Why Do California State Employees Need $423K Worth Of iPads?

In retail and food service, the iPad has become the pricey accessory of choice for point of sale systems. But various state agencies in California are now having to explain why they spent piles of cash on the popular tablet computers.

According to the San Francisco Chronicle, in just the last year and a half, state agencies have spent a total of $423,000 on iPads — and they don’t appear to be paying bulk prices.

For example, the Dept. of Veterans Affairs spent $95,000 for 127 iPads. That’s more than $748/iPad. Considering that you can get the base model for $499, that means the agency either overpaid by a huge amount or maybe got a slight deal on the top of the line 64GB 3G model that normally retails for $829.

And Veterans Affairs isn’t the most flagrant spender. Somehow, the Board of Equalization thinks that an iPad is worth $1,055… even when buying 62 of them. And the Caltrans crew was apparently snookered into paying $1,117 each for their 30 iPads.

Earlier this summer, the Dept. of Motor Vehicles, which can’t even keep its website operating, was forced to return about half of the 24 iPads it had purchased.

A rep for Governor Jerry Brown, whose call for agencies to trim back on such frivolous spending has apparently landed on deaf ears, says that some of the iPads are being used by doctors and engineers in the field and are being purchase in lieu of laptops.

But that doesn’t make much sense, given that you can buy a decent netbook for a fraction of the prices these agencies are overpaying for iPads. Even the least expensive 3G iPad is only $629. Surely if you’re buying dozens of the devices, you should be able to get a discount on the device.

State agencies spend $423,000 on iPads [SFgate.com]

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  1. Coffee says:

    I recently received the new Google Nexus and love it, but I can’t see myself using it for anything particularly useful at work, and I work a “white collar” position. I know at least one person I work with who received an ipad for work, then later returned it in favor of a laptop because while clunkier and heavier, laptops are for more work friendly for the casual user.

    • MaxH42 needs an edit button says:

      I don’t need mine for work, but I bring it to meetings, take notes on it, and sometimes pass it around when we are discussing a web page so we can all look at it. I also find it’s nice not to have a laptop screen largely blocking me from the rest of the people around the table.

    • who? says:

      I have a job where I’m up and walking around a lot, but still need instant internet access. Before I got the Nexus 7, I was using my phone. The 7″ tablet is so much better for that kind of thing.

    • FigNinja says:

      I can see using it if you move around a lot and need to have access to a lot of documents but you have less of a need to input data. I don’t even move around at work and I love it for tech books.

      I do also have a handy Bluetooth keyboard for my Nexus 7 (Logitech), so when I do want to bang out some emails, I can do it quickly. My last couple of trips, I took the Nexus 7 and my keyboard instead of a laptop.

      I also wonder if they evaluated who really needed mobile wireless and who could’ve done just fine with WiFi.

  2. HeadsOnPikes says:

    I see the overpayment as the problem not the mere fact that $423K was spent on iPads as the headline suggests. Nobody would blink at an agency spending that amount of money on computers and if these can be more efficient and cost-effective than computers, then why not?

    Paying more than they’re worth? That’s obviously a different problem altogether.

    • YouDidWhatNow? says:

      …because *actual* computers would cost a lot less, and be a lot more useful.

      • who? says:

        That would imply that you know what the iPad is being used for. Do tell….

        • jeepguy57 says:

          We can only speculate, but I can’t imagine how many government jobs would be better suited with an iPad than a PC. I have both for my job (corporate, not government) and if I had to give one up, it would be the iPad. Its great for consuming info and quickly replying to email or looking something up on the go, but thats it. Forget typing a long email, editing an excel slreadsheet or creating a presentation. We are giving our field sales reps iPads but still finding they need PCs to do a good chunk of their work.

        • Mambru says:

          Why would you need an ipad at the DNV?

  3. TheMansfieldMauler says:

    LOL at anyone surprised at this.

    Kickbacks? In my kalifornia?

  4. Mike says:

    Unless you know something I don’t there isn’t really bulk pricing on iPads. Apple doesn’t really provide discounts. Okay, has a higher ed customer I can get a 5% discount on a 10 pack on non-WiFi iPads. Whoopee. Maybe if you’re a huge volume customer but than again I would only expect a few percent. There’s a reason Apple is sitting on a hundred billion dollars of cash.

    • Pal says:

      Apple actually has special pricing for education, business, and you guessed it, government/military. You can find it on the left nav of their online store.

      “The Apple Store for Government offers powerful desktop and portable computer solutions at special prices for government agencies and employees.”

      • kathygnome says:

        Go click on it and you’ll find out the discounts are meager.

        • cactus jack says:

          When you are spending $423K, a meager discount is significant.

          • Overheal says:

            Indeed. I’m guessing it’s down to lack of oversight and centralized buying. It’s more along the lines of “I need one to do my job!” “Uh, ok… go to the store and buy one?”. Lack of research on the part of these bodies, tbh, if there are these discounts to be had.

      • Mike says:

        Yeah, basically $50-$100 on notebooks and desktops, and nothing on iPads and iPhones. You can get discounts above that but it won’t be more than 5-10%.

  5. who? says:

    Playing devil’s advocate here (don’t know the situation well enough to know if the state is being wasteful or not)…in a lot of companies, when you order a piece of hardware or software, there’s basically an IT “tax” applied to the purchase, which pays for the overhead of having IT set the thing up, install software, get it configured to work on the network, and educate the users on how to use the thing. You’d think that “tax” wouldn’t be much for an iPad, but usually it’s the same rate for every purchase, and is based on previous years’ costs. When I purchase hardware or software at my company, I have to add about 20% to the purchase price. The state’s numbers mostly don’t sound out of line with that.

    Also, iPads are becoming commonplace within private companies, and a lot of iPad apps are being written that fill the needs of particular industries and occupations better than laptops or paper alternatives. Why would state government be any different?

    • CheritaChen says:

      Because the state in question is essentially bankrupt?

      • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

        That’s what I thought. it seems like if they have billions in budget deficits, spending this much money on iPads is a little questionable. You’d think they could get by on the computer equipment they already have for the time being.

        • Damocles57 says:

          Having worked for a governmental organization and being forced to use bidding procedures designed by some committee, it does not seem out of line that the cost of the items purchased might seem higher than what a purchaser of a single user might be able to find after some searching.

          Having wasted days and weeks and dollars on following statutory bidding rules, I sympathize with any organization that has to work within that system. I could have saved many dollars and many days by purchasing what was needed directly. Just remember that these rules are in place to keep the public buyers from funneling all the governmental purchases to a group of friends or family. Would you be as willing to have the same rules applied to your private business?

          Additionally, the equipment may have hardware/software configured to match specific requirements, may include training, always includes warranties, might include the next wave of upgrades, etc.

          And, it is also possible that they “got by” on pieces of junk for long that by the time they had to upgrade it also meant an upgrade to infrastructure to support the newer equipment.

          All organizations, public or private, need equipment to function. You might be the first to complain if you had to wait an extra 30 minutes at some window while the stupid, lazy, technologically backward government worker had to reload a stack of Hollerith cards to process your request.

          • CheritaChen says:

            While I don’t work directly with purchasing, I am peripherally familiar with our budget practices. (I work for a county government.) We’ve had 2 division-wide desktop hardware upgrades since I started here, and none in the last 5 years. We did, however, get a rollout of VoIP phones which were apparently contracted before the economy tanked. I do understand there are delays and that we all need relatively current equipment to keep pace for the people we serve. But really…why on earth would so many employees in any one department have a legitimate need for a high-end gadget? Heck, here they limit the smartphones to top-level management only. Anyone else gets the basic stuff, if they qualify for one at all.

            I think there may be some jobs where tablets are actually cost effective. I just doubt very seriously that the State of California has quite as many of those as it seems to think it does.

    • Jacquilynne says:

      This, plus, the overhead costs of the procurement department are sometimes passed along to the purchasing department in the cost of the item charged to the department that ordered it, as a percentage of the price, or a set charge.

    • Pre-Existing Condition says:

      It’s basically the same thing where I work.

      If a piece of off-the-shelf equipment is $1,000, we’ll typically pay $1,300 for an extended service contract and warranty. The cost of training, setup, and insurance against damage is built into the price, so the total cost-of-ownership can be a known cost.

    • nXt says:

      Same here. At my “company”, the Price of the iPad bought is the iPad + insurance + a very protective case + management app license. We run a server side program that can track the iPads, remotely install apps, etc.

  6. PXAbstraction says:

    But affordable laptops aren’t sexy and fashionable like iPads are! Why does no one care about the fashion image of state employees?!

  7. HogwartsProfessor says:

    I’d love a tablet, but there is NO WAY it would replace my laptop. I see it as an entertainment device.

  8. Michael Belisle says:

    Netbooks? Do they still make those?

    More seriously, if you’re working in the field, sometimes it’s nice to not have to sit down or find a place to rest a laptop to take a note or enter info in a chart. A better question is why did they buy an iPad over, say, a Galaxy Tab?

    • who? says:

      Two things…apps and security.

      A lot of “professional” iPad users use iPads because there’s a specific iPad app that they need.

      Also, in the area of security, iPads are light years ahead of Android devices.

      • Invader Zim says:

        “iPads are light years ahead of Android devices.” Provide an example? I don’t know of any single ipad that has a finger scanner. Further more, companies that spend 423K on laptops because of an app, can easily buy aAndroid devices and use a fraction of the difference to get said developers to write an app for their android system. Still having oodles of change left over. How do I know I work in the IT field and we had a choice of product and chose Android over Ipad for those very same reasons. We even paid developers to write apps just for us.

        • who? says:

          Yeah, you can buy cheap android devices, or cheap laptops, and in the short term you’ll save some money, but you lose on security. I work in computer security, and finding security holes in stuff is part of my job. Basically, it’s about the OS level security of the device. If you have physical access to an android device, it’s game over. The device is easy to root, and once the device is rooted, the attacker has full access to the entire hard drive, including the parts that were “supposed” to be encrypted. A recent iPhone or iPad is not so simple. The encryption keys are held in the keychain. There have been attacks on the iOS keychain, but the iOS keychain has to be thoroughly broken yet. The other thing is that iOS devices are regularly upgraded to the latest version of iOS, with all the latest patches Android devices tend to be months, if not years, behind on patching.

          As an example, the Feds admitted that they are having trouble getting data off of iOS devices.

          This guy knows his stuff:

          http://www.zdnet.com/blog/security/charlie-miller-on-android-vs-ios-security/9698

          Buying a cheap, consumer grade laptop is the same problem. You save some cash up front, but with business grade laptops, you get a laptop that has a TPM module, and a copy of Windows that runs bitlocker, so the laptop can be encrypted easily.

          http://datalossdb.org/statistics has data breach reports. If you start looking at the data breach reports, a startling percentage of them are lost or stolen hardware. So having hardware that can withstand being poked and prodded is surprisingly important.

          • dcatz says:

            As a self-professed security expert, you should know better. Physical security is a myth; anyone that has physical to a device is not going to be stopped by any technological measures; all you will do is slow them down. Even TPM will not save you from a cold boot attack.

            Proprietary software, such as BitLocker, should not be trusted to keep your data secure as you have no way of verifying either the security of the good or whether there are any backdoors.

            iBads and iGroans are malicious devices that set the precedent that a faceless corporation, such as Apple, rather than you (the owner of the device) what you can and cannot install on your device that you spent your money on.

      • Oh_No84 says:

        Actually Ipads are behind Android devices for features.
        1. they all basically have the same or similar apps
        2. Android can be used as a usb drive to quickly copy files to any computer, Ipads require itunes to interface to a computer which is a huge negative for business users that need to quickly copy files.

  9. PragmaticGuy says:

    Yeah, but at least they’re not spending $600 on a $10 hammer.

  10. Pre-Existing Condition says:

    I can’t speak for the State of California but at my firm, our field personnel use tablets to aid in data entry. When our techs can record data as it’s collected, they don’t need to spend time in the evening performing data entry with their computers.

    We also typically pay above market price for equipment because there’s generally a service contract built into it. We can generally bill a service contract or warranty to a specific contract (T&M), while repairs come out of overhead. Also, when budgeting projects, it allows us to give very accurate projections when repairs or service are built into the initial outlay.

  11. brshoemak says:

    Well, California had to do SOMETHING with its massive budget surplus.

  12. erinpac says:

    A decent chunk of those may also be development devices, possibly with associated service, training, development licenses, and/or software costs. A lot of government branches are pushing for that sort of thing, and there have also been a lot of tech in IT pushes (web cam checkups, online health records, etc).

    They aren’t cheap, but there are a LOT of people in something like the VA. They could easily have 127 legitimate reasons (or a tad less with some backup stock) for them.

  13. pinkbunnyslippers says:

    if anyone else here has worked for a federal or SLED VAR, they can tell you that the margins in selling Apple are abysmal. The VA price for their iPads is legit; I know they require 3G on most of their iPad purchases and have to most likely procure them through a multi tier system including Verizon and a reseller. After minimal markups and AppleCare+ $748/iPad sounds about right.

    Now whomever is selling CA their iPads…that’s a whole other story and the state is getting straight out robbed. Chances are they paid extra for professional services attached to those iPads, but even still…shame on CA.

  14. dush says:

    Apple does no government discount. They don’t need to.

  15. JediZombie says:

    Or they can buy the (arguably better) ASUS Transformer with keyboard dock, get off cheaper still and have the best of both worlds.

  16. NotEd says:

    iPads can be used to control confernece room automation systems, and might end up being cheaper then dedicated devices made for that purpose if they are purchased at list price.
    Of course at the prices listed here I really doubt that is what is going on unless there is an additional cost per unit for installing and configuring the control software.

  17. wackydan says:

    They may be buying iPads instead of laptops but bundling in the BT keyboards and accessories which makes the prices look higher. They are a good product and make an excellent tool – If they are truly needed by the employee.

  18. Kate Blue says:

    I’ve never had any problem getting into the DMV site.
    And I wouldn’t assume that the prices stated are just for Ipads and not for other things rolled into that price too.
    I certainly don’t see them as a luxury. I know we have a hard time getting them when we have to write web pages that have to be tested on them.

  19. madmod20061 says:

    I work for the State of California. Where’s my Ipad?

  20. Overheal says:

    Well as a Best Buy employee this isn’t hard to figure out: we get government employees in all the time. Usually teachers or department heads, in which their employers tell them to go and buy one and they will be compensated. Oftentimes they will throw an allowance in for extras like the case or the stylus, even a service plan, but just as many want the iPad and nothing but, which is also understandable, especially as most agencies would consider the things disposable, and tax dollars to be infinite…

    “Bulk Discounts?” …. believe me, the first thing I thought of and the first thing I explored the first time I encountered such a customer: unfortunately, unless they contact Apple directly and Apple wants to do it, it’s not going to happen. It’s certainly not something Best Buy is allowed to do – neither through it’s retail nor it’s BBFB (for business) channel and I’m sure no other retailer for that matter is going to be allowed to either. Apple is pretty strict about it’s policy of Universal Minimum Retail Pricing (UMRP) – and the trend is growing among brands, like Sony and Samsung, to perform similar practices.

    • Overheal says:

      As pointed out by another reader, Apple has govt discounts, but apparently nothing wholesale. Just went to their government page and added 500 iPad 64GBs to a shopping cart, and they didn’t even take a penny off.

  21. Abradax says:

    423k worth? Thats like 7 of them.

    • Libertas1 says:

      I was going to post something similar and say it was 5 of them, but I didn’t want to exaggerate things. Thanks for doing the math for me :)

  22. Carlee says:

    There was a report a while ago about cellphones being bought by CA state agencies and about 1/2 of them going unused (but the depts were being charged monthly fees anyway) – I wouldn’t be surprised if this was a similar situation. Or our county child welfare dept, who purchased a bunch of mobile-enabled laptops, but many of them went unused. Depts decide they want the latest gadgetry to do xyz, but don’t really know what to do with it once the gadgets arrive. And then the gadgets just sit there (or “disappear”).

    As for the iPads costing more than for retail – I don’t know exactly how it works for the state govt, but at our state university (in CA), any overhead or maintenance agreement charges wouldn’t be counted towards the purchase price. Whatever the price is on the quote (or website), that’s the purchase price, plus tax (if applicable) and shipping. If the discrepancy in prices is because of maintenance agreements or what not, the agencies should have no problem detailing the breakdown of the costs. Assuming they wanted or were required to, that is.

  23. Duke_Newcombe-Making children and adults as fat as pigs says:

    In defense of California, having worked for the state of California and having purchased Apple products, Apple is notoriously stingy with their discounts, for everyone–you see the same mentality in the commerical sphere, even for bulk purchases. The only exception: education purchases–and even then, maybe a 15% discount, if that.

    Having said that, until there’s more information regarding the number and type of iPads, I personally don’t have enough info to fully bake an opinion on this story.

  24. weave says:

    Where I work a department snuck in a large order of 64 gig iPads, bypassing IT. I freaked when I found out. Me: “You could have gotten the 16 gig model for $200 less.” Them: “We need to run scientific software so the extra memory is needed for better performance.” Me: “IT DOES NOT WORK THAT WAY YOU DOLTS.” Sigh….

  25. GodfreyOriole says:

    wow people need to make sure they know what they are talking about before bashing .

    You do know that apples warranty ontop of the ipad is $99 right so that $748 per ipad would actually be $648 .

    Also you do know ipads are ALOT cheaper then panasonic toughbooks with touchscreens right?

  26. Jay911 says:

    I don’t see a big problem with having iPads (or any other tablet computer). My fire department uses iPads in two functions: One, on the truck, we can reference information like hazardous materials lookup/definitions, medical knowledge and reference, and fire/rescue information, as well as using the device as a data gathering tool (i.e. taking notes about the incident), and in the station, we use them to replace a myriad of paper forms and previously-unrecorded information – example, when we check the inventory of equipment on a fire truck, it’s now recorded into a master database, and if consumables like filter masks, IV sets, rehab supplies (drinks/energy bars/etc) need replacing, or if vehicles need attention (cracked windshield, oil change due, etc), that is not only reported on the tablet and recorded in the database, but the proper personnel (procurement officer/maintenance officer/etc) is immediately notified by email.

    As for netbook vs. tablet, a tablet can be held in one hand more easily than a netbook (except perhaps the kind whose screen folds over in the open position), the tablet has a built-in camera we can use on incident scenes (whereas netbook cameras are more often designed for use as a teleconferencing webcam), and few netbooks offer 3G connectivity for when I’m standing in the middle of the road wondering what the glowing yellow substance leaking out of the tanker a thousand feet up the highway is. :)

  27. acatchyscreenname says:

    At the place where I work (higher ed in Calif.), there is a green/sustainable office initiative where they are attempting to go the paperless office with the use of IPads. The catch is that Apple’s “bulk” discount is a paltry amount, either $20 or $50 if I recall correctly. Ideally, the Ipads pay for themselves in two years via paper/toner and other supply costs.

  28. dreamking says:

    It’s like an old man wrote this article. Why should ipads be magically different than any other piece of equipment that potentially makes employees more productive? I’m not say it does or it doesn’t in this case, but pennypinching over the slightly higher-than-retail price seems ludicrous, bordering on childishness. Especially when you leave out any insurance or typical accessory case.as the possible reason.

    I work in higher ed. I’ve heard ALL the justifications for getting an iPad. honestly, if the hardware lifecycle is such that the department is paying, the hardware is due for refresh and they opt for an iPad instead of a new laptop, I don’t care. I get less incidents reported on ipads than I do on laptops. They’re still expected to get work done. No boss is going to accept ‘it took me 14 hours to make a presentation on the ipad’. If it makes them more accessible, happier and responsive why not?

    I don’t buy the implicit premise that because they’re state employees they should be forced to make do with 6 year past end of life gear. And I don’t see anything sinister in the pricing.

  29. Jevia says:

    Its one thing with the grocery store self-checkout machines go buggy. Usually I’m not under a time deadline getting home. But I think that having such a potential problem at an airport is fraught with potential problems, and very stressed out and angry passengers who are then caused to be late to their planes. Not to mention the ease that the airline will then blame the passenger if the bag is lost.