State Dept. Cancels $16.5M Kindle Contract 117
itwbennett writes "The U.S. Department of State will be canceling a $16.5 million Amazon order that included 2,500 Kindle Touch e-readers, 50 pieces of content, and 'required provision of a secure, centrally managed content distribution and management platform.' The department said that it will be re-examining its requirements for the program. Those requirements had called for a single-function device with text-to-speech, a 'battery life of no less than about 8 hours of continuous reading or approximately 7.5 hours of video playback,' and free Wi-Fi. The Kindle was the only project that met that original set of requirements."
sucks to be Amazon (Score:5, Interesting)
Re:sucks to be Amazon (Score:5, Interesting)
wonder who they ticked off this time
Eh, someone up the food chain realized that they weren't buying ipads, and those are what the cool kids have. Cue the story about them opening a contract with apple to do the same exact thing, only for double or triple the cost.
They're doing that here in California. Our state budget left the rails and took out every major city, and we're letting go of teachers left and right. But we found money to buy 5 ipads for every classroom from one of those buckets where the money can only be spent one way. No integration, no IT strategy...just 5 paperweights with a quiz on them about a book, and you have to transcribe the results from the ipad to a piece of paper when you're done, as there is no rollup.
I just want to know what person sits in what office in the state organization that agreeably says "Oh, you want to donate money to our schools? Yeah, well those ipads would be pretty much useless...feel like funding something critical thats being cut or how about we buy cheaper tablets, get 20 per class instead of 5, and get someone to do a nice integration job with our curriculum?
We missed a prime opportunity last year when HP (a california company) decided to get out of the touchpad business and sold tens of thousands of them for below cost. Someone from the state should have gotten them to donate them, make more so every kid could have one, and build the software and support infrastructure with that. Replace all textbooks and teaching materials with the pad. Give HP tax credits so its worth it for them to take it on. Hell, it took the NFL no time at all to switch from playbooks and lots of pieces of paper to a tablet solution. If they can do it, I'm pretty sure HP and the state of california could have done it.
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Idk how it can be double or triple the cost. At $16,500,000 for 2500 kindle(assuming that's correct), it's already at $6,600 per kindle. If the majority of the costs are just side costs, then iPads will just raise it marginally.
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Idk how it can be double or triple the cost. At $16,500,000 for 2500 kindle(assuming that's correct), it's already at $6,600 per kindle. If the majority of the costs are just side costs, then iPads will just raise it marginally.
Who said the original poster was mathematically competent?
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Idk how it can be double or triple the cost. At $16,500,000 for 2500 kindle(assuming that's correct), it's already at $6,600 per kindle. If the majority of the costs are just side costs, then iPads will just raise it marginally.
Any time you take a contract thats been in existence for a while and re-do it with a new supplier that uses more expensive hardware, you can pretty much count on a significant increase in the project cost.
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I would like to see a tablet that is capable of 7.5 hours of video playback. Heck, I would like to see any device that is capable of that without recharging.
Spec'd the Kindle (Score:5, Insightful)
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Seriously, on the "back" of a contract for 2,500 Kindles? What kind of "payoff" do you think they'd get for negotiating a 2-3,000 piece contract for an item the gov't would by at or below retail?
I think their real goal was to try and avoid the political stigma of a set of requirements that would lead them to buying a couple thousand iPads (while being good/great devices have so many additional uses that their purchase could easily be attacked politically)...
Re:Spec'd the Kindle (Score:4, Insightful)
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Seriously, on the "back" of a contract for 2,500 Kindles? What kind of "payoff" do you think they'd get for negotiating a 2-3,000 piece contract for an item the gov't would by at or below retail?
If you read the article, you would see that the high cost is not from the hardware but implied from other thing else (below).
The acquisition by the department included an immediate need for 2,500 e-readers and 50 titles of content, and required provision of a secure, centrally managed content distribution and management platform to manage unlimited number of devices, besides the ability to access and download content over 3G cellular networks and Wi-Fi connections worldwide, according to a note in June.
My problem is not the cost, but why? Why do they need an e-reader for? Can't they use something else instead of e-reader? The cost for any electronic stuff often times is not from its hardware. Also, what benefits do they get from using this product? Is the benefit worthwhile? If it is not worthwhile right now, how long do they need to have the product in order to break even with its
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To read? To replace paper with? What else are they going to use, some backlit screen gadget?
Re:Spec'd the Kindle (Score:5, Informative)
The reason Amazon is the only one which meets the specs is because the specs were chosen so only Amazon could meet them. It's how you can exclude a vendor (or vendors) you have no desire of even giving the opportunity to win the quote. This can be because of past history with the company's sales team, poor delivery, poor service, poor quality, and so on. While in a strict lower cost item sense it's bad, it is often not the case when you consider all the other factors. Extra time spent caused by poor quality or poor delivery can often cost far more than the additional money spent on a product which has very good quality and is delivered on time.
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Not to mention that you still have the burden of actually measuring and proving how they failed to deliver. Often you're far too resource constrained to even begin to go through that process and generally there is little reward.
You have to make decisions similar to how you would in the private sector. You buy from sources you trust. You seek to maximize value. While it may not seem ethical that you fake requirements in order to get that accomplished, I can see the argument that it would not be ethical to do
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I'll assume you're being honest and weren't motivated by bribery or the desire to get a cushy job with your vendor on. Because both motives are pretty common reasons for using the spec to exclude competitors.
In any case, here's hoping you don't get audited. Bidding procedures exist for a reason, and people who circumvent them can get in a lot of trouble.
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It's how you can exclude a vendor (or vendors) you have no desire of even giving the opportunity to win the quote. This can be because of past history with the company's sales team, poor delivery, poor service, poor quality, and so on.
In other words words, the devil you know.
I've been on the other side of that equation, both as a winner and a loser. MOST often I found this vendor-slanted specification phenomenon was the result of the procurement rules UNDER-weighting confidence in the vendor. That's because we don't trust the judgment of government worker bees. A CEO can make a deal with a handshake on the golf course. Because CEOs are supposed to be geniuses, we trust his gut instinct. We think government workers are idiots, so we don't
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"While in a strict lower cost item sense it's bad"
Cost != price.
You sort of addressed that in your later comments, but your comment perpetuates the common misconception that price = cost. I practice, cost = price plus lifetime support and accessory/software/add-on costs. And that's still not the relevant question. The relevant question is cost per year, so take the above divided be average usable life.
Re:Spec'd the Kindle (Score:5, Informative)
That is common. We go by the joke we called a fare bidding process. Everyone denies it but this is how it works.
The Government finds a vendor they want to use. Once they find the vendor they like, they often get the resumes of the people who will be working, or the product specifications, then they use that to make their bid. Because the Bid has a detail on what they want, it is hard for a competitor to compete with the bid, because every product and service is a little different. Even though they may be able to help solve the same problems.
If you look at lot of these bids, you see things like
Web Site Development
Required Sills:
HTML 10+ years
JavaScript 8+ years
Photoshop 6+ years
ASP.NET 9+ years
FORTRAN 77 4+ years
C++ 12+ years
MUMPS 3+ years
You see bids like that you know they have already picked someone they want to use. The Job doesn't even require FORTRAN or MUMPS or C++ however they may have some in house applications that still run these systems so they add it in their bids, but they have already picked who they want and they know that they have those skills, and they also have similar systems on their side (To show that they have a need for such technology).
They did all the paper work correctly and there isn't any sign of corruption. However they found a way to bypass the fair and competitive bidding process.
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Why would somebody with 12+ years of C++ experience be doing web site development?
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Why would somebody with 12+ years of C++ experience be doing web site development?
because the company needs it? besides plenty of operations that interface with users through website need c++ somewhere in the backend..
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There is perpetual complaint about "government messing around with business," but clearly not enough complaint about "business messing around with government." I would also argue that the ramifications of the latter are far worse than the former. Think for a moment about the "military-industrial complex" and the number of complex defense contracts that are apparently largely a mechanism to get fat sucking off of the government (and taxpayer) teat. The place where it gets really bad is when we don't get t
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I would also argue that the ramifications of the latter are far worse than the former.
I would argue that they are almost the same thing... a corporation is just an extension of government. It gets it's charter from the government, and it can only exist because of government. The government can make almost completely arbitrary rules to regulate the corporation, and in fact the very laws that create the corporation are themselves a form of regulation.
Then the corporation uses a portion of it's revenue to lobby the government. This is similar to the way that government-funded and government-man
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How do you suggest breaking the cycle then? IMHO if the founding fathers had seen what corporations would become, they would have done a specific delineation of rights in the Constitution. Perhaps it would be as some sort of "collections of peoples", actually rather similar to a church, when you think about it. As it is, corporations are getting everything but the vote, less of the liabilities, and the recent and not-so-recent "personhood" rulings form the Supremes indeed make mere people second-class ci
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I'm certainly open to something "radical" like you propose - but I don't pretend to be smart or knowledgeable enough to know the answers.
I know that I want the NY Times to exist with free speech rights.
I know that I don't want corporations to be allowed to lobby or get involved in the political sphere.
Those are two things that are very hard to reconcile, but I think it must be possible.
One idea I have is this: corporations should only be allowed to advertise a product that they sell. If the NY Times wants t
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At least unions have some sort of democratic feedback. Even public corps are all non-binding votes with no recourse for owners except dumping their stock. The management is in total control. Even privately owned companies are disconnected from the owners, look at Bain Capital, Romney was the sole owner and he claims no control or responsibility for decisions an
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Corporations are not extension of the government.
I cannot agree. Absent a government, can a corporation exist? If so, how?
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They require a charter because our society recognizes (some) of the ways they can wield power and the founding fathers were familiar with the ability of corporations to do evil unless they are regulated.
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What would prevent it?
You said it yourself: limited liability.
You are right, a partnership is sort of like a corporation - but the partners still have full liability for their actions. If the partnership were to default, then the debtor would come after the partners.
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Ripping someone off and then hiding is age-old. We call them con-men, grifters, etc. They almost certainly predate any kind of government.
Having a legal framework in place that protects a person from their own actions requires government.
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Since shortly after the civil war, corporations have wrested power from we the people, they are not subordinate to the government as was originally intended, but citizens of the government with full rights of any citizen.
I apologize for rising to the bait in your straw man argument, corporations cannot exist without some legal fram
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I wouldn't quite call corporations grifters - it's more akin to an extra layer of bankruptcy law. We have an aversion to debtors prison in this country, and the corporate entity allows people to go even further, protecting most of their personal assets. The difference is that with a grifter, you didn't know what you were dealing with until you were scammed. When dealing with a corporation, you know full well what you are getting into.
Corporations can be chartered by government without being able to influence that government. Current charter rules removed most government accountability decades ago.
I agree and was not suggesting that this is an inherent problem without a
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This happened to me. Came across what would be a perfect job upgrade for me on the USAGov job website. Long list of requirements, but I had all the right experience. By application ended up being 12 pages long. Sent it in, a couple of weeks later I got a personal letter from the hiring manager/department head saying who they picked including a brief bio of him. Same skill set, but worked in that department at a lower grade. I essentially got a freaking apology letter from them for wasting my time. Ne
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You see bids like that you know they have already picked someone they want to use. The Job doesn't even require FORTRAN or MUMPS or C++ however they may have some in house applications that still run these systems so they add it in their bids, but they have already picked who they want and they know that they have those skills, and they also have similar systems on their side (To show that they have a need for such technology).
They did all the paper work correctly and there isn't any sign of corruption. However they found a way to bypass the fair and competitive bidding process.
What's really funny is when a job posting like that is put out, tailored to match somebodies resume, and HR keeps rejecting the targeted person's resume because they don't know what they are doing. (In the case that happened in my group was that the automated software HR used to cherry pick resumes didn't think the guy had the right qualifications. The manager had to rewrite the job offer and have the guy resubmit his resume five times before it finally made it through the process and a human in HR would ev
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That's how government contracts work. Also, this is how government job positions work. You write the requirements to match exactly the single person you want and only that person.
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With my previous experience, THIS is exactly what pisses me off about Government contracting.
I applied for specific positions before whereas I was over qualified for the job listed. First interview, I nail it, with comments like, you are just too qualified for the position, however your the best candidate I've interviewed. With comments like that, I constantly fall into the trap of the followup comment. "However, government requires me to interview two other candidates for the position."
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So the requirements were for a Kindle and only a Kindle?
In my experience (construction) government bids do not work that way. In fact, the contract documemts I have made for various federal, state, and local governments were typically required to explicitly list at least three manufacturers for each product. (The hard part that sometimes gets overlooked is that companies are so busy buying each other, merging, and selling off parts, that three different brands that were made by three different companies yesterday may very well be all under one corporation t
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You are missing the point. You list THREE manufacturers for each product, but you write the requirements that match the one you want and ONLY the one you want.
Hell, I've gotten two jobs because they wanted me and wrote the reqs based off of my resume.
Re:Spec'd the Kindle (Score:4)
Guessing you didn't read the article. No device other than the Kindle met the requirements AND the requrements were quite sane.
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The only thing really "Kindle specific" was the free WiFi.
Everything else is stuff that your book reading spouse might be interested in, especially the part about idle time.
Re:Spec'd the Kindle (Score:4, Interesting)
Oddly, The Kindle doesn't meet the requirements, either. The Kindle and Kindle Touch don't do video, and the Kindle Fire doesn't do 3G...
Also, the requirements are not specific to Amazon - B&N has devices which match the requirements as fully as Amazon does, including the 3G download requirement. If they wanted to force Amazon to be the only supplier, they would've had to require that the device allow web browsing over the 3G link.
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Looks like we're going to have to FOIA the actual request, then, as whoever was interviewed was clearly confused about what WiFi is:
The Kindle also scored over some other e-readers on the market as the competitors could not provide the text-to-speech requirement, the long-lasting battery life and the free Wi-Fi with a global network that was required, the note said. The J&A had stated that "costs associated with downloading content either via 3G or Wi-Fi must be not separately priced."
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What world do you live in? Stuff like this happens all the time.
Let's cheer for No-bid contracts (Score:2)
Is a Raytheon tablet in the works?
Re:Let's cheer for No-bid contracts (Score:5, Funny)
Yeah. I'll be battle-hardened to withstand 20G shock, survive submersion in seawater to 500 feet depth, be rad-hard, and have full-up mil spec documentation. It's yours for $127,343.36 per copy. Do you need the HumVee mounting kit as well?
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yours for $127,343.36 per copy
I know it's tongue-in-cheek, but a device with the 4 features you listed will end up costing far more than $100k/each. But given the features listed... the only application that comes to mind is exploring lakes/oceans on a celestial body that isn't Earth.... which would be awesomely remarkable.
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Oh, the miracles of buying in quantity!
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Pinned down by unknown hostiles? Incoming mortar fire? Team communications gear down? No problem, have IT send you another one; you aren't going anywhere for a while.
That can't be... (Score:5, Funny)
A federal procurement contract with a set of requirements that can only be satisfied by one vendor?
Unheard of!
that doesn't seem like a bad deal (Score:2)
Unless they're considering the need for such devices entirely, I'm not seeing how an alternate vendor is going to come in much lower than that. The Kindle is pretty reasonably priced as far as hand-held reading devices go, probably even moreso in a bulk purchase.
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want to bet that the new MS Surface tablet is going to meet the specs? Not only that but it runs Windows, Outlook and connects to the exchange server while being compatible with all of the existing MS infrastructure the dept has.
Kindle touch video? (Score:2)
Re:Kindle touch video? (Score:4, Insightful)
It said "or," as in "8 hours of continuous reading or approximately 7.5 hours of video playback."
I suspect that the challenge here had to do with procurement rules. It's against the rules to design an RFP or RFQ in such a way that only one vendor can fulfill the requirements. It sometimes happens that the requirements are immutable and the RFP ends up being built that way, but that has to be proven, and I find it difficult to imagine that the Kindle is such a totally mind-blowing device that a Nook, for example, couldn't actually meet their needs as well. (I own a Kindle, and love it, mind you...it's just that the Kindle hasn't been the unapproachable paramount that the iPad is in the tablet market, in my opinion.) So I think someone had a predilection for Kindles, wrote the spec that way, and is now getting bitten by that no-no.
One one thousandth of a penny wise, pound foolish. (Score:3, Insightful)
> canceling a $16.5 million Amazon order
Yey! The government just reduced its spending by .00037% this year!
It still continues to borrow 9/10ths of a Nimitz-class aircraft carrier every day.
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They already allocated the money to the department. They'll just have a bigger holiday party this year.
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Except for the fact that I don't think the US Federal Government has to pay sales tax... :-)
$6600 per Kindle! (Score:5, Insightful)
$16.5 million divided by 2500 = $6600.
Even though that includes some content and services on top of the Kindle itself, I don't see how it reaches $6600 per unit without most of it being waste and kickbacks.
Re:$6600 per Kindle! (Score:5, Funny)
$16.5 million divided by 2500 = $6600.
Even though that includes some content and services on top of the Kindle itself, I don't see how it reaches $6600 per unit without most of it being waste and kickbacks.
Maybe they forgot to select the "free super saver shipping" option.
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Shoulda had prime....
Re:$6600 per Kindle! (Score:5, Funny)
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Well, it's about $100 bucks for the Kindle, but then you have to realize, they were planning to use Oracle's Linux on the devices.
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Having dealt with selling a government some hardware and services, I can understand charging way more. They don't just call up and order what's on the shelf like your other customers. They want studies and paperwork and certifications and documents and reviews and more paperwork and certificates and contracts and guarantees and the whole process takes a year for what takes your other customers a week.
Seriously, I'm all for accountability in government, but this is the kind of stuff you get for it.
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All kidding aside... they are *probably* trying to go paperless. Laptops/desktops allow a paperless office (e-mail, databases of information), but when you're reading and reviewing documents printed pages were king right up until the Kindle Touch. I'm actually surprised it just says Touch and not DX since the bigger size is supposed to be better for displaying graphs/charts/tables. But for reviewing and commenting on straight-text the Touch is a phenomenal platform.
Now... I can't guess what the savings
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If you read the procurement doc, it requires that the contractor provide 3G services to the devices globally, forever.
That's not cheap.
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If it's 3G services that they can use as a general data connection, then yeah, that could be pricey. Of course, Amazon already has those 3G contracts with providers all over the globe, so there may not actually be any additional cost to Amazon.
I guess nobody here read the procurement doc (Score:5, Informative)
Go read it.. SAQMMA12R0272 at fedbizopps.gov some highlights:
"The US Department of State intends to award an indefinite-delivery indefinite-quantity commercial items contract on or about June 19, 2012, on a sole source basis to Amazon Digital Services, Inc. of Seattle WA for the commercial supplies and services described below. The anticipated value is $16,500,000 over the life of the contract, which shall be one base year plus 4 option years."
"The Contractor shall provide 3G services globally. The Contractor is responsible for all costs associated with 3G services globally (i.e., downloading content and access to the Internet Browser)." {Better make sure it works in Ulan Bator}
"The Contractor will supply content to the device delivered under this contract, but shall also support the delivery of content to the following other devices currently utilized by the Department of State: Apple iOS, Android, Amazon Kindle, RIM Blackberry, PC, and MAC"
"The Contractor shall provide a dedicated 24/7 help desk to support inquires from the Department of State and its partners in countries specified in Attachment A."
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it's not 16M for 2500 kindles.. it's for a package of services, secure distribution channels, etc., The "initial delivery" is for 2500 readers, with options for a lot more, within the 16M total. And a starting batch of 50 documents, which Amazon would have to convert. 1 initial year plus 4 option years, too.
They wanted a locked down platform which could NOT be used as a general purpose computer or have user installed software (knocking out the iPad, jailbroken or not)
Re:I guess nobody here read the procurement doc (Score:4, Insightful)
iPad Mini (Score:2)
They must have gotten wind of the iPad Mini, and are backing out of the contract so they can use IOS devices.
Kindle Touch plays back video? (Score:1)
Nothing sneaky here. (Score:4, Interesting)
Nothing sneaky here with Amazon being the only e-reader selected. From the actual article, the iPad was/is not classified as an e-reader, but is a tablet/computer and the bid was for e-readers. The nook is not mentioned, but the requirement for text to speech would have eliminated it at the time the specs were created. Most other ereaders at the time didn't support that, either.
Now some may want to arugue that it was intentional to only allow the kindle, but a much more likely scenario is that the device selected needs to accomodate people with visual impairment.
Nothing sneaky here with Amazon being the sole provider. On the otherhand, it if they end up buy 2,500 Windows Surface RT at twice the price, then, that should really be looked into. Because, like the iPad, it's not an ereader, either.
How can they "cancel" a contract? (Score:2)
I thought a contract's supposed to be an agreement to exchange value. Once you make the contract, you have to follow through on it.
For normal people, it's hard to think that you could just cancel a contract.
Don't like your car payments? I "canceled" the car loan.
So how is it that large organizations can just cancel contracts whenever they want.
Can't Amazon sue for specific performance?
Or, it wasn't a contract to begin with, and they were only thinking about it.
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Big companies can do this 'cause they have their own lawyers. I 'bought' a house once and my lawyer added in some clauses he recommended to the sale contract. As it turned out, just as well - the company posted me out of town for about a year. I used one of the clauses to get out of the house sale. Fe
Surface & iPad (Score:2)
iPad Mini (Score:1)
7.5 hours of video? (Score:2)
Text-to-speech-to-RUN (Score:2)
Just so some other part of the US gov can have a box to broadcast:
Don't run! We are your friends!
We come in peace! We come in peace!
Bad Amazon (Score:1)
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"Romney/Ryan 2012. Take back America."
"The government only exists to protect private property rights and NOTHING ELSE."
Those are mutually exclusive. Please choose one.