Deployment Guide 2011/Purchase Agreements and Ordering Process

OLPC Deployment Guide 2011: Purchase Agreements and Ordering Process

This section describes the customary process prior to ordering laptops which includes certain decisions about the technical features of the XO and the related contractual agreements.

Selecting your XO

The XO can be manufactured in various forms to best fit the local context of the deployment.

Keyboards

XO laptops can be manufactured with a variety of language for keyboards. In order for an XO keyboard to be available, a high-resolution image of the layout must be accessible and existing XO software must support the keyboard image.OLPC software releases are designed to support the International XO keyboard option.

AC Adapters

There are two types of adaptors available: brick or wall mount. The XO AC adapter has an input of 100- 240 volts and is available in 3 options:

• 2 flat prong (US)
• 2 round prong (EU)
• 3 flat prong (UK)

Memory

The XO uses solid state memory instead of a hard disk. This is primarily to improve its robustness but also to improve performance and reduce power consumption. The default memory type is 1GB of RAM and 4GB of Flash. Depending on the budget and usage requirements, selection of faster or bigger solid state memory for the XO can improve performance and storage capacity.

Content and Custom Image

OLPC has developed a mechanism whereby the collection of “activities” and content “bundles” loaded onto the laptop can be readily pre-configured. It is also reasonably easy to reconfigure the XO in the field. It is the responsibility of the core team to determine which activities beyond the default set distributed by OLPC should be included on the laptop. Everything provided on the XO, including texts, dictionaries, documentation, etc., can be localized. Electronic books—in formats such as PDF, DOC, HTML—and other media can be pre-loaded onto the laptop as a content bundle. Please ask OLPC for suggestions as to potentially useful materials and pre-loaded content preparation.

In addition, a deployment may choose to deploy computers with a custom image. A custom image is a selection of XO activities designed by a local deployment team. The option to load a custom image onto the XO at the time of manufacturing depends on the level of skill and commitment from the project’s technical and learning advisors. There is also a minimum order requirement for loading a custom image at the time of manufacturing. A custom image requires testing and maintenance. OLPC provides projects with the guidelines for this process; however, no technical support can be provided for custom images as they are designed by core teams. Sponsors interested in XO custom images should consult with OLPC technical personnel, who will assess the project’s suitability for this option. If a decision is reached to load a custom image at the time of manufacturing, the final image must be presented to OLCP no later than 4 weeks prior to the scheduled XO production.

Once the XO is physically customized for a particular country, it is ready to be used. However, due to the different curricula and language variations of each country, it may be useful to select specific activities to install on the XO as part of a “custom build” and also to review the content available in the local language to determine if any work is necessary to create translations or provide new content that is more culturally relevant. This could include the following:

• Pre-loading specific Sugar Activities to support specific curricula needs;
• Pre-loading specific activity content such as e-books;
• Browser bookmarks to country specific education websites;
• Maps;
• Providing language translations for Sugar and Activities loaded on the laptop (so that system messages, menus and buttons are in the local language);
• Providing language translations for Activity content (so that content within activities is in the local language, e.g. e-books or place names on maps);
• Developing customized Sugar Activities to meet specific curriculum needs; and Developing custom content to meet specific curriculum or cultural needs.

The custom XO image option requires a certain level of skill and commitment from the technical and learning deployment advisors. OLPC will help with the bundling process, but the responsibility for testing the bundle rests with the in-country deployment teams.

Purchase Agreement

OLPC recognizes a binding commitment from a sponsor to a project upon receipt of a signed purchase agreement and a letter of credit in favor of OLPC for 100% of the value of the laptops. OLPC also accepts advance telex transfers of cash in lieu of letters of credit.

The purchase agreement includes five major sections:

1. Detailed specifications of the laptop including the configuration of RAM and flash memory;
2. Number of laptops ordered and the price per laptop CIF;
3. Delivery schedule ;
4. Warranty terms and conditions; and
5. Standard legal sections such as governing law and dispute resolution.

For purchases of large quantities of XOs, OLPC will work on a contractual agreement detailing the terms and conditions of the XO orders. OLPC has a contract template that can be modified in accordance with the deployment requirements. Issues addressed in the OLPC contract include payment terms, warranty, letter of credit guidelines, and other topics pertaining to the XO procurement process. OLPC’s finance, supply chain, and logistics personnel work closely to ensure the deadlines and conditions set forth in the contractual agreement are adhered to.

Payment & Inco terms

The most common payment option for large-scale XO orders is 20% down payment and 80% payable by transferable letter of credit. The OLPC template for issuing transferable letters of credit can be found in the OLPC contract. OLPC Finance personnel are committed to ensuring any finance issues pertaining to an OLPC purchase are addressed quickly and efficiently. The Incoterm used for large quantity XO orders is CIF (cost, insurance, and freight Incoterms 2010). The CIF term means that the seller (OLPC) is responsible for the shipment and insurance costs from the country of origin to the port of destination.

The buyer of the shipment is responsible for all costs associated with the shipment once the goods are delivered to the port of destination. These costs include customs entry and clearance, entry duties and taxes, demurrage charges, landing charges at the importer's port, the unloading onto trucks at the importer's port and the delivery to the final destination.

Warranty

All XO orders are shipped with an additional 1% of units in lieu of a conventional warranty program. These units are shipped at no extra cost. In addition to the supplemental units, OLPC provides a limited warranty in the event of an epidemic failure. Details on this warranty can be found in the OLPC contract.

Local Duties and Taxes

The local duties and taxes associated with a shipment of XO laptops vary depending on the rules and regulations of the local customs authority. Import duties for laptops can be very high, and may reach20% of the commercial value in some cases. In order to avoid such taxes, OLPC recommends that local teams research local processes for tax exemption and seek such exemption whenever possible.

Receiving tax exemption on imported laptops for educational purposes may require authorization from a number of local authorities; gaining such authorization may take considerable planning. Local customs authorities should be consulted regarding the process and time frame of receiving a recognized exemption. OLPC is able to provide any documentation necessary to process an exemption request with local authorities.

Spare Parts

XO spare parts can be purchased in conjunction with an initial XO order or at a later date. OLPC can assist the logistics department of team in purchasing spare parts from the XO manufacturer. Spare parts are available in a range of minimum order quantities. If spare parts are purchased with an initial order, OLPC can recommend specific parts and quantities.

OLPC logistics staff based in Miami, FL track each order from receipt of the letter of credit through the delivery of computers to the requested port. Weekly status reports can be provided to a project sponsor. It is the responsibility of local sponsors to clear units through local customs. Local sponsors are also solely responsible for any and all duties, taxes, fees and other costs related to freight forwarding services. Additionally, local sponsors are responsible for all costs of transporting computers from the dock to the warehouse.

XO Order Process and Lead Time

In order to minimize the end cost, OLPC manufactures laptops to order and does not maintain an inventory of laptops. Formalizing the commitment to purchase XO laptops assists OLPC in working with core team to establish a deployment timeline that will lead to an efficient XO deployment experience.

Upon receipt of payment (cash in advance or letter of credit), OLPC sends a purchase order to manufacturer, this takes 1-2 weeks to process. It normally takes 12-16 weeks to manufacture the laptops. The manufacturing company has the capacity to produce 240,000 laptops per month for OLPC although pre-existing OLPC orders would normally reduce this capacity. (Few projects are capable to deal with more than 50,000 laptops arriving in a single month.) OLPC normally quotes 6 weeks for sea shipment of the units. Shipping the laptops by air takes less time from pick up to delivery destination. However, airfreight is more costly and is not recommended.

The estimated transit time for ocean freight delivery is 1-6 weeks from the time of XO availability at the manufacturer. When planning for deployment please allow 14-24 weeks from the time of payment issued to the date in which you can expect your XO shipments at the designated port. OLPC will work with your deployment team to establish a proposed XO delivery schedule. Depending on the XO order quantity, delivery can be made in one or multiple installments. Issues to consider when developing your XO delivery schedule should include: when laptops are required for teacher training prior to the scheduled roll out; time required for local inventory systems to process an XO delivery; final transit time for XO delivery to their destination or distribution site; etc. This information will assist OLPC in working with core team to establish an orderly and efficient XO delivery schedule.