CONTENTION #2 – Within their offer Perfect Commerce made false claims regarding contractual rights with the NIGP Code . . . we contend that Perfect Commerce is non-responsive (non-compliant) as they have indicated affirmative responses that violate existing contractual agreements between Perfect Commerce and Periscope. Please refer to the attached letter (pages 7 to 9) from NIGP to Perfect Commerce, signed by the NIGP Chief Executive Officer and the NIGP Code and Consulting Services President, for more details.
There is a saying with which I am sure you are familiar which contends that absolute power corrupts absolutely.
I can think of no other situation in which the above has been so clearly demonstrated, than it has with the recent challenge by Persicope of Missouri’s decision to award the contract to implement an eProcurement system to Perfect Commerce.
Back in December – well before the Missouri story broke – I had suggested in a post that Periscope’s merger with BidSync represented “the humble beginnings of a major move in the world of public sector eProcurement.” Here we are in March, and it is safe to say that the Missouri contention is the public sector’s Gettysburg in terms of eProcurement contract awards.
Think about it for a moment as you read the letter from the NIGP.
Here you have an organization that has inexplicably opened itself up to a major PR crisis by clearly standing behind a single eProcurement vendor being Periscope, to whom they have given full custodianship over the ubiquitous NIGP Commodity/Services Code.
This brings to mind the scene from the 2012 movie The Dictator in which the “protagonist” shoots the other competitors in a 100 yard race so that he can victoriously cross the finish line alone.
What is to prevent Periscope from employing similar tactics going forward to challenge all contract awards? In other words, NIGP’s support of Periscope by threatening – in writing mind you – to pull the winning vendor’s licensing rights to the code, is tantamount to giving Periscope the only gun in the field.
It just doesn’t make any sense. Especially given that such an overtly aggressive chastisement of Perfect Commerce in support of a competing vendor, draws into question the NIGPs own creditability. Whether fair or not, some might conclude that the NIGP has something to gain – financially or otherwise – with every Periscope win.
This of course is where the Parthenon Capital Group comes into play. For those unfamiliar with Parthenon, they are the equity firm about whom I also wrote in December, because they were/are the money behind Periscope and that company’s merger with BidSync.
Check out my post titled Who are those guys? Are these the people who will have the most influence on public sector procurement in the coming years? These are ultimately the people who are pulling the strings of Periscope, BidSync and maybe even the NIGP.
If things go as planned, Parthenon may eventually add the eProcurement public sector market to this list.
Just started following the NIGP #CodeGate story? Use the following link to access the Post Archive; https://procureinsights.wordpress.com/nigp-codegate/
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On The Go? You can also listen to the audio version of this post as well as others through @Umano https://umano.me/jhansen
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Procurement Insights 
Rick Grimm
April 1, 2015
Jon, allow me to clarify, for the record, some inaccuracies reported in your blog. As always, you should feel comfortable reaching out to me and the Institute on any issues that concern you so that you are in the best position to report the facts. I will always be accountable, open and transparent.
NIGP does not stand behind a single eProcurement vendor. NIGP does not endorse any specific eProcurement vendor. NIGP only endorses programs owned by NIGP and which carry the NIGP brand as a NIGP product or service. Such is the case with the NIGP code – a commodity and service coding structure that is utilized by more than 1,030 public entities (including 29 states which have rather a site license or a statewide license). NIGP owns the IP to the NIGP Code and contracts with Persicope to manage and market the Code on its behalf.
The NIGP Code is available to any public entity or eProcurement software provider that wishes to install the code into their data systems via a license agreement. In addition to the 1,000 + public entities, 20 private sector firms serving the public sector community have elected to license the NIGP Code. This is hardly constraint of trade or absolute power. Periscope’s competitors have access to the Code as a NIGP Code licensee.
NIGP is not a party to the appeal submitted by Periscope on a recent State of Missouri eProcurement solicitation. NIGP was not a bidder and therefore has no rights to an appeals process. However, we discovered that one of the bidders may have misrepresented its license agreement with NIGP for the NIGP Code; which could have an impact on the bidder’s ability to comply with the terms and conditions set forth by the State. As owner of the NIGP Code, we have the right and responsibility to ensure the license is properly utilized.
NIGP has written to Perfect Commerce with an intent to terminate the license agreement but which also gave the company an opportunity to cure the license breach. This is standard protocol and provides the company with due process. The matter is currently being facilitated through legal channels.
The bottom line: There is no constraint of trade or absolute power because the NIGP Code is available to any firm or public entity that wishes to license the Code. Like any software agreements, the license includes provisions for using the IP and when these provisions are violated, the owner has the right to terminate the agreement if the violations are not cured within a prescribed period of time. And finally, NIGP does not endorse eProcurement products.
Rick Grimm CPPO CPPB
NIGP Chief Executive
piblogger
April 1, 2015
Thank you for taking the time to respond Rick. I appreciate it.
But here is the problem . . .
Back in December I wrote a post – the link to which I had provided in the articles – regarding Periscope’s acquisition of BidSync. In it I raised the question regarding what, if any impact, it might have on the public sector given Persiscope’s custodianship of the NIGP code. A reasonable contemplation I would think.
Here you have Periscope who, on the one hand, is licensing the NIGP code to Perfect Commerce, while also competing with them for the same contract.
Then as part of Periscope’s official Protest Letter that was sent to Missouri, they include on pages 7 to 9 a copy of the letter that the NIGP sent to Perfect Commerce.
The optics in and of itself are bad, as highlighted by the points raised in this post.
The fact remains that the custodian of the NIGP code responsible for licensing rights should not be an organization that is also going to compete against the very firms to whom it issues and manages said licenses on behalf of the NIGP.
It should instead be an independent entity that provides equal access and support to all licensees across the board – including the same ability to utilize the NIGP code on an equal cost basis. Or to put it another way, all licensees should have the same contractual rights with regard to the NIGP code.
This being said, and based on the preliminary feedback that I have received – which will also be the subject of an upcoming post, it appears that the current arrangement with Periscope as it stands is actually in conflict with the NIGP’s mandate to provide support to professionals in the public sector purchasing profession.
To put this in it’s proper context, Missouri made a decision to go with a vendor. By being a party to the challenge of said contract award i.e. inclusion in the Periscope protest letter, the NIGP is in essence going against the very people it is supposed to support. At least that is how it appears.
Once again Rick, the optics are just bad.
Rick Grimm
April 1, 2015
Jon, I would appreciate the opportunity to converse about this. Your information is wrong. Check the facts. The NIGP Code is available via equal access and support to all licensees across the board – including the same ability to utilize the NIGP code on an equal cost basis. All licensees have the same contractual rights with regard to the NIGP code. If you have proof to suggest otherwise, I will address it. Otherwise, I am hopeful that fair reporting will result.
Rick Grimm CPPO CPPB
NIGP Chief Executive
piblogger
April 1, 2015
Thank you Rick . . . if you could then, please clarify a couple of points relating to CONTENTION #2 which made reference to Perfect Commerce’s ability (or lack of ability) to “provide conversion services from the State’s existing NIGP Code to the current version of the NIGP Code.”
In Periscope’s formal letter of protest they state; “Perfect Commerce’s Sublicense Agreement does not give them the right to provide such services. In fact, their Sublicense Agreement expressly prohibits the creation of “derivative works” by Perfect Commerce. Additionally, Perfect Commerce indicates in their response an ability to build crosswalks and provide access to all crosswalks provided by Periscope. Perfect Commerce’s Sublicense Agreement does not give them the right to provide such services or intellectual property.”
The above appears to be clear in suggesting that Perfect Commerce does not have the ability “to provide access to all crossroads provided by Periscope.”
So what is it exactly that Periscope can provide that Perfect Commerce cannot?
Also, and given the ubiquitous importance of the NIGP Code, and the apparent need to convert to a current version of said code, who does have the right to perform this necessary service? Does Periscope? Who else?
In terms of the Sublicensing Agreement related to this as well as other rights, are they equally available to everyone. For example, could Perfect Commerce upgrade their license to perform the required service?
piblogger
April 1, 2015
One more question Rick . . . and it may be a small thing, but from whom did Periscope get a copy of NIGP’s letter to Perfect Commerce for inclusion as part of their formal protest letter?
One would think that correspondence of this nature would be limited to the two parties directly involved in the exchange i.e. NIGP and Perfect Commerce?
Upon closer examination, I see that Matt Walker, President, NIGP Code and Consulting Services Periscope Holdings Inc. also signed the letter.
Do you see what I am saying regarding the optics?
Rick Grimm
April 1, 2015
Good afternoon Jon. Since the issues regarding the license breach and cure are in the hands of the attorneys for both parties, it it likely not appropriate, at this time, to delve into the details wihtin the context of a public blog. However, I will ask our NIGP Code represesntatives to provide a general perspective on how the license can be applied in the public procurement work setting while protecting the integrity of the IP. Every software license I’m familar with provides allowances and restrictions. My point is that the NIGP Code is commerically available in the marketplace. However, licensees are expected to comply with the terms and conditions of the license.
To your question on the letter regarding the license breach of March 11, 2015, you will note that it includes the brands of both NIGP and the NIGP Code and signed by principals of both parties. Our contractual agreement with Periscope provides that both parties take mutual responsibility for the legal protections of the Code – so naturally, legal notifications will come from both parties.
Jon, I believe your central theme is that the maintenance and management of the NIGP Code should be performed by a company with no ties to the eProcurement marketplace. But I believe that the Code has greater value because its practical applications can be demontrated in a dynamic setting. If the Code were only available to a specific software developer, this would be deeply troublesome. But the NIGP Code can be licensed by any competing eProcurement solution for any public procurement organization.
Rick Grimm CPPO CPPB
NIGP Chief Executive
piblogger
April 1, 2015
Rick, and no disrespect intended – you have avoided answering the questions for which the answers should be fairly straight forward and forthcoming without reservation.
In an earlier comment in this discussion stream you wrote (and I quote); “The NIGP Code is available via equal access and support to all licensees across the board – including the same ability to utilize the NIGP code on an equal cost basis. All licensees have the same contractual rights with regard to the NIGP code. If you have proof to suggest otherwise, I will address it. Otherwise, I am hopeful that fair reporting will result.”
When I pointed out that the basis per CONTENTION #2 for the Periscope protest of the contract being awarded to Perfect Commerce appears to contradict your assertion i.e.
1. “Perfect Commerce’s Sublicense Agreement does not give them the right to provide such services. In fact, their Sublicense Agreement expressly prohibits the creation of “derivative works” by Perfect Commerce. Additionally, Perfect Commerce indicates in their response an ability to build crosswalks and provide access to all crosswalks provided by Periscope. Perfect Commerce’s Sublicense Agreement does not give them the right to provide such services or intellectual property” and,
2. The above appears to be clear in suggesting that Perfect Commerce does not have the ability “to provide access to all crossroads provided by Periscope.”
I asked three reasonable questions:
1. So what is it exactly that Periscope can provide that Perfect Commerce cannot?
2. Also, and given the ubiquitous importance of the NIGP Code, and the apparent need to convert to a current version of said code, who does have the right to perform this necessary service? Does Periscope? Who else?
3. In terms of the Sublicensing Agreement related to this as well as other rights, are they equally available to everyone. For example, could Perfect Commerce upgrade their license to perform the required service?
Your response to these questions is to lawyer up?
This speaks volumes, and demonstrates a lack of transparency that should not happen with what is an important universal coding system in which access in terms of licensing, support and utilization should be an open book. Your response – or lack thereof – is precisely why the NIGP Code should be administered through an unbiased third party. Periscope is not an unbiased third party for the obvious reasons that I had previously stated.
Based upon the above, and your unwillingness to answer the three simple and straight forward questions, one might be inclined to believe that any and all bids past, present or future in which Periscope has been involved should be subject to review. In those instances where the company was awarded the contracts, said awards might even be challenged by participating vendors given the fact that it does not appear that the licensing practices for the code are both consistent and equitable.
I am really sorry Rick, but there is something seriously amiss. Similar to when baseball had to seek it’s first commissioner following the 1919 Black Sox scandal, I fear that when it comes to the guardianship of the NIGP Code the procurement world desperately needs its version of a Kenesaw Mountain Landis.