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Harvard Pushes Bulk Buying Effort

Alums say savings could run to $100 million

And the University has hired an outside firm to find cheaper printing prices for its many publications, based on the combined volume of its eleven schools.

Berman, Summers and others say it’s too early to measure the full benefit of these efforts, but that they are optimistic they will make a difference.

Where Harvard has made University-wide contracts—a deal for office supplies was already in place before the McKinsey report—it has seen broad compliance, Summers says. 75 to 90 percent of applicable purchases were made through these contracts.

Alumni Pressure

But for a group of alums—who bring big-names and fat checkbooks to the table—these efforts fall short of their potential.

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Some alums have been stewing about lost purchasing power for years. But after what they call encouraging signs that accompanied Summers arrival, they intensified their lobbying campaign, meeting with Summers, Hyman and members of Harvard’s Governing Boards.

As an offshoot of their campaign, a February New York Times article chronicled their efforts.

The article revealed that D.C. lawyer John B. Henry II ’71 and former Democratic senator Timothy E. Wirth ’61, wrote Summers in February arguing that the University should be saving far more using competitive pricing—between $100 and $250 million dollars annually.

“Harvard has the opportunity to save at least the equivalent of the income generated from the recent Harvard capital campaign, and, if we are lucky, perhaps even more,” Wirth and Henry wrote.

Henry and Wirth argue Harvard is being too selective and too flexible —Summers should institute mandatory, “across-the-board competitive sourcing,” they wrote.

As of now the University is only focussing on the individual priorities McKinsey highlighted and is allowing schools to participate at their discretion.

According to Berman, McKinsey said 40 percent of the total $1 billion Harvard spends on goods and services cannot be bid on competitively.

Services like legal counsel, where expertise rather than price is paramount, and real estate, must be purchased individually, she wrote in an e-mail.

Summers and Berman say that mandating the schools’ participation in purchasing plans would bring no added windfall.

“We appear to be getting the available benefits [of competitive pricing],” Summers says, adding that a study of other organizations’ purchasing plans confirmed Harvard’s decision.

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