Experiment in Public Procurement: Italy Buys in Bulk Harvard Case Solution & Analysis

Under pressure from the European Union, which found in Italy "eurozone" uncertain, given that the country control its deficit spending and reduce the high public debt, the central government in Italy initiated dozens of cost-cutting program in late 1990 and early 2000 - ies. One such program is aimed at cost savings amounting to billions of euros of public procurement of goods and services. The first priority of the program is to identify products and services purchased widely by state agencies at all levels of government, and combine them into a nation embracing mega-contracts. Combining public sector demand so, analysts argued, the public sector in Italy could significantly increase its market leverage and win big discounts from suppliers. This assessment proved to be correct, but politically explosive. In November 2003, the Minister of Economy and Finance of Italy ordered to suspend the program to give a political and administrative leaders a chance to figure out what to do. This decision, making the event allows students to consider how Italy could have prevented this political reaction, and challenges them to suggest how the government can set up a project in such a way to solve the problems of criticism, but still allow him to improve procurement efficiency and reduce its costs. HKS Case Number 1925.0 "Hide
by Pamela Varley, John D. Donahue, 14 pages. Publication Date: September 30, 2008. Prod. #: HKS125-PDF-ENG

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