With regards to the NIGP Code, are States forfeiting their future for the sake of a questionable past? by Jon Hansen

Posted on April 3, 2015


“Just to be clear . . . one of the main reasons why States don’t just jump to the United Nation’s Code is that without a crosswalk, historic spend data that is tied into the NIGP Code would be lost?  Based on my research to date, it appears that with the exception of a handful of States, and outside of a number of  institutionalized reports, the purported loss and/or inconvenience of making the switch would be outweighed by the vulnerability and associated risks of dealing with a monopolized standard that leaves “licensee’s” such as governments and vendors open to the kind of bullying demonstrated by the Missouri award protest. 

I made the above comment based on the fact that my research indicates that the United Nations Standard Products and Services Code® (UNSPSC®) is an “open, global, multi-sector standard for efficient, accurate classification of products and services” – that also happens to be technically free.

Conversely, and as revealed in my recent coverage of the Missouri award protest, open and free are not terms one would associate with the NIGP Code.

Now I am not suggesting that every State or government agency using the NIGP Code make a wholesale switch over to the UNSPSC tomorrow.  (Note: In an upcoming post I will examine the UNSPSC Code in greater detail, as well as what a transition from the NIGP Code would entail.) What I am saying is that given the obvious vulnerabilities that have now come to light as a result of the current NIGP – Periscope custodianship, an alternative needs to be found.  Especially when the general public is made aware of the situation.

NIGP Silver or Lead

The NIGP – Periscope Way?

Once the arbitrary imposition of a monopolistic coding system, and its impact on what is supposed to be a free and open bid process becomes known to the everyday taxpayer, the situation has the potential to go well beyond the control of the present and relatively small group of interested parties.

Can you imagine what a politician would do with a story like this?  How would State’s explain their coming under the thumb of a purported non-profit entity such as the NIGP who, through what appears to be a non-arms length relationship with a private entity, wields enough power to the point that they can dictate to individual States who and who cannot provide the needed service capability to maintain the Code’s ongoing veracity.  Taking such a stand might even get a candidate elected (or re-elected).

Putting aside for the time being, the financial ramifications of the present licensing practice, the mere optics alone are likely enough to get the general public both interested and up in arms.

Within this context, one would have to ask themselves just how important is the NIGP Code and the historic data relating to its maintenance? According to my preliminary research, 33 States currently use the NIGP Code.  I wonder what the other 17 States are using?

My point is relatively simple.  It is far better for all parties to take proactive action now.

NIGP Change

For example, and in much the same way that GS1 oversees the UNSPSC code, why couldn’t the National Association of State Procurement Officials otherwise known as NASPO be given similar charge over the NIGP Code?

Besides ensuring that the Code is truly open and equally accessible to the betterment of all, NASPO could even reduce the significant licensing fees so that even if it isn’t free, it is no longer a cash cow at the expense of licensees.

Of course there is one not so small problem with the above suggestion . . . NIGP and Periscope, and in particular Parthenon.  I would hazard a guess that no one in this trio would have expected this test shot over the Missouri bow to have attracted anyone’s attention outside of those directly involved.  This being said, I am certain that the brain trust behind these organizations – okay Parthenon, while maybe surprised this first go around, will be better prepared the next time a move is made to monopolize the public sector eProcurement market.

For this reason alone, action must be taken.  This is why the option to either make a switch over to the UNSPSC Code or transfer the stewardship to a party who will ensure fair access to licensees, thus maintaining the integrity of the bid process, should be seriously considered.

Once again, the above might represent nothing more than the anecdotal musings of a creative writing mind . . . but then again, consider the last time.


Just started following the NIGP #CodeGate story? Use the following link to access the Post Archive; https://procureinsights.wordpress.com/nigp-codegate/

Follow my coverage of this story on Twitter using the hashtags #missbid and #CodeGate

On The Go? You can also listen to the audio version of this post as well as others through @Umano https://umano.me/jhansen