Enron Mail

From:george.wasaff@enron.com
To:kenneth.lay@enron.com
Subject:Follow-up to Cindy Olson's Voice Mail Message Regarding Compaq's
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Date:Fri, 18 Aug 2000 02:09:00 -0700 (PDT)

Employee Benefit Initiative
Cc: cindy.olson@enron.com, richard.causey@enron.com
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X-From: George Wasaff
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Ken:

One of the initiatives implemented at Global Strategic Souring since its
formation in February is to leverage Enron's aggregated purchasing power to
facilitate commercial development opportunities for the Business (EBS, EES,
EFS, and etc.) Units.

Annually, Enron spends several million dollars with COMPAQ for servers, desk
top computers, and lap top computers. COMPAQ has also been selected as one
of the potential candidates to service the EnHome program. COMPAQ is also
one of EBS's alliance partners.

Given the magnitude of Enron's relationship with COMPAQ, we have formed an
intercompany team comprised of representatives from EBS, EES, EFS, Global
Strategic Sourcing, and the EnHome Program. In our most recent meeting the
business units reported the following:

COMPAQ has failed to define its requirements for EBS services under the
current alliance agreement between the companies. COMPAQ has also denied EBS
access to expertise and installations required for product refinement and
implementation. (Based on the feedback I have received, I question whether
COMPAQ intends to honor the terms and conditions of its relationship with
EBS).
EFS only provides building services currently to a couple of Compaq's
installations.
EES has been in discussions with COMPAQ for several months now. Although we
are progressing, it would appear that we are at an impasse on the language in
the contract necessary to support the transaction.
On the EnHome program, COMPAQ has generally been unresponsive to our
questions and concerns for clarification and/or additional information on
their experience in operating this type of program.
The Widows 2000 Roll-out Contract literally has taken months to complete when
it should have only been a matter of weeks.

Ken, based on what I am seeing day-to-day, I am concerned that COMPAQ has
lost sight of the value of our total business and the value of a healthy,
bidirectional relationship.

Therefore, specifically given the unresponsiveness to our most recent
requests for clarification on the EnHome Program and our concerns regarding
there ability to operate a program of this magnitude, I have requested that
we reopen discussions with IBM and DELL.

I will keep you apprised of future developments.

George Wasaff