Update: After some discussions with Amazon and the State Department, we've learned the price tag on the Kindle contract is not as cut and dry as we first reported. The contract authorizes the State Department to pay Amazon up to $16.5 million over five years for an English-language teaching program and the 2,500 Kindles cited in the procurement documents has been described to us as merely the initial order. We do not know the maximum amount of Kindles the State Department can purchase in their deal with Amazon. Still, it's clear that our $6,600-per-Kindle calculation is not accurate. Previously: we reached out to the State Department's Philippe Reines, who emailed to say that the department was getting the actual Kindle devices for 10 percent off retail price. The rest of the cost goes to cover the service and content-providing agreements in the department's four-year contract with Amazon.
Original: IPads are too fancy, Nooks aren't fancy enough, but Kindles are just right for teaching English, the State Department thinks, which is why it bought 2,500 of them from Amazon in a $16.5 million no-bid contract, NextGov's Dawn Lim reports. That works out to $6,600 per Kindle Touch -- a lot more than the $189 retail price.
The plan, according to Kim, is to send the e-readers to "designated libraries and U.S.-friendly educational centers around the world." Kindles were the only ones that would do because they "come with a built-in English dictionary, support foreign languages, translate text to speech, and receive information securely from a content distribution platform managed by the State Department, procurement documents stated." The other readers couldn't bring all those functions, and iPads came with unnecessary bells and whistles that represented a security risk, NextGov reported, via a government procurement document.
But back to the price: That's an enormous mark-up for each device. PaidContent's Laura Hazard Owen explains what the government is getting for its money, in addition to the hardware:
Amazon is responsible for shipping the Kindles, providing 24-7 customer service, sharing data on how the Kindles are used to access content and pushing serialized content to the Kindles regularly. Amazon is also responsible for disabling "standard features, as as [sic.] requested by DoS, for the device such as individual purchasing ability."
And all for just a 35-fold markup. What a steal.