Bids Below Cost

In April 2002, the IT news site ITmedia recalled a bid for a document management system of the Tokyo Metropolitan Government. The system had a budget of 85 million yen. Hitachi bid 750 yen. The writer placed the bid in the previous year, as far as he remembered.

An explainer on CIO.com describes the same scheme in copiers. A vendor won the machine itself for one yen and made its profit on the maintenance contract and the toner and ink cartridges that followed.

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