WITH STATE AND LOCAL governments being asked to stretch technology budgets, agencies have found creative ways to recoup some of the value of their used and excess IT equipment.
Instead of dumping unneeded hardware that may have residual value — a tactic that’s increasingly difficult for agencies to adopt given growing budgetary, security and environmental concerns — government agencies are turning to IT recycling programs and companies that handle recycling to maximize their return on IT investments.
Offering suites of IT asset management services, these specialty companies remove unwanted IT equipment, certify the wiping of hard drives, and then resell, donate or recycle the machines in accordance with Environmental Protection Agency requirements. At the end of the process, agencies obtain credit toward new IT purchases.
These programs enable government agencies to add extra dollars to their IT budget at the end of the hardware lifecycle. They can also lower overall IT procurement costs, and updated inventory data helps meet asset management and planning goals.
Here’s how the programs work and how state and local governments are benefiting from them.
Recycling: New York Style
The Center for Information Technology and Evaluation Research (CITER), a department of New York state’s Office of Mental Health (OMH), is responsible for the agency’s IT budget, as well as IT procurement, and contracts across 28 agency sites statewide, including 26 hospitals.
Each year, CITER purchases approximately 2,800 new PCs and replaces 20 percent of OMH’s printers as they reach the end of their five-year lifecycle. Last year, Lou Yellen, director of administration at CITER, participated in a Hewlett-Packard trade-in program through his department’s equipment supplier. The program not only saved time and effort, but netted his agency a credit of nearly $15,000.
“Before we started this program, we didn’t receive any money for the old equipment,” Yellen recalls. “We would do the paperwork, surplus it, and the state’s Office of General Services would pick up the equipment and dispose of it. But with this program, we recouped $13,500 on the old printers and used that as credit toward our purchase of more than a thousand new printers.”
These are welcome dollars for any agency, but Yellen believes the fiscal benefits of such programs go beyond recouping residual value.
CITER maintains a centralized equipment inventory, so before it participated in this program, the recycling and disposal process was paper-intensive. All 28 sites had to write down serial numbers, update an electronic database and then notify the maintenance vendor to remove the equipment from the maintenance contract.
“The trade-in program creates a database for us with the make, model and serial number of the equipment picked up,” Yellen explains. “The vendor sends us that file so we can do an automatic update of our database. It’s much quicker and saves us even more money. The vendor even looks after data cleansing and ensures that equipment is disposed of in an environmentally responsible way.”
CITER equipment that is no longer covered by warranty is maintained, under a paying contract, by the maintenance firm. The sooner CITER can remove the excess IT equipment from this contract, the more dollars it can save.
“Anybody planning a decent-sized rollout of new equipment should look at this program as a way to save some money and a lot of work,” Yellen advises.
Maximizing Tax Dollars
Founded in 1992 as Access Direct, AnythingIT (AIT), located in Fort Lee, N.J., runs a buy-back program designed to help state and local government agencies recoup the residual value from their used IT equipment. The firm’s three processing centers — in Philadelphia, Dallas and Colorado Springs, Colo. — handle many public sector clients.
In 2002, the General Services Administration awarded AIT its Schedule 70 award, which allows all federal, state and local government agencies to use AIT’s trade-in, IT asset disposition and retirement services.
“I love the work that we do in the public sector,” says Paul Brundage, AIT’s senior vice president, sales. “The thing that really grabs me is that we’re maximizing tax dollars. Since tax dollars are being used to purchase new IT products, agencies that can recoup some of the value of their excess and surplus assets can do more with their existing budgets. This is a fiscal issue, and the dollar value that’s gained can be staggering, running into tens of thousands.”
When obsolete or excess equipment arrives at an AIT facility, it is fully audited and assessed. AIT creates detailed asset inventories for each customer that show the exact amount of money the agencies are making on each asset and transaction.
AIT cuts a check for every working system over and above its services cost. The purchase price is fixed, provided the equipment arrives in working condition and is received within an agreed-upon period of time.
The proceeds from the sale of that equipment are then put on account with the agency’s IT equipment supplier, where the funds will remain for a defined period of time. In the event that the agency doesn’t use those proceeds, the funds are turned over to the state.
Beefing Up the Budget
Another firm that offers organizations a way to get cash back on their old IT equipment is International Business Commodities (IBC) in Dedham, Mass.
“I stress to customers that their hardware is literally like melting ice,” says Melanie Kelfer, IBC’s president. “It’s losing value every day. We provide a way for public sector agencies to create additional dollars in their budget by buying back all of their existing hardware that has residual value.”
Founded in 1989, IBC managed IBM’s trade-in referral program for almost 13 years, and a large percentage of its business involves working with public sector organizations.
“Our cash-back program helps state and local governments maximize the return on their IT investments and create additional dollars in their budget,” Kelfer explains. “Within 10 days of testing, we will cut a check and send it to the customer, their supplier or back to IBM.”
IBC offers cash back for any parts and systems that have residual value, and recycling services for hardware that has become obsolete.
IBC’s Web site, www.pctradein.com, provides price quotes on IT hardware via a quote request form. (For more information, see “IT Takeaway” above left.)
Recycling IT equipment makes a lot of sense from both an environmental and a budgetary point of view. And for everyone involved in the transaction, that sounds like a win-win situation.
The International Business Commodities (IBC) cash-back program involves four steps:
1. Submit trade-in quote request. Agencies go to the IBC Web site and use an online form to describe the equipment they have available.
2. Receive price quote. Quotes are valid for one week, but can be extended for up to 30 days by written request.
3. Prepare equipment for pickup or shipment to IBC’s consolidation facility. IBC can coordinate transportation logistics for 100 or more PCs, or for one or more midrange or mainframe hardware units that are loading-dock accessible. Agencies with small quantities can ship directly to IBC’s receiving facility.
4. Receive payment. Within 10 days of testing, cash-back proceeds can be sent to the vendor, reseller or user.
Emmet Cole is a freelance technology writer based in Austin, Texas.