I am a public procurement expert with almost 20 years of research and hands-on experience in a variety of regulatory environments . I am also a part-time University Lecturer on industrial organization and market design. am committed to ensuring 'thinking and doing' in procurement coexist under one roof, with my research and civil service practice constantly informing each other

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Gian Luigi Albano

Emails: gla@gianluigialbano.com   |  galbano@luiss.it  |  gianluigi.albano@consip.it

Copyright 2020 © Gian Luigi Albano All Right Reserved. Sito Web realizzato da Flazio Experience

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On governments, markets and the desperate quest for the answer to what happened to Alice after she stepped through the looking-glass...


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(Some of) The Lessons of Paul Milgrom and “Bob” Wilson to avoid “Bad Buying” and … “Worse Thinking” – Part 1

(Some of) The Lessons of Paul Milgrom and “Bob” Wilson to avoid “Bad Buying” and … “Worse Thinking

2020-10-14 11:56

The 2020 Nobel Laureates for Economics, Paul Milgrom and Robert (“Bob”) Wilson “have studied how auctions work. They have also used their insights to

Data management and Information in public procurement 4.0

Data management and Information in public procurement 4.0

2018-09-25 15:54

The following text is (almost) the transcript of the keynote speech I delivered at the 2018 Global Public Procurement Conference organised by the Interamerican

Books&Ideas:

Books&Ideas: "Atomic Habits" and Kaizen

2024-07-14 12:58

I bumped into “Atomic Habits” half by accident and half some sort of mental correlation with another recently finished book “The Subtle Art of Not Giv

Gas in - Electricity out

2022-12-15 18:41

Gas, electricity and economic fragility

The Alluring Legacy of William Vickrey to Public Procurement (Practitioners)

The Alluring Legacy of William Vickrey to Public Procurement (Practitioners)

2021-01-03 15:13

In 1996, the Nobel Prize for Economic Sciences was awarded jointly to James A. Mirrlees and William Vickrey “for their fundamental contributions to th

“Will the next global emergency require

“Will the next global emergency require "virtual" central purchasing bodies?”

2020-07-05 18:54

Psychologists as well as sociologists will pour much ink – whether virtual or liquid – about the impact of social distancing on learning, soft skills

Much noise and a few signals: Will Alice ever learn anything about centralized procurement?

Much noise and a few signals: Will Alice ever learn anything about centralized procurement?

2020-05-30 22:10

Occasionally, the discussion about the pros and the cons of policy makers’ inclination to create new or to further expand the role of already-establis

Gli appalti pubblici tra la Scilla della flessibilità e la Cariddi dell'ipertrofia regolamentare

Gli appalti pubblici tra la Scilla della flessibilità e la Cariddi dell'ipertrofia regolamentare

2018-06-02 16:16

Chiunque abbia maturato un minimo di esperienza negli appalti pubblici in Italia è ben consapevole di quanto le "regole del gioco" siano frutto di un

Start-up post 26 May 2018 (EN)

Start-up post 26 May 2018 (EN)

2018-05-25 22:26

I have been incessantly using the metaphor of Sisyphus in my training sessions on the economic analysis of procurement, and particularly of public pro

Much noise and a few signals: Will Alice ever learn anything about centralized procurement?

2020-05-30 22:10

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Much noise and a few signals: Will Alice ever learn anything about centralized procurement?

Occasionally, the discussion about the pros and the cons of policy makers’ inclination to create new or to further expand the role of already-establis

Occasionally, the discussion about the pros and the cons of policy makers’ inclination to create new or to further expand the role of already-established Central Purchasing Bodies (CPBs) emerges from the muddy waters of the “lake of practice” to enter the lofty dimension of academic discussions. The latest opportunity for greasy-hands workers like myself - who direct most of the daily efforts to run complex procurement organizations, mainly aiming at nurturing a new generation of specialized procurement practitioners - is provided by one of the contributions to the book “Central Purchasing Bodies” edited by M. Comba and C. Risvig Hamer (Edward Elgar, forthcoming), namely the chapter “Public Procurement by Central Purchasing Bodies, Competition and SMEs: towards a more dynamic model?” by Albert Sanchez-Graells.

While the paper does not contain anything new with respect to what the author has written in the past, the very fact that all of Albert’s preferred arguments are bundled together makes us wonder whether Alice, our hypothetical candidate to undertake a procurement career in the new-born national CPB in Noiseland, will be ever in a good position to know anything relevant about what a CPB does.

 

Alice, please, come with me and I will show you some figures (oh, no! Who on earth needs figures about this?) borrowed from one of the largest operating CPB’s in the world, Consip, the Italian central government’s CPB. Here largest is used with respect to the overall value of public contracts awarded every year through Consip’s e-procurement tools. In 2019, this figure was approximately ‎€14.1 billion. This is likely to be already a small step forward as, for instance, very few public procurement “experts” seem to bother computing a very simple, but meaningful, ratio, namely the overall value of contracts managed by a large CPB and the public sector’s intermediate consumption (more or less, the closest proxy to the value of purchases for goods and services). In Italy, the latter would be approximately ‎€90 billion, so a good primary-school pupil would compute Consip’s “market share” by …

 

Alice is, however, an above-average pupil and, before falling into the trap of making the computation, would be asking me “Are all of the ‎€14.1 billion-worth contracts part of a gigantic aggregation procedure?” Thus Alice appears to be really the very first researcher pointing her finger in the right direction. Well, that figure is almost equally cut in three slices: the first slice is the one of Framework Agreements (FAs); the second is the set of contracts awarded within the perimeter of Dynamic Purchasing Systems (DPSs); the third one is the world of the e-marketplace (the Italian acronym being MePA) where low-value (but really low!) contracts are awarded.

Low-value contracts?? Yes, Alice. Almost ‎€5 billion-worth contracts were awarded to micro (!) and SMEs in 2019 through a(n) (almost) user-friendly e-catalogue. All of those contracts to SMEs? Well, not all of them. Just the 98% of them!

What about the contracts awarded through the DPSs? Here, the lion’s share (more than 90%) is accounted for by contracts for medicines. Basically, Consip has set and maintains the electronic system where hospitals and/or regions award sizeable contracts for medicines. And Alice, to your dismay, in the world of medicines there are no SMEs!!

 

“What about the last third?”, Alice rebounds promptly. 

OK, you’ve got a point.

In the remaining ‎€4.8 billion-worth contracts lay the “sin of all the sins”. Is it really so? Alice is really eager to open up the black box of Consip’s monstrous FAs. She immediately spots “electricity”, “telephone services”, “restaurant vouchers”, “medical equipment,” and wonders…“…but, these are exactly those markets that, at least in Italy, have undertaken a path of progressive consolidation. Isn’t it exactly the case where you would never let tens, if not hundreds, of isolated procuring entities face multi-billion global firms?” Not at all, Alice. For God’s sake, I would never do it!

 

A ballpark computation reveals to Alice that the overall value of contracts awarded through framework agreements in markets where SMEs simply do not exist is a foot close to ‎€3 billion. 

Then Alice, what did you get out of this picture?

Alice looks puzzled now, but her eyes wish to draw a conclusion from this short journey. Is there really a “War of the Roses” going on between Consip and SMEs? The latter get around ‎€4.5 billion-worth low-value contracts, while in markets accounting for ‎€7.5/8 billion-worth contracts SMEs are just absent! This leaves us with ‎€1.5/2 billion-worth contracts in which the legendary “distortion” of competition induced by the Italian government’s CPB might become a hypothetical issue.

“Distortion? Why distortion?”

OK, Alice. We shall go and explore the slippery slope of “abusing economic jargon” in public procurement shortly, I promise…

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