The government must improve public procurement policies to prevent a vicious price war among PC vendors that would be disastrous for the industry, Acer Inc (宏碁) Taiwan operations president Towny Huang (黃鐘鋒) said on Friday.
“The current government procurement policies are disadvantageous… I have been in discussions with officials over the past year in the hopes the government could amend the policies for the long-term health of the PC industry,” Huang said at a media gathering.
The government buys NT$8 billion to NT$9 billion (US$238.86 million to US$268.72 million) worth of PC equipment per year, including desktops, notebooks and monitors, Huang said.
Photo: Cho I-chun, Taipei Times
However, about three years ago the government altered procurement policies for public construction projects and fewer companies are now willing to bid for tenders, Huang said.
The government has decided to consider only the lowest bids — without setting a floor price — which has prompted some PC vendors to offer “unreasonably” low bids, he said.
For the first time in many years, last year no PC vendors put forward a bid for a government tender to supply desktops, which Huang said was mainly due to the government’s rigid policies and almost no profit to be made from the deal.
“Even if you win a bid, you are not going to profit from the low prices on offer,” he said.
“If Acer had won the desktop tender last year, we would have lost NT$1,500 to NT$2,000 per desktop under the terms of the tender,” he added.
The government must alter its policies, Huang said, as the low tender offers would affect interest in the PC supply chain — from vendors to contract makers and component suppliers — which would lead to a vicious downward spiral.
Huang said he has been discussing the issue with the Public Construction Committee and the Bank of Taiwan (臺灣銀行) over the past year.
The committee and the bank on Thursday held a public hearing, inviting companies to express their opinions on the issue, and Huang said he hopes the government can improve its procurement policies this year.
In related news, Huang said that despite headwinds facing the industry, Acer aims to boost revenue and profitability in its home market by 10 percent this year from last year, fueled by a growing demand for Acer’s commercial PCs.
Acer’s growth momentum in the commercial PC segment is stronger than in the consumer PC segment, Huang said, adding that the company is drafting plans to enhance the company’s brand image in the Taiwanese consumer PC market in a bid to increase its market share.
“We hope to grow our market share in Taiwan from last year’s 22 percent to 23 percent to about 26 percent or 27 percent this year,” he said.
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