557.4 $ 564.3 $ 188.7
Adjusted EBITDA (3) 808.5 766.6 717.3 601.8 465.4
Non-GAAP net income (loss) (4) 314.3 247.1 198.8 85.7 (14.5) Statement of Cash Flows Data:
Net cash provided by (used in):
Operating activities $ 366.3 $ 317.4 $ 214.7 $ 423.7 $ 107.6 Investing activities (47.1) (41.7) (56.0) (125.4) (82.6) Financing activities (168.3) (338.0) (95.4) (350.1) (31.9) (1) Excludes borrowings of $256.6 million, $249.2 million, $278.7 million, $28.2 million and $25.0 million, as of December 31, 2013, 2012, 2011, 2010 and 2009, respectively, under our inventory financing agreements. We do not include these borrowings in total debt because we have not in the past incurred, and in the future do not expect to incur, any interest expense or late fees under these agreements.
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28 (2) For purposes of calculating the ratio of earnings to fixed charges, earnings consist of earnings before income taxes minus income from equity investees plus fixed charges. Fixed charges consist of interest expense and the portion of rental expense we believe is representative of the interest component of rental expense. (a) For the years ended December 31, 2010 and 2009, earnings available for fixed charges were inadequate to cover fixed charges by $37.0 million and $461.2 million, respectively. (3) EBITDA is defined as consolidated net income (loss) before interest expense, income tax expense (benefit), depreciation, and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, is calculated by adjusting EBITDA for certain items of income and expense including (but not limited to) the following: (a) non- cash equity-based compensation; (b) goodwill impairment charges; (c) sponsor fees; (d) certain consulting fees; (e) debt-related legal and accounting costs; (f) equity investment income and losses; (g) certain severance and retention costs; (h) gains and losses from the early extinguishment of debt; (i) gains and losses from asset dispositions outside the ordinary course of business; and (j) non-recurring, extraordinary or unusual gains or losses or expenses.
We have included a reconciliation of EBITDA and Adjusted EBITDA in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements.
The following unaudited table sets forth reconciliations of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA for the periods presented:
Years Ended December 31,
(in millions) 2013 2012 2011 2010 2009
Net income (loss) $ 132.8 $ 119.0 $ 17.1 $ (29.2) $ (373.4) Depreciation and amortization 208.2 210.2 204.9 209.4 218.2 Income tax expense (benefit) 62.7 67.1 11.2 (7.8) (87.8) Interest expense, net 250.1 307.4 324.2 391.9 431.7
EBITDA 653.8 703.7 557.4 564.3 188.7
Non-cash equity-based compensation 8.6 22.1 19.5 11.5 15.9 Sponsor fees 2.5 5.0 5.0 5.0 5.0
Consulting and debt-related professional fees 0.1 0.6 5.1 15.1 14.1 Goodwill impairment — — — — 241.8
Net loss (gain) on extinguishments of long-
term debt 64.0 17.2 118.9 (2.0) —
Litigation, net (i) (4.1) 4.3 — — —
IPO- and secondary-offering related expenses 75.0 — — — — Other adjustments (ii) 8.6 13.7 11.4 7.9 (0.1)
Adjusted EBITDA $ 808.5 $ 766.6 $ 717.3 $ 601.8 $ 465.4 (i) Relates to unusual, non-recurring litigation matters. (ii) Includes certain retention costs and equity investment income, certain severance costs in 2009 and a gain related to the sale of the Informacast software and equipment in 2009.
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29 The following unaudited table sets forth a reconciliation of EBITDA to net cash provided by operating activities for the periods presented:
Years Ended December 31,
(in millions) 2013 2012 2011 2010 2009
EBITDA $ 653.8 $ 703.7 $ 557.4 $ 564.3 $ 188.7
Depreciation and amortization (208.2) (210.2) (204.9) (209.4) (218.2) Income tax (expense) benefit (62.7) (67.1) (11.2) 7.8 87.8 Interest expense, net (250.1) (307.4) (324.2) (391.9) (431.7) Net income (loss) 132.8 119.0 17.1 (29.2) (373.4)
Depreciation and amortization 208.2 210.2 204.9 209.4 218.2 Goodwill impairment — — — — 241.8
Equity-based compensation
expense 46.6 22.1 19.5 11.5 15.9
Amortization of deferred
financing costs, debt premium,
and debt discount, net 8.8 13.6 15.7 18.0 16.2
Deferred income taxes (48.7) (56.3) (10.2) (4.3) (94.4) Allowance for doubtful accounts — — 0.4 (1.3) (0.2)
Realized loss on interest rate swap
agreements — — 2.8 51.5 103.2
Mark to market loss on interest
rate derivatives 0.1 0.9 4.2 4.7 —
Net loss (gain) on
extinguishments of long-term debt 64.0 17.2 118.9 (2.0) — Net loss (gain) on sale and
disposal of assets — 0.1 0.3 0.7 (1.7)
Changes in assets and liabilities (47.1) (9.4) (158.3) 165.3 (18.0) Other non-cash items 1.6 — (0.6) (0.6) —
Net cash provided by operating
activities $ 366.3 $ 317.4 $ 214.7 $ 423.7 $ 107.6
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30 (4) Non-GAAP net income (loss) is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that non-GAAP net income (loss) provides meaningful information regarding our operating performance and our prospects for the future. This supplemental measure excludes, among other things, charges related to the amortization of Acquisition-related intangibles, non-cash equity-based compensation and gains and losses from the early extinguishment of debt. The following unaudited table sets forth a reconciliation of net income (loss) to non-GAAP net income (loss) for the periods presented:
Years Ended December 31,
(in millions) 2013 2012 2011 2010 2009
Net income (loss) $ 132.8 $ 119.0 $ 17.1 $ (29.2) $ (373.4) Amortization of intangibles (i)
161.2 163.7 165.7 166.8 168.9
Non-cash equity-based compensation 8.6 22.1 19.5 11.5 15.9 Litigation, net (ii)
(6.3) — — — —
Net loss on extinguishments of long-term debt 64.0 17.2 118.9 (2.0) — Interest expense adjustment related to
extinguishments of long-term debt (iii) (7.5) (3.3) (19.4) (0.7) — IPO- and secondary-offering related expenses (iv)
75.0 — — — —
Debt-related refinancing costs (v)
— — 3.8 5.6 —
Goodwill impairment — — — — 241.8
Severance expense — — — — 1.4
Aggregate adjustment for income taxes (vi)
(113.5) (71.6) (106.8) (66.3) (69.1)
Non-GAAP net income (loss) $ 314.3 $ 247.1 $ 198.8 $ 85.7 $ (14.5) (i) Includes amortization expense for Acquisition-related intangible assets, primarily customer relationships and trade names.
(ii) Relates to unusual, non-recurring litigation matters. (iii) Reflects adjustments to interest expense resulting from debt extinguishments. Represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. (iv) IPO- and secondary-offering related expenses consist of the following:
(in millions) Year Ended
December 31, 2013
Acceleration charge for certain equity awards and
related employer payroll taxes $ 40.7
RDU Plan cash retention pool accrual 7.5
Management services agreement termination fee 24.4
Other expenses 2.4
IPO- and secondary-offering related expenses $ 75.0
(v) Represents fees and costs expensed related to the December 2010 and March 2011 amendments to our prior senior secured term loan facility.
(vi) Based on a normalized effective tax rate of 39.0%.
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31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Unless otherwise indicated or the context otherwise requires, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “we,” “us,” “the Company,” “our,” “CDW” and similar terms refer to CDW Corporation and its subsidiaries. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the audited consolidated financial statements and the related notes included elsewhere in this report. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actual results may differ materially from those contained in any forward-looking statements. See “Forward- Looking Statements” above.
Overview
CDW is a Fortune 500 company and a leading provider of integrated information technology (“IT”) solutions in the U.S. and Canada. We help our customer base of approximately 250,000 small, medium and large business, government, education and healthcare customers by delivering critical solutions to their increasingly complex IT needs. Our broad array of offerings ranges from discrete hardware and software products to integrated IT solutions such as mobility, security, data center optimization, cloud computing, virtualization and collaboration. We are technology "agnostic," with a product portfolio that includes more than 100,000 products from more than 1,000 brands. We provide our products and solutions through sales force and service delivery teams consisting of more than 4,400 coworkers, including nearly 1,800 field sellers, highly-skilled technology specialists and advanced service delivery engineers.
We are a leading U.S. sales channel partner for many original equipment manufacturers (“OEMs”) and software publishers (collectively, our “vendor partners”), whose products we sell or include in the solutions we offer. We believe we are an important extension of our vendor partners' sales and marketing capabilities, providing them with a cost-effective way to reach customers and deliver a consistent brand experience through our established end-market coverage and extensive customer access.
We have two reportable segments: Corporate, which is comprised primarily of private sector business customers, and Public, which is comprised of government agencies and education and healthcare institutions. Our Corporate segment is divided into a medium/large business customer channel, primarily serving customers with more than 100 employees, and a small business customer channel, primarily serving customers with up to 100 employees. We also have two other operating segments, CDW Advanced Services and Canada, which do not meet the reportable segment quantitative thresholds and, accordingly, are combined together as “Other.” The CDW Advanced Services business consists primarily of customized engineering services delivered by technology specialists and engineers, and managed services that include Infrastructure as a Service (“IaaS”) offerings. Revenues from the sale of hardware, software, custom configuration and third-party provided services are recorded within our Corporate and Public segments.
We may sell all or only select products that our vendor partners offer. Each vendor partner agreement provides for specific terms and conditions, which may include one or more of the following: product return privileges, price protection policies, purchase discounts and vendor incentive programs, such as purchase or sales rebates and cooperative advertising reimbursements. We also resell software for major software publishers. Our agreements with software publishers allow the end- user customer to acquire software or licensed products and services. In addition to helping our customers determine the best software solutions for their needs, we help them manage their software agreements, including warranties and renewals. A significant portion of our advertising and marketing expenses is reimbursed through cooperative advertising reimbursement programs with our vendor partners. These programs are at the discretion of our vendor partners and are typically tied to sales or purchasing volumes or other commitments to be met by us within a specified period of time.
Trends and Key Factors Affecting our Financial Performance We believe the following trends may have an important impact on our financial performance:
• Our Public segment sales are impacted by government spending policies, budget priorities and revenue levels. An adverse change in any of these factors could cause our Public segment customers to reduce their purchases or to terminate or not renew contracts with us, which could adversely affect our business, results of operations or cash flows. Although our sales to the federal government are diversified across multiple agencies and departments, they collectively accounted for approximately 7%, 10% and 10% of our net sales for the years ended December 31, 2013, 2012 and 2011, respectively. Second half 2013 Public segment results were negatively impacted by federal government budget uncertainty, sequestration and the partial shutdown of the federal government for 16 days.
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32 • An important factor affecting our ability to generate sales and achieve our targeted operating results is the impact of general economic conditions on our customers’ willingness to spend on information technology. In the second quarter of 2012, we began to see customers take a more cautious approach to spending as increased macroeconomic uncertainty impacted decision-making and led to some customers delaying purchases. As we moved through 2013, we saw improvements in operating results for certain sales channels. We will continue to closely monitor macroeconomic conditions during 2014. Uncertainties related to potential reductions in government spending, requirements associated with implementation of the Affordable Care Act, potential changes in tax and regulatory policy, weakening consumer and business confidence or increased unemployment could result in reduced or deferred spending on information technology products and services by our customers and result in increased competitive pricing pressures. • We believe that our customers’ transition to more complex technology solutions will continue to be an important growth area for us in the future. However, because the market for technology products and services is highly competitive, our success at capitalizing on this transition will be based on our ability to tailor specific solutions to customer needs, the quality and breadth of our product and service offerings, the knowledge and expertise of our sales force, price, product availability and speed of delivery. 2013 Initial Public Offering
On July 2, 2013, we completed an initial public offering ("IPO") of 23,250,000 shares of common stock. On July 31, 2013, we completed the sale of an additional 3,487,500 shares of common stock to the underwriters of the IPO pursuant to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO. Our shares of common stock were sold to the underwriters at a price of $17.00 per share in the IPO and upon the exercise of the overallotment option, which together, generated aggregate net proceeds of $424.7 million to the Company after deducting underwriting discounts, expenses and transaction costs.
On November 19, 2013, we completed a secondary public offering, whereby certain selling stockholders sold 15,000,000 shares of common stock. On December 18, 2013, such selling stockholders sold an additional 2,250,000 shares of common stock to the underwriters of the secondary public offering pursuant to the underwriters' December 13, 2013 exercise in full of the overallotment option granted to them in connection with the secondary public offering. We did not receive any proceeds from the sale of shares in the secondary public offering or upon the exercise of the overallotment option.
The consolidated statement of operations for the year ended December 31, 2013 included pre-tax IPO- and secondary- offering related expenses of $75.0 million. See Note 9 of the accompanying audited consolidated financial statements for additional discussion of our IPO and secondary offering.
Key Business Metrics
Our management monitors a number of financial and non-financial measures and ratios on a regular basis in order to track the progress of our business and make adjustments as necessary. We believe that the most important of these measures and ratios include average daily sales, gross margin, operating margin, net income, Non-GAAP net income, net income per common share, Non-GAAP net income per diluted share, EBITDA and Adjusted EBITDA, return on invested capital, cash and cash equivalents, net working capital, cash conversion cycle (defined to be days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average), debt levels including available credit and leverage ratios, sales per coworker and coworker turnover. These measures and ratios are compared to standards or objectives set by management, so that actions can be taken, as necessary, in order to achieve the standards and objectives. Non-GAAP net income and Adjusted EBITDA are non-GAAP financial measures. We believe these measures provide helpful information with respect to the company’s operating performance and cash flows including our ability to meet our future debt service, capital expenditures, dividend payments, and working capital requirements, Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our senior credit facilities. See "Selected Financial Data" included elsewhere in this report for the definitions of Non-GAAP net income and Adjusted EBITDA and reconciliations to net income.
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33 The results of certain key business metrics are as follows:
(dollars in millions) Years Ended December 31,
2013 2012 2011
Net sales $ 10,768.6 $ 10,128.2 $ 9,602.4
Gross profit 1,760.3 1,669.6 1,583.5
Income from operations 508.6 510.6 470.7
Net income 132.8 119.0 17.1
Non-GAAP net income 314.3 247.1 198.8
Adjusted EBITDA 808.5 766.6 717.3
Average daily sales 42.4 39.9 37.7
Net debt (defined as total debt minus cash and cash equivalents) 3,063.1 3,733.1 3,966.1 Cash conversion cycle (in days) (1) 24 24 28
(1) Cash conversion cycle is defined as days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average.
Results of Operations
Year Ended December 31, 2013 Compared to Year Ended December 31, 2012 The following table presents our results of operations, in dollars and as a percentage of net sales, for the years ended December 31, 2013 and 2012:
Year Ended December 31, 2013 Year Ended December 31, 2012
Dollars in
Millions
Percentage of
Net Sales
Dollars in
Millions
Percentage of
Net Sales
Net sales $ 10,768.6 100.0% $ 10,128.2 100.0%
Cost of sales 9,008.3 83.7 8,458.6 83.5
Gross profit 1,760.3 16.3 1,669.6 16.5
Selling and administrative expenses 1,120.9 10.4 1,029.5 10.2 Advertising expense 130.8 1.2 129.5 1.3
Income from operations 508.6 4.7 510.6 5.0
Interest expense, net (250.1) (2.3) (307.4) (3.0)
Net loss on extinguishments of long-term debt (64.0) (0.6) (17.2) (0.2) Other income, net 1.0 — 0.1 —
Income before income taxes 195.5 1.8 186.1 1.8
Income tax expense (62.7) (0.6) (67.1) (0.7)
Net income $ 132.8 1.2% $ 119.0 1.1%
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34 Net sales
The following table presents our net sales by segment, in dollars and as a percentage of total net sales, and the year- over-year dollar and percentage change in net sales for the years ended December 31, 2013 and 2012:
Years Ended December 31,
2013 2012
Dollars in
Millions
Percentage of
Total Net
Sales
Dollars in
Millions
Percentage of
Total Net
Sales
Dollar
Change
Percent
Change (1)
Corporate $ 5,960.1 55.3% $ 5,512.8 54.4% $ 447.3 8.1%
Public 4,164.5 38.7 4,023.0 39.7 141.5 3.5
Other 644.0 6.0 592.4 5.9 51.6 8.7
Total net sales $ 10,768.6 100.0% $ 10,128.2 100.0% $ 640.4 6.3% (1) There were 254 selling days in both the years ended December 31, 2013 and 2012.
The following table presents our net sales by customer channel for our Corporate and Public segments and the year- over-year dollar and percentage change in net sales for the years ended December 31, 2013 and 2012:
(dollars in millions) Years Ended December 31,
2013 2012 Dollar Change Percent Change
Corporate:
Medium / Large $ 4,902.6 $ 4,448.5 $ 454.1 10.2 %
Small Business 1,057.5 1,064.3 (6.8) (0.6)
Total Corporate $ 5,960.1 $ 5,512.8 $ 447.3 8.1 %
Public:
Government $ 1,250.6 $ 1,394.1 $ (143.5) (10.3)%
Education 1,449.0 1,192.3 256.7 21.5
Healthcare 1,464.9 1,436.6 28.3 2.0
Total Public $ 4,164.5 $ 4,023.0 $ 141.5 3.5 %
Total net sales in 2013 increased $640.4 million, or 6.3%, to $10,768.6 million, compared to $10,128.2 million in 2012. There were 254 selling days for both the years ended December 31, 2013 and 2012. The increase in total net sales was primarily the result of growth in hardware and software, a more tenured sales force, a continued focus on seller productivity across all areas of the organization and the addition of nearly 120 customer-facing coworkers, the majority in pre- and post-sale technical positions such as technical specialists and service delivery roles. Our total net sales growth for the year ended December 31, 2013 reflected growth in notebooks/mobile devices, netcomm products and software. Software gains were driven by growth in security, document management software and network management software, partially offset by a decline in application suites.
Corporate segment net sales in 2013 increased $447.3 million, or 8.1%, compared to 2012, driven by sales growth in the medium/large customer channel. Within our Corporate segment, net sales to medium/large customers increased 10.2% between years primarily due to certain of these customers increasing their IT spending, a more tenured sales force, a continued focus on seller productivity and additional customer-facing coworkers, the majority in pre- and post-sale technical positions such as technical specialists and service delivery roles. This increase was led by unit volume growth in netcomm products and growth in notebooks/mobile devices and software. Partially offsetting the growth in the medium/large customer channel was a
0.6% decline in net sales to small business customers, due to certain of these customers taking a more cautious approach to spending as macroeconomic and regulatory uncertainty impacted decision-making. This decrease was led by unit volume declines in notebooks/mobile devices, partially offset by growth in netcomm products.
Public segment net sales in 2013 increased $141.5 million, or 3.5%, between years, driven by strong performance in the education customer channel. Net sales to education customers increased $256.7 million, or 21.5%, between years, led by growth in net sales to K-12 customers, reflecting increased sales of notebooks/mobile devices to support new standardized digital testing requirements that will take effect in 2014. Net sales to government customers decreased $143.5 million, or Table of Contents
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35 10.3%, in 2013 compared to 2012 due to reductions and delays in federal government spending following sequestration, uncertainty over future budget negotiations and the partial shutdown of the federal government. The government customer channel net sales decline was led by decreases in sales of enterprise storage and notebooks/mobile devices, partially offset by growth in software. Net sales to healthcare customers increased $28.3 million, or 2.0%, between years, driven by growth in notebooks/mobile devices and desktop computers.
Gross profit
Gross profit increased $90.7 million, or 5.4%, to $1,760.3 million in 2013, compared to $1,669.6 million in 2012. As a percentage of total net sales, gross profit decreased 20 basis points to 16.3% in 2013, down from 16.5% in 2012. Gross profit margin was negatively impacted 30 basis points by unfavorable price/mix changes within product margin, as we experienced product margin compression in transactional product categories such as desktops and notebooks. Partially offsetting this decrease was an increase of 10 basis points due to a higher mix of net service contract revenue. Net service contract revenue, including items such as third-party services and warranties, has a positive impact on gross profit margin as our cost paid to the vendor or third-party service provider is recorded as a reduction to net sales, resulting in net sales being equal to the gross profit on the transaction.
The gross profit margin may fluctuate based on various factors, including vendor incentive and inventory price protection programs, cooperative advertising funds classified as a reduction of cost of sales, product mix, net service contract revenue, commission revenue, pricing strategies, market conditions and other factors, any of which could result in changes in gross profit margins.
Selling and administrative expenses
Selling and administrative expenses increased $91.4 million, or 8.9%, to $1,120.9 million in 2013, compared to $1,029.5 million in 2012. As a percentage of total net sales, selling and administrative expenses increased 20 basis points to
10.4% in 2013, up from 10.2% in 2012. Sales payroll, including sales commissions and other variable compensation costs, increased $28.9 million, or 6.4%, between years, consistent with higher sales and gross profit. Additionally, selling and administrative expenses for 2013 included IPO- and secondary-offering related expenses of $75.0 million, as follows:
• Pre-tax charges of $36.7 million related to the acceleration of the expense recognition for certain equity awards and $4.0 million for the related employer payroll taxes. See Note 10 of the accompanying audited consolidated financial statements for additional discussion of the impact of the IPO on our equity awards. • A pre-tax charge of $24.4 million related to the payment of a termination fee to affiliates of the Sponsors in connection with the termination of the management services agreement with such entities. • A pre-tax charge of $7.5 million related to compensation expense in connection with the Restricted Debt Unit Plan.
See Note 12 of the accompanying audited consolidated financial statements for additional discussion of this charge. • Other IPO- and secondary-offering related expenses of $2.4 million.
We did not record any IPO- or secondary-offering related expenses during 2012. Partially offsetting these increases in 2013, was the favorable resolution of a class action legal proceeding in which we were a claimant, which reduced selling and administrative expenses by $10.4 million in 2013 compared to 2012. Total coworker count increased by 163 coworkers, from 6,804 at December 31, 2012, to 6,967 at December 31, 2013.
Advertising expense
Advertising expense increased $1.3 million, or 0.9%, to $130.8 million in 2013, compared to $129.5 million in 2012.
As a percentage of net sales, advertising expense was 1.2% in 2013, compared to 1.3% in 2012. The dollar increase in advertising expense was due to a continued focus on advertising our solutions and products, which reinforces our reputation as a leading IT solutions provider.
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36 Income from operations
The following table presents income (loss) from operations by segment, in dollars and as a percentage of net sales, and the year-over-year percentage change in income (loss) from operations for the years ended December 31, 2013 and 2012:
Year Ended December 31, 2013 Year Ended December 31, 2012
Dollars in
Millions
Operating
Margin
Percentage
Dollars in
Millions
Operating
Margin
Percentage
Percent Change
in Income (Loss)
from Operations
Segments: (1)
Corporate $ 363.3 6.1% $ 349.0 6.3% 4.1 %
Public 246.5 5.9 246.7 6.1 (0.1)
Other 27.2 4.2 18.6 3.1 46.3
Headquarters (2) (128.4) nm* (103.7) nm* (23.8)
Total income from operations $ 508.6 4.7% $ 510.6 5.0% (0.4)% * Not meaningful
(1) Segment income (loss) from operations includes the segment’s direct operating income (loss) and allocations for Headquarters’ costs, allocations for income and expenses from logistics services, certain inventory adjustments and volume rebates and cooperative advertising from vendors. (2) Includes certain Headquarters’ function costs that are not allocated to the segments.
Income from operations was $508.6 million in 2013, a decrease of $2.0 million, or 0.4%, compared to $510.6 million in 2012. The decrease in income from operations was driven by higher selling and administrative expenses primarily resulting from $75.0 million of IPO- and secondary-offering related expenses recorded during 2013, mostly offset by higher net sales and gross profit. Total operating margin percentage decreased 30 basis points to 4.7% in 2013, from 5.0% in 2012. Operating margin percentage was negatively impacted by the increase in selling and administrative expenses as a percentage of net sales and gross profit margin compression, partially offset by a decrease in advertising expense as a percentage of net sales.
Corporate segment income from operations was $363.3 million in 2013, an increase of $14.3 million, or 4.1%, compared to $349.0 million in 2012. Corporate segment operating margin percentage decreased 20 basis points to 6.1% in 2013, from 6.3% in 2012. Results for 2013 included $26.4 million of IPO- and secondary-offering related expenses, which reduced Corporate segment operating margin by 40 basis points. Higher sales and gross profit dollars offset the effect of IPO- and secondary-offering related expenses on income from operations for 2013.
Public segment income from operations was $246.5 million in 2013, a decrease of $0.2 million, or 0.1%, compared to $246.7 million in 2012. Public segment operating margin percentage decreased 20 basis points to 5.9% in 2013, from 6.1% in 2012. Results for 2013 included $14.4 million of IPO- and secondary-offering related expenses, which reduced Public segment operating margin by 30 basis points. Higher sales and gross profit dollars nearly offset the effect of IPO- and secondary- offering related expenses on income from operations for 2013.
Interest expense, net
At December 31, 2013, our outstanding long-term debt totaled $3,251.2 million, compared to $3,771.0 million at December 31, 2012. We reduced long-term debt throughout the year primarily through the use of a portion of the net proceeds from the IPO and cash flows provided by operating activities. Net interest expense in 2013 was $250.1 million, a decrease of $57.3 million compared to $307.4 million in 2012. This decrease was primarily due to lower debt balances and effective interest rates for 2013 compared to 2012 as a result of debt repayments and refinancing activities completed during 2012 and 2013. See "Liquidity and Capital Resources" below.
Net loss on extinguishments of long-term debt
During 2013, we recorded a net loss on extinguishments of long-term debt of $64.0 million compared to $17.2 million in 2012.
In October 2013, we redeemed $155.0 million aggregate principal amount of senior subordinated notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $8.5 million, representing the difference Table of Contents
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37 between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs.
In August 2013, we redeemed $324.0 million aggregate principal amount of senior subordinated notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $24.6 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs.
In July 2013, we redeemed $175.0 million aggregate principal amount of senior secured notes. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $16.7 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs.
In April 2013, we entered into a new seven-year, $1,350.0 million aggregate principal amount senior secured term loan facility. Substantially all of the proceeds were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured term loan facility. In connection with this refinancing, we recorded a loss on extinguishment of long-term debt of $10.3 million, representing a write-off of the remaining unamortized deferred financing costs related to the prior senior secured term loan facility.
In March 2013, we redeemed $50.0 million aggregate principal amount of senior subordinated notes. We recorded a loss on extinguishment of long-term debt of $3.9 million, representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs.
In December 2012, we redeemed $100.0 million aggregate principal amount of senior subordinated notes. We recorded a loss on extinguishment of long-term debt of $7.8 million representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs.
In February and March 2012, we purchased or redeemed the remaining $129.0 million of senior notes due 2015, funded with the issuance of an additional $130.0 million of senior notes due 2019. As a result, we recorded a loss on extinguishment of long-term debt of $9.4 million, representing the difference between the purchase or redemption price of the senior notes due 2015 and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs.
Income tax expense
Income tax expense was $62.7 million in 2013, compared to $67.1 million in 2012. The effective income tax rate, expressed by calculating income tax expense or benefit as a percentage of income before income taxes, was 32.1% and 36.0% for 2013 and 2012, respectively.
For 2013, the effective tax rate differed from the U.S. federal statutory rate primarily due to state income taxes, including current year state income tax credits and an adjustment to deferred state income taxes due to changes in apportionment factors. For 2012, the effective tax rate differed from the U.S. federal statutory rate primarily due to favorable adjustments to state tax credits which were partially offset by the unfavorable impact of adjustments to deferred state income taxes due to changes in state tax laws and non-deductible expenses, primarily equity-based compensation and meals and entertainment. The lower effective tax rate for 2013 as compared to 2012 was primarily driven by the favorable impact of adjustments to deferred state income taxes due to changes in state tax apportionment factors and lower non-deductible expenses.
Net income
Net income was $132.8 million in 2013, compared to $119.0 million in 2012. Significant factors and events causing the net changes between the periods are discussed above.
Non-GAAP net income
Non-GAAP net income was $314.3 million for the year ended December 31, 2013, an increase of $67.2 million, or
27.2%, compared to $247.1 million for the year ended December 31, 2012.
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38 We have included a reconciliation of Non-GAAP net income for the years ended December 31, 2013 and 2012 below.
Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangibles, non-cash equity-based compensation, IPO- and secondary-offering related expenses and gains and losses from the early extinguishment of debt. Non-GAAP net income is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that Non-GAAP net income provides helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. (in millions) Years Ended December 31,
2013 2012
Net income $ 132.8 $ 119.0
Amortization of intangibles (1) 161.2 163.7
Non-cash equity-based compensation 8.6 22.1
Litigation, net (2) (6.3) —
Net loss on extinguishments of long-term debt 64.0 17.2 Interest expense adjustment related to extinguishments of long-term debt (3) (7.5) (3.3)
IPO- and secondary-offering related expenses (4) 75.0 — Aggregate adjustment for income taxes (5) (113.5) (71.6) Non-GAAP net income $ 314.3 $ 247.1
(1) Includes amortization expense for acquisition-related intangible assets, primarily customer relationships and trade names.
(2) Relates to unusual, non-recurring litigation matters. (3) Reflects adjustments to interest expense resulting from debt extinguishments. Represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. (4) IPO- and secondary-offering related expenses consist of the following:
(in millions) Years Ended December 31,
2013 2012
Acceleration charge for certain equity awards and
related employer payroll taxes $ 40.7 $ —
RDU Plan cash retention pool accrual 7.5 —
Management services agreement termination fee 24.4 —
Other expenses 2.4 —
IPO- and secondary-offering related expenses $ 75.0 $ — (5) Based on a normalized effective tax rate of 39.0%.
Adjusted EBITDA
Adjusted EBITDA was $808.5 million in 2013, an increase of $41.9 million, or 5.5%, compared to $766.6 million in 2012. As a percentage of net sales, Adjusted EBITDA was 7.5% and 7.6% in 2013 and 2012, respectively.
We have included a reconciliation of EBITDA and Adjusted EBITDA for 2013 and 2012 in the table below. EBITDA is defined as consolidated net income before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non- GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used Table of Contents
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39 by other companies, even when similar terms are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements.
(in millions) Years Ended December 31,
2013 2012
Net income $ 132.8 $ 119.0
Depreciation and amortization 208.2 210.2
Income tax expense 62.7 67.1
Interest expense, net 250.1 307.4
EBITDA 653.8 703.7
Adjustments:
Non-cash equity-based compensation 8.6 22.1
Sponsor fee 2.5 5.0
Consulting and debt-related professional fees 0.1 0.6
Net loss on extinguishments of long-term debt 64.0 17.2 Litigation, net (1) (4.1) 4.3
IPO- and secondary-offering related expenses (2) 75.0 — Other adjustments (3) 8.6 13.7
Total adjustments 154.7 62.9
Adjusted EBITDA $ 808.5 $ 766.6
(1) Relates to unusual, non-recurring litigation matters. (2) As defined under Non-GAAP net income above.
(3) Other adjustments primarily include certain retention costs and equity investment income.
The following table sets forth a reconciliation of EBITDA to net cash provided by operating activities for the years ended December 31, 2013 and 2012.
Years Ended December 31,
(in millions) 2013 2012
EBITDA $ 653.8 $ 703.7
Depreciation and amortization (208.2) (210.2)
Income tax expense (62.7) (67.1)
Interest expense, net (250.1) (307.4)
Net income 132.8 119.0
Depreciation and amortization 208.2 210.2
Equity-based compensation expense 46.6 22.1
Deferred income taxes (48.7) (56.3)
Amortization of deferred financing costs, debt premium, and debt discount, net 8.8 13.6
Net loss on extinguishments of long-term debt 64.0 17.2 Other 1.7 1.0
Changes in assets and liabilities (47.1) (9.4)
Net cash provided by operating activities $ 366.3 $ 317.4 Table of Contents
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40 Year Ended December 31, 2012 Compared to Year Ended December 31, 2011 The following table presents our results of operations, in dollars and as a percentage of net sales, for the years ended December 31, 2012 and 2011:
Year Ended December 31, 2012 Year Ended December 31, 2011
Dollars in
Millions
Percentage of
Net Sales
Dollars in
Millions
Percentage of
Net Sales
Net sales $ 10,128.2 100.0% $ 9,602.4 100.0%
Cost of sales 8,458.6 83.5 8,018.9 83.5
Gross profit 1,669.6 16.5 1,583.5 16.5
Selling and administrative expenses 1,029.5 10.2 990.1 10.3 Advertising expense 129.5 1.3 122.7 1.3
Income from operations 510.6 5.0 470.7 4.9
Interest expense, net (307.4) (3.0) (324.2) (3.4)
Net loss on extinguishments of long-term debt (17.2) (0.2) (118.9) (1.2) Other income, net 0.1 — 0.7 —
Income before income taxes 186.1 1.8 28.3 0.3
Income tax expense (67.1) (0.7) (11.2) (0.1)
Net income $ 119.0 1.1% $ 17.1 0.2%
Net sales
The following table presents our net sales by segment, in dollars and as a percentage of total net sales, and the year- over-year dollar and percentage change in net sales for the years ended December 31, 2012 and 2011:
Years Ended December 31,
2012 2011
Dollars in
Millions
Percentage of
Total Net
Sales
Dollars in
Millions
Percentage of
Total Net
Sales
Dollar
Change
Percent
Change (1)
Corporate $ 5,512.8 54.4% $ 5,334.4 55.6% $ 178.4 3.3%
Public 4,023.0 39.7 3,757.2 39.1 265.8 7.1
Other 592.4 5.9 510.8 5.3 81.6 16.0
Total net sales $ 10,128.2 100.0% $ 9,602.4 100.0% $ 525.8 5.5% (1) There were 254 and 255 selling days in the years ended December 31, 2012 and 2011, respectively. On an average daily basis, total net sales increased 5.9%.
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41 The following table presents our net sales by customer channel for our Corporate and Public segments and the year- over-year dollar and percentage change in net sales for the years ended December 31, 2012 and 2011:
(in millions) Years Ended December 31,
2012 2011 Dollar Change Percent Change
Corporate:
Medium / Large $ 4,448.5 $ 4,287.1 $ 161.4 3.8%
Small Business 1,064.3 1,047.3 17.0 1.6
Total Corporate $ 5,512.8 $ 5,334.4 $ 178.4 3.3%
Public:
Government $ 1,394.1 $ 1,343.5 $ 50.6 3.8%
Education 1,192.3 1,197.7 (5.4) (0.4)
Healthcare 1,436.6 1,216.0 220.6 18.1
Total Public $ 4,023.0 $ 3,757.2 $ 265.8 7.1%
Total net sales in 2012 increased $525.8 million, or 5.5%, to $10,128.2 million, compared to $9,602.4 million in 2011. There were 254 and 255 selling days in the years ended December 31, 2012 and 2011, respectively. On an average daily basis, total net sales increased 5.9%. The increase in total net sales was the result of general volume growth, market share gains, a more tenured sales force, and a continued focus on seller productivity across all areas of the organization. Our net sales growth for the year ended December 31, 2012 reflected growth in notebooks/mobile devices, netcomm products, software products, desktop computers and enterprise storage.
Corporate segment net sales in 2012 increased $178.4 million, or 3.3%, compared to 2011. Within our Corporate segment, net sales to medium/large customers increased 3.8% between years, and net sales to small business customers increased 1.6% between years. Customers within the Corporate segment continued to take a more cautious approach to spending as increased macroeconomic uncertainty impacted decision-making and led to some customers delaying purchases.
The increases in Corporate segment net sales were primarily a result of hardware growth, most notably in netcomm products, and unit volume growth in desktop computers. Software product growth, led by network management and security software, also contributed to the increase in net sales. Partially offsetting the growth was a decline in net sales of memory products due to several large orders in the second and third quarters of 2011 that did not recur.
Public segment net sales in 2012 increased $265.8 million, or 7.1%, between years, driven by continued strong performance in the healthcare customer channel. Net sales to healthcare customers increased $220.6 million, or 18.1%, between years, led by hardware growth, most notably in enterprise storage, and unit volume growth in netcomm products, desktop computers and point of care technology carts. Software product growth also contributed to the increase in net sales in healthcare. The healthcare customer channel growth was primarily the result of deeper relationships with several group purchasing organizations and increased healthcare industry demand for IT products, as the healthcare industry continued its adoption of electronic medical records and point of care technologies. Net sales to government customers increased $50.6 million, or 3.8%, in 2012 compared to 2011 led by unit volume increases in sales of notebooks/mobile devices, partially offset by a decline in net sales of netcomm products. Net sales to education customers decreased $5.4 million, or 0.4%, between years, reflecting budget constraints. A decline in sales to K-12 customers was partially offset by growth in sales to higher education customers that was led by increased sales of netcomm products, as higher education customers refreshed and added additional enterprise technology.
Gross profit
Gross profit increased $86.1 million, or 5.4%, to $1,669.6 million in 2012, compared to $1,583.5 million in 2011. As a percentage of total net sales, gross profit was 16.5% in both 2012 and 2011. Gross profit margin was positively impacted 10 basis points by a higher mix of commission and net service contract revenue. Fully offsetting these increases in gross profit margin were declines in vendor funding primarily due to program changes for certain vendors. Commission revenue, including agency fees earned on sales of software licenses and software assurance under enterprise agreements, has a positive impact on our gross profit margin, as we record the fee or commission as a component of net sales when earned and there is no corresponding cost of sales. Net service contract revenue, including items such as third-party services and warranties, also has a positive impact on gross profit margin as our cost paid to the vendor or third-party service provider is recorded as a reduction to net sales, resulting in net sales being equal to the gross profit on the transaction. Vendor funding includes purchase discounts, volume rebates and cooperative advertising.
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42 The gross profit margin may fluctuate based on various factors, including vendor incentive and inventory price protection programs, cooperative advertising funds classified as a reduction of cost of sales, product mix, net service contract revenue, commission revenue, pricing strategies, market conditions, and other factors, any of which could result in changes in gross profit margins.
Selling and administrative expenses
Selling and administrative expenses increased $39.4 million, or 4.0%, to $1,029.5 million in 2012, compared to $990.1 million in 2011. As a percentage of total net sales, selling and administrative expenses decreased 10 basis points to
10.2% in 2012, down from 10.3% in 2011. The dollar increase in selling and administrative expenses was primarily due to higher payroll costs (excluding bonus compensation tied to Adjusted EBITDA) of $43.0 million. The higher payroll costs reflected in selling and administrative expenses were driven by increased sales commissions and other variable compensation costs consistent with higher sales and gross profit. While total coworker count increased by 59 coworkers, from 6,745 coworkers at December 31, 2011 to 6,804 coworkers at December 31, 2012, the increase was primarily comprised of service delivery coworkers, the cost of which is reflected in cost of sales. Other factors that increased selling and administrative expenses included a $5.8 million increase in health benefits due to higher claims costs and a higher average number of participants in 2012 compared to 2011, a $5.3 million increase in depreciation and amortization expense related primarily to additional capital expenditures for information technology systems, and a $2.6 million increase in stock compensation expense, primarily due to incremental expense related to a modified Class B Common Unit grant agreement with our former chief executive officer. Partially offsetting these increases was an $11.8 million decline in bonus compensation tied to Adjusted EBITDA, as performance fell below target, $3.8 million of expenses related to the modification of our senior secured term loan facility in 2011 that did not recur in 2012, and a $3.3 million decline in litigation expenses between years.
The decrease in selling and administrative expenses as a percentage of sales of 10 basis points between years was driven by the decline in incentive compensation tied to Adjusted EBITDA performance.
Advertising expense
Advertising expense increased $6.8 million, or 5.6%, to $129.5 million in 2012, compared to $122.7 million in 2011.
As a percentage of net sales, advertising expense was 1.3% in both 2012 and 2011. The increase in advertising expense was due to a focus on continuing to advertise our solutions and products and to build our reputation as a leading IT solutions provider, primarily through targeted digital advertising, partially offset by decreases in expenditures for print advertising.
Income from operations
The following table presents income (loss) from operations by segment, in dollars and as a percentage of net sales, and the year-over-year percentage change in income (loss) from operations for the years ended December 31, 2012 and 2011:
Year Ended December 31, 2012 Year Ended December 31, 2011
Dollars in
Millions
Operating
Margin
Percentage
Dollars in
Millions
Operating
Margin
Percentage
Percent Change
in Income (Loss)
from Operations
Segments: (1)
Corporate $ 349.0 6.3% $ 331.6 6.2% 5.2%
Public 246.7 6.1 233.3 6.2 5.7
Other 18.6 3.1 17.5 3.4 6.5
Headquarters (2) (103.7) nm* (111.7) nm* 7.2
Total income from operations $ 510.6 5.0% $ 470.7 4.9% 8.5% * Not meaningful
(1) Segment income (loss) from operations includes the segment’s direct operating income (loss) and allocations for Headquarters’ costs, allocations for logistics services, certain inventory adjustments, and volume rebates and cooperative advertising from vendors.
(2) Includes Headquarters’ function costs that are not allocated to the segments.
Income from operations was $510.6 million in 2012, an increase of $39.9 million, or 8.5%, compared to $470.7 million in 2011. This increase was driven by higher net sales and gross profit, partially offset by higher selling and administrative expenses and advertising expense. Total operating margin percentage increased 10 basis points to 5.0% in 2012, Table of Contents
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43 compared to 4.9% in 2011. Operating margin percentage was positively impacted by the decrease in selling and administrative expenses as a percentage of net sales.
Corporate segment income from operations was $349.0 million in 2012, an increase of $17.4 million, or 5.2%, compared to $331.6 million in 2011. This increase was primarily driven by higher net sales and gross profit margin, partially offset by higher selling and administrative expenses, resulting in a net increase in segment operating income before allocations of $14.4 million in 2012 compared to 2011. In addition, Corporate segment income from operations benefited from an increase of $2.5 million in income allocations from our logistics operations and a decrease of $0.5 million in Headquarters' expense allocations in 2012 compared to 2011. The improved profitability of our logistics operations was driven by stronger operating leverage given higher purchase volumes while support costs remained flat.
Public segment income from operations was $246.7 million in 2012, an increase of $13.4 million, or 5.7%, compared to $233.3 million in 2011. This increase reflected higher segment operating income before allocations of $4.0 million as a result of increased net sales and gross profit dollars, partially offset by higher selling and administrative costs. In addition, Public segment income from operations benefited from an increase of $5.7 million in income allocations from our logistics operations and a decrease in Headquarters’ expense allocations of $3.7 million in 2012 compared to 2011.
Interest expense, net
At December 31, 2012, our outstanding long-term debt totaled $3,771.0 million, compared to $4,066.0 million at December 31, 2011. Net interest expense in 2012 was $307.4 million, a decrease of $16.8 million compared to $324.2 million in 2011. Interest expense in 2011 included a benefit of $19.4 million, due to an adjustment to the long-term accrued interest liability associated with the extinguishment of $1,078.0 million of senior notes due 2015. The long-term accrued interest liability represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. Of the remaining net decrease of $36.2 million, $27.2 million was due to lower effective interest rates and lower debt balances in 2012 compared to the prior year as a result of debt repayment and refinancing activities completed during 2011 and 2012. The remaining net decrease was primarily attributable to additional interest expense in 2011 related to the interest rate swaps that terminated in January 2011, higher 2011 mark-to-market losses on interest rate caps, higher amortization of deferred financing costs in 2011 compared to 2012 and a 2012 benefit related to an adjustment to the long-term accrued interest liability associated with the extinguishment of $100.0 million of senior subordinated notes due 2017.
Net loss on extinguishments of long-term debt
During 2012, we recorded a net loss on extinguishments of long-term debt of $17.2 million compared to $118.9 million in 2011.
In February and March 2012, we purchased or redeemed the remaining $129.0 million of senior notes due 2015, funded with the issuance of an additional $130.0 million of senior notes due 2019. As a result, we recorded a loss on extinguishment of long-term debt of $9.4 million, representing the difference between the purchase or redemption price of the senior notes due 2015 and the net carrying amount of the purchased debt, adjusted for the remaining unamortized deferred financing costs.
In December 2012, we redeemed $100.0 million aggregate principal amount of senior subordinated notes. We recorded a loss on extinguishment of long-term debt of $7.8 million representing the difference between the redemption price and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs.
In March 2011, we amended our senior secured term loan facility and recorded a loss on extinguishment of long-term debt of $3.2 million, representing a write-off of a portion of the unamortized deferred financing costs on this facility.
In April and May 2011, we purchased $1,078.0 million of senior notes due 2015, funded with the issuance of $1,175.0 million of senior notes due 2019. As a result, we recorded a loss on extinguishment of long-term debt of $114.1 million, representing the difference between the purchase price of the senior notes due 2015 at 109% of principal amount and the net carrying amount of the purchased debt, adjusted for a portion of the unamortized deferred financing costs.
In June 2011, we entered into a new $900.0 million senior secured asset-based revolving credit facility, replacing the existing $800.0 million facility. As a result, we recorded a loss on extinguishment of long-term debt of $1.6 million representing a write-off of a portion of the unamortized deferred financing costs related to the previous facility.
Income tax expense
Income tax expense was $67.1 million in 2012, compared to $11.2 million in 2011. The effective income tax rate was
36.0% and 39.7% for 2012 and 2011, respectively.
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44 For 2012, the effective tax rate differed from the U.S. federal statutory rate primarily due to favorable adjustments to state tax credits which are partially offset by the unfavorable impact of adjustments to deferred taxes due to changes in state tax laws and permanent differences. For 2011, the effective tax rate differed from the U.S. federal statutory rate primarily due to the unfavorable impact of permanent differences offset by a benefit for state income taxes. The lower effective tax rate for 2012 as compared to 2011 was primarily driven by the impact of favorable adjustments to state tax credits in 2012 and the lower rate impact of permanent differences in 2012 due to the significantly greater amount of pre-tax income.
Net income
Net income was $119.0 million in 2012, compared to $17.1 million in 2011. The 2012 and 2011 results included after tax losses on extinguishments of long-term debt of $10.5 million and $72.5 million, respectively. Other significant factors and events causing the net changes from 2011 to 2012 are discussed above.
Non-GAAP net income
Non-GAAP net income was $247.1 million for the year ended December 31, 2012, an increase of $48.3 million, or
24.3%, compared to $198.8 million for the year ended December 31, 2011.
We have included a reconciliation of Non-GAAP net income for the years ended December 31, 2012 and 2011 below.
Non-GAAP net income excludes, among other things, charges related to the amortization of acquisition-related intangibles, non-cash equity-based compensation and gains and losses from the early extinguishment of debt. Non-GAAP net income is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that Non-GAAP net income provides helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. (in millions) Years Ended December 31,
2012 2011
Net income $ 119.0 $ 17.1
Amortization of intangibles (1) 163.7 165.7
Non-cash equity-based compensation 22.1 19.5
Net loss on extinguishments of long-term debt 17.2 118.9 Interest expense adjustment related to extinguishments of long-term debt (2) (3.3) (19.4)
Debt related refinancing costs (3) — 3.8
Aggregate adjustment for income taxes (4) (71.6) (106.8) Non-GAAP net income $ 247.1 $ 198.8
(1) Includes amortization expense for acquisition-related intangible assets, primarily customer relationships and trade names.
(2) Reflects adjustments to interest expense resulting from debt extinguishments. Represents the difference between interest expense previously recognized under the effective interest method and actual interest paid. (3) Reflects expenses for the March 2011 amendment to the prior term loan facility. (4) Based on a normalized effective tax rate of 39.0%.
Adjusted EBITDA
Adjusted EBITDA was $766.6 million in 2012, an increase of $49.3 million, or 6.9%, compared to $717.3 million in 2011. As a percentage of net sales, Adjusted EBITDA was 7.6% and 7.5% in 2012 and 2011, respectively.
We have included a reconciliation of EBITDA and Adjusted EBITDA for 2012 and 2011 in the table below. EBITDA is defined as consolidated net income before interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, which is a measure defined in our credit agreements, means EBITDA adjusted for certain items which are described in the table below. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non- GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either Table of Contents
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45 excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance and cash flows including our ability to meet our future debt service, capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements. See “Selected Financial Data” included elsewhere in this report for a reconciliation of EBITDA to cash flows from operating activities.
(in millions) Years Ended December 31,
2012 2011
Net income $ 119.0 $ 17.1
Depreciation and amortization 210.2 204.9
Income tax expense 67.1 11.2
Interest expense, net 307.4 324.2
EBITDA 703.7 557.4
Adjustments:
Non-cash equity-based compensation 22.1 19.5
Sponsor fee 5.0 5.0
Consulting and debt-related professional fees 0.6 5.1
Net loss on extinguishments of long-term debt 17.2 118.9 Litigation, net (1) 4.3 —
Other adjustments (2) 13.7 11.4
Total adjustments 62.9 159.9
Adjusted EBITDA $ 766.6 $ 717.3
(1) Relates to unusual, non-recurring litigation matters. (2) Other adjustments include certain retention costs and equity investment income.
The following table sets forth a reconciliation of EBITDA to net cash provided by operating activities for the years ended December 31, 2012 and 2011.
Years Ended December 31,
(in millions) 2012 2011
EBITDA $ 703.7 $ 557.4
Depreciation and amortization (210.2) (204.9)
Income tax expense (67.1) (11.2)
Interest expense, net (307.4) (324.2)
Net income 119.0 17.1
Depreciation and amortization 210.2 204.9
Equity-based compensation expense 22.1 19.5
Deferred income taxes (56.3) (10.2)
Allowance for doubtful accounts — 0.4
Amortization of deferred financing costs and debt premium 13.6 15.7 Net loss on extinguishments of long-term debt 17.2 118.9 Other 1.0 6.7
Changes in assets and liabilities (9.4) (158.3)
Net cash provided by operating activities $ 317.4 $ 214.7 Table of Contents
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46 Seasonality
While we have not historically experienced significant seasonality throughout the year, sales in our Corporate segment, which primarily serves private sector business customers, are typically higher in the fourth quarter than in other quarters due to customers spending their remaining technology budget dollars at the end of the year. Additionally, sales in our Public segment have historically been higher in the third quarter than in other quarters primarily due to the buying patterns of the federal government and education customers.
Liquidity and Capital Resources
Overview
We finance our operations and capital expenditures through a combination of internally generated cash from operations and from borrowings under our senior secured asset-based revolving credit facility. We believe that our current sources of funds will be sufficient to fund our cash operating requirements for the next year. In addition, we believe that, in spite of the uncertainty of future macroeconomic conditions, we have adequate sources of liquidity and funding available to meet our longer-term needs. However, there are a number of factors that may negatively impact our available sources of funds.
The amount of cash generated from operations will be dependent upon factors such as the successful execution of our business plan and general economic conditions.
On July 2, 2013, we completed an IPO of 23,250,000 shares of common stock. On July 31, 2013, we completed the sale of an additional 3,487,500 shares of common stock to the underwriters of the IPO pursuant to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO. Such shares were registered under the Securities Act of 1933, as amended, pursuant to our Registration Statement on Form S-1, which was declared effective by the SEC on June 26, 2013. Our shares of common stock are listed on the NASDAQ Global Select Market under the symbol “CDW.” Our shares of common stock were sold to the underwriters at a price of $17.00 per share in the IPO and upon the exercise of the overallotment option, which together generated aggregate net proceeds of $424.7 million to us after deducting underwriting discounts, expenses and transaction costs.
Using a portion of the net proceeds from the IPO, we paid a $24.4 million termination fee to affiliates of the Sponsors in connection with the termination of the management services agreement with such entities that was effective upon completion of the IPO and redeemed $175.0 million aggregate principal amount of senior secured notes due 2018. The redemption price of the senior secured notes due 2018 was 108.0% of the principal amount redeemed, plus $0.7 million of accrued and unpaid interest to the date of redemption. We used cash on hand to pay such accrued and unpaid interest. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $16.7 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $14.0 million in redemption premium and $2.7 million for the write-off of a portion of the remaining deferred financing costs related to the senior secured notes due 2018.
On August 1, 2013, we redeemed $324.0 million aggregate principal amount of senior subordinated notes due 2017.
We used a portion of the net proceeds from the IPO to redeem $146.0 million aggregate principal amount of senior subordinated notes due 2017 and incremental borrowings of $190.0 million under the senior secured term loan facility to redeem $178.0 million aggregate principal amount of senior subordinated notes due 2017. The redemption price of the senior subordinated notes due 2017 was 106.268% of the principal amount redeemed, plus $12.0 million of accrued and unpaid interest to the date of redemption. We used cash on hand to pay such accrued and unpaid interest. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $24.6 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $20.3 million in redemption premium and $4.3 million for the write-off of a portion of the remaining deferred financing costs related to the senior subordinated notes due 2017.
On October 18, 2013, we redeemed $155.0 million aggregate principal amount of senior subordinated notes due 2017 at a redemption price that was 104.178% of the principal amount redeemed plus $0.2 million in accrued and unpaid interest to the date of redemption. We used a combination of cash on hand and the net proceeds from the sale of shares of common stock related to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO, in the amount of $56.0 million, to redeem the $155.0 million aggregate principal amount of senior subordinated notes due 2017, including the redemption premium and accrued and unpaid interest. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $8.5 million in the consolidated statement of operations during the year ended December 31, 2013. This loss represented $6.5 million in redemption premium and $2.0 million for the write-off of a portion of the remaining deferred financing costs related to the senior subordinated notes due 2017. See "Subsequent Events" below for a description of refinancing transactions completed during 2014.
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47 On December 2, 2013, we paid a cash dividend on our common stock of $0.0425 per share to all stockholders of record as of the close of business on November 15, 2013.
On February 13, 2014, we announced that our board of directors declared a quarterly cash dividend on our common stock of $0.0425 per share. The dividend will be paid on March 10, 2014 to all stockholders of record as of the close of business on February 25, 2014. The payment of any future dividends will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, business prospects, capital requirements, contractual restrictions, any potential indebtedness we may incur, restrictions imposed by applicable law, tax considerations and other factors that our board of directors deems relevant. In addition, our ability to pay dividends on our common stock will be limited by restrictions on our ability to pay dividends or make distributions to our stockholders and on the ability of our subsidiaries to pay dividends or make distributions to us, in each case, under the terms of our current and any future agreements governing our indebtedness.
In connection with the establishment of the MPK Incentive Plan II (the “MPK Plan”) in 2007, we agreed to make charitable contributions in amounts equal to the net income tax benefits derived from payouts to participants under the MPK Plan (net of any related employer payroll tax costs). As of December 31, 2013, we have accrued approximately $21 million related to this arrangement within other current liabilities. We expect to make the related cash contribution during the first quarter of 2014. See Note 10 of the accompanying audited consolidated financial statements for additional discussion of this arrangement.
Cash Flows
Cash flows from operating, investing and financing activities were as follows:
(in millions) Years Ended December 31,
2013 2012 2011
Net cash provided by (used in):
Operating activities $ 366.3 $ 317.4 $ 214.7
Investing activities (47.1) (41.7) (56.0)
Net change in accounts payable - inventory financing 7.4 (29.5) 250.5 Other financing activities (175.7) (308.5) (345.9)
Financing activities (168.3) (338.0) (95.4)
Effect of exchange rate changes on cash and cash equivalents (0.7) 0.3 — Net increase (decrease) in cash and cash equivalents $ 150.2 $ (62.0) $ 63.3 Operating Activities
Net cash provided by operating activities for 2013 increased $48.9 million compared to 2012. Net income adjusted for the impact of non-cash items such as depreciation and amortization, equity-based compensation expense and net loss on extinguishments of long-term debt was $413.4 million during 2013, compared to $326.8 million during 2012, an increase of $86.6 million. The increase in cash of $86.6 million reflected stronger operating results in 2013 compared to 2012. Net changes in assets and liabilities reduced cash by $47.1 million in 2013 compared to a reduction of $9.4 million in 2012, resulting in a change of $37.7 million between periods. While changes in assets and liabilities were relatively flat during 2012, during 2013, accounts receivable and accounts payable balances decreased and increased cash by $170.8 million and $146.1 million, respectively, primarily as a result of accelerated sales growth during the final month of 2013. Merchandise inventory also increased during 2013 to support strong sales order volume near the end of 2013.
Net cash provided by operating activities for 2012 increased $102.7 million compared to 2011. The increase was primarily driven by changes in assets and liabilities, resulting in a $148.9 million increase in net cash provided by operating activities between periods. Despite a 2012 fourth quarter increase in net sales of 4.9% between years, accounts receivable remained relatively flat from the prior year end driven by improved collection results, particularly within the Public segment.
Accounts receivable in 2011 represented a use of cash of $183.4 million, primarily due to a 2011 fourth quarter increase in net sales of 9.3% from the same period in the prior year. Merchandise inventory also contributed $36.1 million of the increase in cash between years driven by a return to more normalized inventory levels in 2012 following the build-up at the end of 2011 related to the hard drive shortage from the Thailand floods, along with a higher percentage of drop shipments from vendor partners and distributors in 2012 compared to 2011. Partially offsetting these factors in 2012 was a $54.1 million decrease in other assets as we collected $53.3 million in income tax refunds in 2011 that did not repeat in 2012. Net income adjusted for the impact of non-cash items such as losses on extinguishment of long-term debt was $326.8 million in 2012 compared to $373.0 million in 2011, or a decrease of $46.2 million. Improved operating performance in 2012 drove higher net income between years, but also higher net cash income taxes paid. Net cash income taxes paid in 2012 were $123.2 million compared to a net Table of Contents
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48 cash tax refund of $20.9 million in 2011. In addition to the $53.3 million in cash tax refunds received in 2011, we also fully utilized our remaining federal net operating tax loss carryforwards during 2011.
In order to manage our working capital and operating cash needs, we monitor our cash conversion cycle, defined as days of sales outstanding in accounts receivable plus days of supply in inventory minus days of purchases outstanding in accounts payable, based on a rolling three-month average. The following table presents the components of our cash conversion cycle:
(in days) December 31,
2013 2012 2011
Days of sales outstanding (DSO) (1) 44 42 45
Days of supply in inventory (DIO) (2) 15 14 15
Days of purchases outstanding (DPO) (3) (35) (32) (32)
Cash conversion cycle 24 24 28
(1) Represents the rolling three-month average of the balance of trade accounts receivable, net at the end of the period divided by average daily net sales for the same three-month period. Also incorporates components of other miscellaneous receivables.
(2) Represents the rolling three-month average of the balance of inventory at the end of the period divided by average daily cost of goods sold for the same three-month period. (3) Represents the rolling three-month average of the combined balance of accounts payable-trade, excluding cash overdrafts, and accounts payable-inventory financing at the end of the period divided by average daily cost of goods sold for the same three-month period.
The cash conversion cycle remained flat at 24 days for both December 31, 2013 and 2012. The increase in DSO was primarily driven by an increase in receivables for third-party services such as software assurance and warranties. These services have an unfavorable impact on DSO as the receivable is recognized on the balance sheet on a gross basis while the corresponding sales amount in the statement of operations is recorded on a net basis. The DPO increase was primarily due to an increase in payables for third-party services, which offsets the related increase in DSO discussed above. These services have a favorable impact on DPO as the payable is recognized on the balance sheet without a corresponding cost of sales in the statement of operations because the cost paid to the vendor or third-party service provider is recorded as a reduction to net sales. The timing of quarter-end payments also had a favorable impact on DPO at December 31, 2013. The increase in DIO was primarily due to an increase in inventory to support strong sales order volume near the end of 2013.
The cash conversion cycle decreased to 24 days at December 31, 2012 compared to 28 days at December 31, 2011, driven by improvements in DSO and DIO. The DSO decline was primarily related to improved collections in the Public segment. The DIO decline was primarily related to an increase in the percentage of products delivered to customers via drop- shipment in 2012 compared to 2011, which had the effect of increasing cost of sales without a corresponding increase in inventory-related working capital.
Investing Activities
Net cash used in investing activities increased $5.4 million in 2013 compared to 2012. Capital expenditures were $47.1 million and $41.4 million for 2013 and 2012, respectively, primarily for improvements to our information technology systems during both years.
Net cash used in investing activities in 2012 decreased $14.3 million compared to 2011. This decline was primarily due to a reduction in cash payments between years of $6.6 million related to interest rate swap agreements, as the $6.6 million paid in 2011 reflected the final payment upon termination of the swap agreements on January 14, 2011. Capital expenditures were $41.4 million and $45.7 million for 2012 and 2011, respectively, primarily for improvements to our information technology systems during both years. During 2012 and 2011, we paid $0.3 million and $3.7 million, respectively, for new interest rate cap agreements.
Financing Activities
Net cash used in financing activities decreased $169.7 million in 2013 compared to 2012. The decrease was primarily driven by various debt transactions during each period and our July 2013 IPO, which generated net proceeds of $424.7 million after deducting underwriting discounts, expenses and transaction costs. The net impact of our debt transactions resulted in cash outflows of $569.4 million and $310.6 million during 2013 and 2012, respectively, as cash was used in each period to reduce Table of Contents
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49 our total long-term debt. Debt transactions impacting each period presented are described below under "Long-Term Debt and Financing Arrangements."
Net cash used in financing activities increased $242.6 million in 2012 compared to 2011. This change was primarily driven by 2011 net inflows from accounts payable-inventory financing of $250.5 million compared to 2012 outflows of $29.5 million, resulting in a total impact on the change in cash used in financing activities of $280.0 million from accounts payable- inventory financing. The reduction in cash during 2012 from accounts payable-inventory financing was primarily due to the termination of one of our inventory financing agreements in the first quarter of 2012, with amounts owed for subsequent purchases being included in accounts payable-trade on the consolidated balance sheet and classified as cash flows from operating activities on the consolidated statement of cash flows. As discussed below under “Inventory Financing Arrangements,” in June 2011 we entered into a new inventory financing agreement with a financial intermediary to facilitate the purchase of inventory from a certain vendor. Inventory purchases from this vendor under the June 2011 inventory financing agreement are included in accounts payable-inventory financing and reported as cash flows from financing activities. The net impact of our debt transactions resulted in cash outflows of $310.6 million during 2012 and $346.5 million during 2011 as cash was used in each period to reduce our total long-term debt. Debt transactions impacting each period presented are described below under "Long-Term Debt and Financing Arrangements." Long-Term Debt and Financing Arrangements
Long-term debt was as follows:
(dollars in millions) December 31,
Interest Rate (1) 2013 2012
Senior secured asset-based revolving credit facility — % $ — $ — Senior secured term loan facility 3.25% 1,528.9 1,339.5 Unamortized discount on senior secured term loan facility (4.4) — Senior secured notes due 2018 8.0% 325.0 500.0
Senior notes due 2019 8.5% 1,305.0 1,305.0
Unamortized premium on senior notes due 2019 4.2 5.0
Senior subordinated notes due 2017 12.535% 92.5 621.5
Total long-term debt 3,251.2 3,771.0
Less current maturities of long-term debt (45.4) (40.0) Long-term debt, excluding current maturities $ 3,205.8 $ 3,731.0 (1) Interest rate at December 31, 2013.
At December 31, 2013, we were in compliance with the covenants under our various credit agreements and indentures as described below. Under the indentures governing the 8.5% Senior Notes due 2019 and 8.0% Senior Secured Notes due 2018, which contain the most restrictive restricted payment provisions in our various credit agreements and indentures, CDW LLC and its restricted subsidiaries are generally restricted from paying dividends and making other restricted payments unless CDW LLC could incur an additional dollar of indebtedness under its fixed charges ratio covenant and the amount of such dividend or other restricted payment, together with the amount of all other dividends and restricted payments made from January 1, 2011 through the end of the most recently ended fiscal quarter, is less than the sum of 50% of cumulative consolidated net income or 100% of any consolidated net loss incurred over the period plus the amount of certain other items occurring during that period that increase (and in some cases decrease) the amounts available for such payments. For the purpose of determining restricted payment capacity, consolidated net income or loss includes certain adjustments that are defined in the indentures. At December 31, 2013, the amount of cumulative consolidated net income free of restrictions under the credit agreements and indentures ("Restricted Payment Capacity") was $148.0 million. However, the transactions described below under "Subsequent Events" have since reduced the Restricted Payment Capacity to approximately $89 million.
Senior Secured Asset-Based Revolving Credit Facility (“Revolving Loan”) At December 31, 2013, we had no outstanding borrowings under the Revolving Loan, $2.2 million of undrawn letters of credit and $256.7 million reserved related to the floorplan sub-facility.
On June 24, 2011, we entered into the Revolving Loan, a five-year $900.0 million senior secured asset-based revolving credit facility, with the facility being available to us for borrowings, issuance of letters of credit and floorplan financing for certain vendor products. The Revolving Loan matures on June 24, 2016. The Revolving Loan replaced our previous revolving loan credit facility that was to mature on October 12, 2012. In connection with the termination of the Table of Contents
DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6961978
50 previous facility, we recorded a loss on extinguishment of long-term debt of $1.6 million in the consolidated statement of operations for the year ended December 31, 2011, representing a write-off of a portion of unamortized deferred financing costs.
Fees of $7.2 million related to the Revolving Loan were capitalized as deferred financing costs and are being amortized over the term of the facility on a straight-line basis.
As described in Note 5 to the consolidated financial statements, we have entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers. In connection with the floorplan sub-facility, we entered into the Revolving Loan inventory financing agreement. Amounts outstanding under the Revolving Loan inventory financing agreement are unsecured and noninterest bearing. We will either pay the outstanding Revolving Loan inventory financing agreement amounts when they become due, or the Revolving Loan's administrative agent will automatically initiate an advance on the Revolving Loan and use the proceeds to pay the balance on the due date. At December 31, 2013, the financial intermediary reported an outstanding balance of $246.8 million under the Revolving Loan inventory financing agreement. The total amount reported on the consolidated balance sheet as accounts payable-inventory financing related to the Revolving Loan inventory financing agreement is $9.3 million more than the $246.8 million owed to the financial intermediary due to differences in the timing of reporting activity under the Revolving Loan inventory financing agreement. The outstanding balance reported by the financial intermediary excludes $9.9 million in reserves for open orders that reduce the availability under the Revolving Loan. Changes in cash flows from the Revolving Loan inventory financing agreement are reported in financing activities on the consolidated statements of cash flows.
Borrowings under the Revolving Loan bear interest at a variable interest rate plus an applicable margin. The variable interest rate is based on one of two indices, either (i) LIBOR, or (ii) the Alternate Base Rate (“ABR”) with the ABR being the greatest of (a) the prime rate, (b) the federal funds effective rate plus 50 basis points or (c) the one-month LIBOR plus 1.00%.
The applicable margin varies (2.00% to 2.50% for LIBOR borrowings and 1.00% to 1.50% for ABR borrowings) depending upon our average daily excess cash availability under the agreement and is subject to a reduction of 0.25% if, and for as long as, the senior secured leverage ratio is less than 3.0. The senior secured leverage ratio is defined as the ratio of senior secured debt (including amounts owed under certain inventory floorplan arrangements) less cash and cash equivalents, to Adjusted EBITDA, a non-GAAP measure, for the four most recently ended fiscal quarters. For the four quarters ended December 31, 2013, the senior secured leverage ratio was 2.1.
Availability under the Revolving Loan is limited to (a) the lesser of the revolving commitment of $900.0 million and the amount of the borrowing base less (b) outstanding borrowings, letters of credit, and amounts outstanding under the Revolving Loan inventory financing agreement plus a reserve of 15% of open orders. The borrowing base is (a) the sum of the products of the applicable advance rates on eligible accounts receivable and on eligible inventory as defined in the agreement less (b) any reserves. At December 31, 2013, the borrowing base was $1,065.5 million based on the amount of eligible inventory and accounts receivable balances as of November 30, 2013. We could have borrowed up to an additional $641.1 million under the Revolving Loan at December 31, 2013. The fee on the unused portion of the Revolving Loan ranges from 25 basis points to either 37.5 or 50 basis points, depending on the amount of utilization.
CDW LLC is the borrower under the Revolving Loan. All obligations under the Revolving Loan are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. Borrowings under the Revolving Loan are collateralized by a first priority interest in inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5), deposits, and accounts receivable, and a second priority interest in substantially all other assets. The Revolving Loan contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Revolving Loan also includes maintenance of a minimum average daily excess cash availability requirement. Should we fall below the minimum average daily excess cash availability requirement for five consecutive business days, we become subject to a fixed charge coverage ratio until such time as the daily excess cash availability requirement is met for 30 consecutive business days.
Senior Secured Term Loan Facility
On April 29, 2013, we entered into a new seven-year, $1,350.0 million aggregate principal amount senior secured term loan facility (the "Term Loan"). The Term Loan was issued at a price that was 99.75% of par, which resulted in a discount of $3.4 million. Substantially all of the proceeds from the Term Loan were used to repay the $1,299.5 million outstanding aggregate principal amount of the prior senior secured term loan facility (the "Prior Term Loan Facility"). In connection with this refinancing, we recorded a loss on extinguishment of long-term debt of $10.3 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented a write-off of the remaining unamortized deferred financing costs related to the Prior Term Loan Facility.
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DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6971979
51 On July 31, 2013, we borrowed an additional $190.0 million aggregate principal amount under the Term Loan at a price that was 99.25% of par, which resulted in a discount of $1.4 million. Such proceeds were used to redeem a portion of outstanding Senior Subordinated Notes. The discounts are reported on the consolidated balance sheet as a reduction to the face amount of the Term Loan and are being amortized to interest expense over the term of the related debt. Fees of $6.1 million related to the Term Loan were capitalized as deferred financing costs and are being amortized over the term of the facility using the effective interest method.
Borrowings under the Term Loan bear interest at either (a) the alternate base rate ("ABR") plus a margin or (b) LIBOR plus a margin; provided that for the purposes of the Term Loan, LIBOR shall not be less than 1.00% per annum at any time ("LIBOR Floor"). The margin is based upon a net leverage ratio as defined in the agreement governing the Term Loan, ranging from 1.25% to 1.50% for ABR borrowings and 2.25% to 2.50% for LIBOR borrowings. An interest rate of 3.25%, LIBOR Floor plus a 2.25% margin, was in effect during the three-month period ended December 31, 2013.
Unlike the Prior Term Loan Facility, the Term Loan does not include a senior secured leverage ratio requirement or a hedging requirement. Additionally, the definition of debt under the Term Loan was revised to exclude amounts outstanding under our inventory financing agreements. The Term Loan is subject to certain requirements as was the Prior Term Loan Facility to make mandatory annual excess cash flow prepayments under designated circumstances, including (i) a prepayment in an amount equal to 50% of our excess cash flow for a fiscal year (the percentage rate of which decreases to 25% when the total net leverage ratio, as defined in the governing agreement, is less than or equal to 5.5 but greater than 4.5; and decreases to 0% when the total net leverage ratio is less than or equal to 4.5), and (ii) the net cash proceeds from the incurrence of certain additional indebtedness by us or our subsidiaries. The total net leverage ratio was 3.8 at December 31, 2013.
We are required to pay quarterly principal installments equal to 0.25% of the original principal amount of the Term Loan, with the remaining principal amount payable on the maturity date of April 29, 2020. The quarterly principal installment payments commenced during the quarter ended June 30, 2013. At December 31, 2013, the outstanding principal amount of the Term Loan was $1,528.9 million, excluding $4.4 million in unamortized discount.
We have interest rate cap agreements in effect through January 14, 2015 with a combined notional amount of $1,150.0 million. These cap agreements have not been designated as cash flow hedges of interest rate risk for GAAP accounting purposes. Of the total $1,150.0 million notional amount, $500.0 million entitle us to payments from the counterparty of the amount, if any, by which three-month LIBOR exceeds 3.5% during the agreement period. The remaining cap agreements with a notional amount of $650.0 million entitle us to payments from the counterparty of the amount, if any, by which the three-month LIBOR exceeds 1.5% during the agreement period. The fair value of our interest rate cap agreements was zero at December 31, 2013 and $0.1 million at December 31, 2012.
During the first quarters of 2013, 2012 and 2011, we made principal prepayments totaling $40.0 million, $201.0 million and $132.0 million, respectively, under the Prior Term Loan Facility. These prepayments satisfied the excess cash flow payment provision of the Prior Term Loan Facility with respect to the years ended December 31, 2012, 2011 and 2010, respectively.
On March 11, 2011, we entered into an amendment to the Prior Term Loan Facility, which became effective on March 14, 2011. In connection with this amendment, we recorded a loss on extinguishment of long-term debt of $3.2 million in the consolidated statement of operations for the year ended December 31, 2011. This loss represented a write-off of a portion of the unamortized deferred financing costs related to the Prior Term Loan Facility.
CDW LLC is the borrower under the Term Loan. All obligations under the Term Loan are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Term Loan is collateralized by a second priority interest in substantially all inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5 to the consolidated financial statements), deposits, and accounts receivable, and by a first priority interest in substantially all other assets. The Term Loan contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates.
8.0% Senior Secured Notes due 2018 (“Senior Secured Notes”) The Senior Secured Notes were issued on December 17, 2010 and will mature on December 15, 2018. At December 31, 2013, the outstanding principal amount of the Senior Secured Notes was $325.0 million.
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DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6981980
52 On July 2, 2013, we used a portion of the net proceeds from the IPO to redeem $175.0 million aggregate principal amount of Senior Secured Notes. The redemption price of the Senior Secured Notes was 108.0% of the principal amount redeemed, plus $0.7 million of accrued and unpaid interest to the date of redemption. We used cash on hand to pay such accrued and unpaid interest. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $16.7 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $14.0 million in redemption premium and $2.7 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Secured Notes.
CDW LLC and CDW Finance Corporation are the co-issuers of the Senior Secured Notes and the obligations under the notes are guaranteed by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Senior Secured Notes are secured on a pari passu basis with the Term Loan by a second priority interest in substantially all inventory (excluding inventory collateralized under the inventory floorplan arrangements as described in Note 5 to the consolidated financial statements), deposits, and accounts receivable, and by a first priority interest in substantially all other assets. The Senior Secured Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Senior Secured Note indenture does not contain any financial covenants.
11.0% Senior Exchange Notes due 2015 (“Senior Exchange Notes”); 11.5% / 12.25% Senior PIK Election Exchange Notes due 2015 (“PIK Election Notes” together with the Senior Exchange Notes, the “Senior Notes due 2015”) At December 31, 2013, there were no outstanding Senior Notes due 2015.
On April 13, 2011, we completed a cash tender offer (the “Initial Senior Notes due 2015 Tender Offer”) and purchased $665.1 million aggregate principal amount of Senior Notes due 2015 comprised of $519.2 million of the Senior Exchange Notes and $145.9 million of the PIK Election Notes. We concurrently issued $725.0 million aggregate principal amount of Senior Notes (as defined below). The proceeds from this offering, together with cash on hand and borrowings under the then- outstanding revolving loan credit facility, were used to fund the purchase of the tendered Senior Notes due 2015, including $665.1 million aggregate principal amount of Senior Notes due 2015, $59.9 million in tender offer premium and $36.5 million of accrued and unpaid interest, along with transaction fees and expenses.
On May 20, 2011, we completed a follow-on cash tender offer (the “Follow-on Senior Notes due 2015 Tender Offer,” and together with the Initial Senior Notes due 2015 Tender Offer, the “Senior Notes due 2015 Tender Offers”) and purchased an additional $412.8 million aggregate principal amount of Senior Notes due 2015 comprised of $321.4 million of the Senior Exchange Notes and $91.4 million of the PIK Election Notes. We concurrently issued $450.0 million in aggregate principal amount of additional Senior Notes. The proceeds from this offering, together with cash on hand and borrowings under the then- outstanding revolving loan credit facility, were used to fund the purchase of the tendered Senior Notes due 2015, including $412.8 million aggregate principal amount of Senior Notes due 2015, $37.2 million in tender offer premium and $4.5 million of accrued and unpaid interest, along with transaction fees and expenses.
In connection with the Senior Notes due 2015 Tender Offers, we recorded a loss on extinguishment of long-term debt of $114.1 million in the consolidated statement of operations for the year ended December 31, 2011. This loss represented $97.0 million in tender offer premiums and $17.1 million for the write-off of a portion of the unamortized deferred financing costs related to the Senior Notes due 2015. In connection with the issuance of Senior Notes, fees of $19.1 million were capitalized as deferred financing costs and are being amortized over the term of the notes using the effective interest method.
On February 2, 2012, we commenced a tender offer to purchase any and all of the remaining $129.0 million aggregate principal amount of Senior Notes due 2015. On February 17, 2012, we accepted for purchase $120.6 million aggregate principal amount of the outstanding Senior Notes due 2015 that were tendered. On March 5, 2012, we accepted for purchase an additional $0.1 million aggregate principal amount of the outstanding Senior Notes due 2015 that were tendered prior to the expiration of the tender offer on March 2, 2012. On March 19, 2012, we redeemed the remaining $8.3 million aggregate principal amount that was not tendered.
We funded the purchases and redemptions of the Senior Notes due 2015 with the issuance of $130.0 million aggregate principal amount of additional Senior Notes on February 17, 2012. The proceeds from this issuance, together with cash on hand and borrowings under the Revolving Loan, funded the payment of $129.0 million aggregate principal amount of Senior Notes due 2015, $7.9 million in tender and redemption premiums and $5.0 million of accrued and unpaid interest, along with transaction fees and expenses.
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DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 6991981
53 In connection with these transactions, we recorded a loss on extinguishment of long-term debt of $9.4 million in the consolidated statement of operations for the year ended December 31, 2012. This loss represented $7.9 million in tender and redemption premiums and $1.5 million for the write-off of the remaining unamortized deferred financing costs related to the Senior Notes due 2015.
8.5% Senior Notes due 2019 (“Senior Notes”)
At December 31, 2013, the outstanding principal amount of Senior Notes was $1,305.0 million, excluding $4.2 million in unamortized premium. The Senior Notes mature on April 1, 2019.
On February 17, 2012, we issued $130.0 million aggregate principal amount of additional Senior Notes at an issue price of 104.375% of par. The $5.7 million premium received is reported on the consolidated balance sheet as an addition to the face amount of the Senior Notes and is being amortized as a reduction of interest expense over the term of the related debt.
As discussed above, on April 13, 2011, we issued $725.0 million aggregate principal amount of Senior Notes and on May 20, 2011, we issued an additional $450.0 million aggregate principal amount of Senior Notes. The proceeds from these issuances together with cash on hand and borrowings under the then-outstanding revolving loan credit facility were used to fund the Senior Notes due 2015 Tender Offers.
CDW LLC and CDW Finance Corporation are the co-issuers of the Senior Notes. Obligations under the Senior Notes are guaranteed on an unsecured senior basis by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Senior Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Senior Notes do not contain any financial covenants.
12.535% Senior Subordinated Exchange Notes due 2017 (“Senior Subordinated Notes”) At December 31, 2013, the outstanding principal amount of the Senior Subordinated Notes was $92.5 million. The Senior Subordinated Notes have a maturity date of October 12, 2017.
On October 18, 2013, we redeemed $155.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 104.178% of the principal amount redeemed. A combination of cash on hand and the net proceeds from the sale of shares of common stock related to the underwriters' July 26, 2013 exercise in full of the overallotment option granted to them in connection with the IPO, in the amount of $56.0 million, was used to fund the redemption of $155.0 million aggregate principal amount, $6.5 million of redemption premium and $0.2 million in accrued and unpaid interest to the date of redemption. See Note 9 in the consolidated financial statements for additional discussion of the underwriters' overallotment option. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $8.5 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $6.5 million in redemption premium and $2.0 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes.
On August 1, 2013, we redeemed $324.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. We used a portion of the net proceeds from the IPO to redeem $146.0 million aggregate principal amount of Senior Subordinated Notes and incremental borrowings of $190.0 million under the Term Loan to redeem $178.0 million aggregate principal amount of Senior Subordinated Notes. We used cash on hand to pay $12.0 million of accrued and unpaid interest to the date of redemption. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $24.6 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $20.3 million in redemption premium and $4.3 million for the write-off of a portion of the remaining deferred financing costs related to the Senior Subordinated Notes.
On March 8, 2013, we redeemed $50.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. Cash on hand was used to fund the redemption of $50.0 million aggregate principal amount, $3.1 million of redemption premium and $2.5 million in accrued and unpaid interest to the date of redemption. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $3.9 million in the consolidated statement of operations for the year ended December 31, 2013. This loss represented $3.1 million in redemption premium and $0.8 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes.
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DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 7001982
54 On December 21, 2012, we redeemed $100.0 million aggregate principal amount of Senior Subordinated Notes at a redemption price that was 106.268% of the principal amount redeemed. Cash on hand was used to fund the redemption of $100.0 million aggregate principal amount, $6.3 million of redemption premium and $2.3 million in accrued and unpaid interest to the date of redemption. In connection with this redemption, we recorded a loss on extinguishment of long-term debt of $7.8 million in the consolidated statement of operations for the year ended December 31, 2012. This loss represented $6.3 million in redemption premium and $1.5 million for the write-off of a portion of the remaining unamortized deferred financing costs related to the Senior Subordinated Notes.
CDW LLC and CDW Finance Corporation are the co-issuers of the Senior Subordinated Notes. Obligations under the Senior Subordinated Notes are guaranteed on an unsecured senior basis by Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries. The Senior Subordinated Note indenture contains negative covenants that, among other things, place restrictions and limitations on the ability of Parent and each of CDW LLC's direct and indirect, 100% owned, domestic subsidiaries to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make distributions or other restricted payments, create liens, make equity or debt investments, make acquisitions, engage in mergers or consolidations, or engage in certain transactions with affiliates. The Senior Subordinated Notes do not contain any financial covenants.
Inventory Financing Agreements
We have entered into agreements with certain financial intermediaries to facilitate the purchase of inventory from various suppliers under certain terms and conditions, as described below. These amounts are classified separately as accounts payable-inventory financing on the consolidated balance sheets. We do not incur any interest expense associated with these agreements as balances are paid when they are due.
The following table presents the amounts included in accounts payable-inventory financing:
(in millions) December 31,
2013 2012
Revolving Loan inventory financing agreement $ 256.1 $ 248.3 Other inventory financing agreements 0.5 0.9
Accounts payable-inventory financing $ 256.6 $ 249.2
We maintain a senior secured asset-based revolving credit facility as described in Note 7 to our consolidated financial statements, which incorporates a $400.0 million floorplan sub-facility to facilitate the purchase of inventory from a certain vendor. In connection with the floorplan sub-facility, we maintain the Revolving Loan inventory financing agreement. Amounts outstanding under the Revolving Loan inventory financing agreement are unsecured and non-interest bearing. At December 31, 2013 and 2012, we reported $256.1 million and $248.3 million, respectively, for this agreement within accounts payable- inventory financing on the consolidated balance sheets.
We also maintain other inventory financing agreements with financial intermediaries to facilitate the purchase of inventory from certain vendors. At December 31, 2013 and 2012, amounts owed under other inventory financing agreements of $0.5 million and $0.9 million, respectively, were collateralized by the inventory purchased under these financing agreements and a second lien on the related accounts receivable.
Contractual Obligations
We have future obligations under various contracts relating to debt and interest payments, operating leases and asset retirement obligations. The following table presents our estimated future payments under contractual obligations that existed as of December 31, 2013, based on undiscounted amounts.
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DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 7011983
55 (in millions) Payments Due by Period
Total < 1 year 1-3 years 4-5 years > 5 years
Revolving Loan (1) $ — $ — $ — $ — $ —
Term Loan (2) 1,832.7 64.9 128.3 126.3 1,513.2
Senior Secured Notes (3) 455.0 26.0 52.0 377.0 —
Senior Notes (3) 1,915.1 110.9 221.9 221.9 1,360.4
Senior Subordinated Notes (3) 124.8 38.8 15.7 70.3 —
Operating leases (4) 89.2 17.9 30.9 19.7 20.7
Asset retirement obligations (5) 0.5 — 0.5 — —
Total $ 4,417.3 $ 258.5 $ 449.3 $ 815.2 $ 2,894.3
(1) Includes only principal payments. Excludes interest payments and fees related to this facility because of variability with respect to the timing of advances and repayments.
(2) Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates.
Interest payments for variable rate debt were calculated using interest rates as of December 31, 2013. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness. (3) Includes future principal and cash interest payments on long-term borrowings through scheduled maturity dates.
Interest on the Senior Secured Notes, Senior Notes and Senior Subordinated Notes is calculated using the stated interest rate. Excluded from these amounts are the amortization of debt issuance and other costs related to indebtedness. See "Subsequent Events" for a description of refinancing transactions completed during 2014. (4) Includes the minimum lease payments for non-cancelable leases of properties and equipment used in our operations. (5) Represent commitments to return property subject to operating leases to original condition upon lease termination.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Inflation
Inflation has not had a material impact on our operating results. We generally have been able to pass along price increases to our customers, though certain economic factors and technological advances in recent years have tended to place downward pressure on pricing. We also have been able to generally offset the effects of inflation on operating costs by continuing to emphasize productivity improvements and by accelerating our overall cash conversion cycle. There can be no assurances, however, that inflation would not have a material impact on our sales or operating costs in the future.
Commitments and Contingencies
We are party to various legal proceedings that arise in the ordinary course of our business, which include commercial, intellectual property, employment, tort and other litigation matters. We are also subject to audit by federal, state and local authorities, and by various partners and large customers, including government agencies, relating to purchases and sales under various contracts. In addition, we are subject to indemnification claims under various contracts. From time to time, certain of our customers file voluntary petitions for reorganization or liquidation under the U.S. bankruptcy laws. In such cases, certain pre-petition payments received by us could be considered preference items and subject to return to the bankruptcy administrator.
As of December 31, 2013, we do not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for these proceedings and matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, our financial condition and results of operations could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.
We previously filed a claim as part of a class action settlement in a case alleging price fixing during the period of January 1, 1996 through December 31, 2006, by certain manufacturers of thin-film liquid crystal display panels. On July 13, 2013, the United Stated District Court for the Northern District of California approved distribution of the settlement proceeds, including a net payment to us of $10.4 million after fees and expenses. We have recognized a pre-tax benefit of $10.4 million within selling and administrative expenses in the consolidated statement of operations for the year ended December 31, 2013.
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DocuSign Envelope ID: DB9CE1F5-6365-4727-A038-204B2DDBF346 7021984
56 The first of two settlement payments was received by us on July 29, 2013 in the amount of $8.5 million. The balance of $1.9 million was received in February 2014.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods.
We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
In Note 1 to the accompanying audited consolidated financial statements, we include a discussion of the significant accounting policies used in the preparation of our consolidated financial statements. We believe the following are the most critical accounting policies and estimates that include significant judgments used in the preparation of our financial statements.
We consider an accounting policy or estimate to be critical if it requires assumptions to be made that were uncertain at the time they were made, and if changes in these assumptions could have a material impact on our financial condition or results of operations.
Revenue Recognition
We are a primary distribution channel for a large group of vendors and suppliers, including OEMs, software publishers and wholesale distributors. We record revenue from sales transactions when title and risk of loss are passed to our customer, there is persuasive evidence of an arrangement for sale, delivery has occurred and/or services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. Our shipping terms typically specify F.O.B. destination, at which time title and risk of loss have passed to the customer.
Revenues from the sales of hardware products and software products and licenses are generally recognized on a gross basis with the selling price to the customer recorded as sales and the acquisition cost of the product recorded as cost of sales.
These items can be delivered to customers in a variety of ways, including (i) as physical product shipped from our warehouse, (ii) via drop-shipment by the vendor or supplier, or (iii) via electronic delivery for software licenses. At the time of sale, we record an estimate for sales returns and allowances based on historical experience. Our vendor partners warrant most of the products we sell.
We leverage drop-shipment arrangements with many of our vendors and suppliers to deliver products to our customers without having to physically hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-shipment arrangements on a gross basis upon delivery to the customer with contract terms that typically specify F.O.B. destination. We recognize revenue on a gross basis as the principal in the transaction because we are the primary obligor in the arrangement, we assume inventory risk if the product is returned by the customer, we set the price of the product charged to the customer, we assume credit risk for the amounts invoiced, and we work closely with our customers to determine their hardware and software specifications. These arrangements generally represent approximately 40% to 50% of total net sales, including approximately 10% to 15% related to electronic delivery for software licenses.
Revenue from professional services is either recognized as provided for services billed at an hourly rate or recognized using a proportional performance model for services provided at a fixed fee. Revenue from cloud computing solutions including Software as a Service ("SaaS") and Infrastructure as a Service ("IaaS") arrangements, as well as data center services such as managed and remote managed services, server co-location, internet connectivity and data backup and storage, is recognized over the period service is provided.
We also sell certain products for which we act as an agent. Products in this category include the sale of third-party services, warranties, software assurance (“SA”) and third-party hosted SaaS and IaaS arrangements. SA is a product that allows customers to upgrade, at no additional cost, to the latest technology if new applications are introduced during the period that the SA is in effect. These sales do not meet the criteria for gross sales recognition, and thus are recognized on a net basis at the time of sale. Under net sales recognition, the cost paid to the vendor or third-party service provider is recorded as a reduction to sales, resulting in net sales being equal to the gross profit on the transaction.
Our larger customers are offered the opportunity by certain of our vendors to purchase software licenses and SA under enterprise agreements (“EAs”). Under EAs, customers are considered to be compliant with applicable license requirements for the ensuing year, regardless of changes to their employee base. Customers are charged an annual true-up fee for changes in the number of users over the year. With most EAs, our vendors will transfer the license and bill the customer directly, paying resellers such as us an agency fee or commission on these sales. We record these fees as a component of net sales as earned and Table of Contents
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57 there is no corresponding cost of sales amount. In certain instances, we bill the customer directly under an EA and account for the individual items sold based on the nature of the item. Our vendors typically dictate how the EA will be sold to the customer.
From time to time, we sell some of our products and services as part of bundled contract arrangements containing multiple deliverables, which may include a combination of the products and services. For each deliverable that represents a separate unit of accounting, total arrangement consideration is allocated based upon the relative selling prices of each element.
The allocated arrangement consideration is recognized as revenue in accordance with the principles described above. Selling prices are determined by using vendor specific objective evidence (“VSOE”) if it exists. Otherwise, selling prices are determined using third party evidence (“TPE”). If neither VSOE or TPE is available, we use our best estimate of selling prices.
We record freight billed to our customers as net sales and the related freight costs as a cost of sales.
Deferred revenue includes (1) payments received from customers in advance of providing the product or performing services, and (2) amounts deferred if other conditions of revenue recognition have not been met.
We perform an analysis of the estimated number of days of sales in-transit to customers at the end of each period based on a weighted-average analysis of commercial delivery terms that includes drop-shipment arrangements. This analysis is the basis upon which we estimate the amount of sales in-transit at the end of the period and adjust revenue and the related costs to reflect only what has been received by the customer. Changes in delivery patterns may result in a different number of business days used in making this adjustment and could have a material impact on our revenue recognition for the period.
Inventory Valuation
Inventory is valued at the lower of cost or market value. Cost is determined using a weighted-average cost method.
Price protection is recorded when earned as a reduction to the cost of inventory. We decrease the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. If future demand or actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.
Vendor Programs
We receive incentives from certain of our vendors related to cooperative advertising allowances, volume rebates, bid programs, price protection and other programs. These incentives generally relate to written agreements with specified performance requirements with the vendors and are recorded as adjustments to cost of sales or inventory, depending on the nature of the incentive. Vendors may change the terms of some or all of these programs, which could have an impact on our results of operations.