The administration of India is suggesting strongly to use OSS: kasia in a nutshell: India vs US.
Working with OSS all day long I find that a nice change from some of the – heavily Microsoft influenced – debates over here: in Germany there have been lots of arguments pro/contra the administration using OSS and I am sure Microsoft invested a lot of money to prevent that from happening.
I believe that money was bad investment.
Here’s the resume Schily (the Secretary of the Interior) drew of a cooperation with IBM to supply the administration with OSS: Open Source Software in der öffentlichen Verwaltung. He basically says that the amount of money spent on software can be drastically reduced that way. There is also mention of Schwäbisch Hall which converted to OSS as first European city in November 2002 and of Munich which converted just this year as the first major German city. Especially about Munich there was a huge controversy and if I remember correctly Microsoft representatives tried really hard to avert this.
Now there is a even complete site dedicated to OSS in the public administration of Germany.