Replies to post #106270 on Wave Systems Corp. (fka WAVXQ)

[go-kitesurf]

tkc, in relation to this comment:

Wave should have a fairly good conservative guess as to the value of Wave's share of these two significant Gov contracts.

I think the board should realize that Wave is a subcontractor for ORC. There has been some discussion as to how this works so let me explain in detail - per my experience in such matters. In my haste, I may make some minor literal errors that a few posters might correct, but generally speaking:

The government has a million companies that call on them to do business. After all, who wouldn't want to sell IT services or computer equipment to the US Govt.? The US Govt. probably got sick of getting calls from sales people decades ago and set up subsidiary buyer companies. Yes, there are companies that exist simply to execute purchase orders for the government or other large corporations like GM, or Ford, or Boeing (though Boeing has an internal group as well). This prevents people from calling them. Only approved vendors get to do business with the Govt, and their accounting is significantly reduced.

So the USGovt decides they want to get some Wave software as part of a bigger IT deal that ORC is putting together. ORC is an approved vendor and has filled out the 1000s of forms and been cleared for business. Wave has not. Therefore, Wave becomes a vendor for ORC, doing business through ORC for the USGovt.

The US Govt cuts a PO to ORC for the $100M. (I believe a PO with a "not to exceed $100M" is already cut and ORC will use it all, baby). Orc will cut Wave Systems a purchase order for a set amount according to the original purchase order that is "in hand" at ORC.

So, Wave will not be guessing as to what they will be getting. They know exactly, to the penny, what they will be getting, because they told ORC what the cost will be. It will be in black and white, and is already in black and white.

Before the US Govt even cut a PO number to ORC, ORC quoted them a system implementation cost. That quote included the cost that Wave Systems told ORC it would take to pay Wave to come out and install and deliver the Wave software for the US Govt.

The only guessing done, is going to be done by shareholders.