I didn’t have to plant a red flag in a flower pot outside on my apartment balcony – which is a good thing because I don’t live in an apartment . . . nor do I have a balcony.
To start, I do not know the individual who contacted me . . . I won’t even share the name they used because it appears to be, after some research, little more than a quirky play on words pseudonym, as opposed to an authentic identification.
However, and even though it won’t topple a President, what I am about to share with you is nonetheless compelling, in terms of its impact within the sphere of its influence.
Rather than resort to my usual writing prose, I will now provide you with the verbatim exchange I had with a person who, earlier this afternoon, approached me because they had been following my coverage of the NIGP controversy. The reason I am doing it this way is that I do not want the gravity of what was said to be altered or changed to dilute what the individual felt compelled to tell me.
By taking you with me into the shadowed “garage,” you will hopefully be able to assess not only the words, but the actual emotions, and perhaps even motives revealed in the syntax of the person offering this information.
Deep Throat 2015: The relationship is closer than you know . . .
NIGP had a consulting practice for many years. A benefit of NIGP having such a practice was that since it was a not-for-profit whose members were governments (membership is held by the government agency) many governments were not required to obtain competitive bids or proposals for these services. They bought them directly from NIGP.
Several years ago NIGP decided to contract out the management of its consulting practice to guess who-Periscope. Although several firms expressed interest to NIGP in competing for this contract, NIGP awarded the contract to Periscope without competitive bids or Proposals.
Many current and former NIGP board members served as NIGP consultants. It may be interesting to find out if any did so after the consulting practice was taken over by Periscope.
Jean Clark, a past NIGP president, recently retired as Arizona state purchasing director and now heads up one of Periscopes practices. Is there a requirement by Arizona that a former employee have a time of separation before going to work by a state contractor. AZ uses the NIGP code and Periscope’s eprocurement system.
Jean Clark (2011) Past NIGP President now with Periscope
My Response: Unless I am missing something here, the NIGP has abused? its not for profit status to circumvent the bid process and then, behind the scenes (low key) sold that consulting practice to Periscope. In essence, Periscope (a private enterprise) through the NIGP has an unfair competitive advantage that it would not otherwise have. Do I have this right?
In return the NIGP must realize something financially?
As for Jean Clark, and while related, it is an entirely different and more significant issue in its own right.
I will think about it more, but at this point am I missing anything here?
Deep Throat 2015:The consulting work is done under the banner of NIGP. NIGP has contracted with Periscope to manage the consulting practice in a simular manner as managing the NIGP code. I am sure NIGP gets some fee from Periscope for the consulting work they do under the NIGP banner.
What might be more disturbing much of the consulting work NIGP has done is related to a procurement audit of a government’s procurement process. A part of many of the audits has been a recommendation of procurement automation over the years. Since the audit is under the management control of Periscope they are in a perfect position to recommend eprocurement system features that favor their products, all under the banner of NIGP.
Deep Throat 2015: Go to NIGP.org. Click on the bar “Professional Services”. When you see NIGP.com that is Periscope.
So there you have it . . . hidden in plain sight, a relationship that is not so arms length.
You also have the answer as to why what is happening with the Missouri bid protest, has become a flash point for many.
As you read the above, is there a conflict or, is this just simply the way business is done in the public sector?
The fact that I am being contacted by more people with corroborating information means that the battle lines are just being drawn. It also means that this controversy extends well beyond the boundaries of Missouri.
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
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Kelly Barner
April 7, 2015
Whoa whoa whoa… are you trying to tell me that a part private sector part public sector organization has engaged in shady dealings, nepotism and grown a family tree that does not fork?
This is my shocked face… 😐
The problem with stories like this is that they confirm just what everyone thinks they know about public sector organizations. If procurement has a perception problem, the public sector has a perception CRISIS on their hands.
I’ve written about problems in the public sector, from a diversity requirement that forced out a 100% women-owned business because they wouldn’t subcontract to a women owned business to a train car supplier that was selected with obvious evidence of bias and a highly suspect bid package.
But there are great examples of innovation in the public sector as well. Kate Vitasek has shared several examples in her Vested Outsourcing books. The Virgina Public Procurement forum brought together one of the best thought-leader panels imaginable. Until these stories become fewer and further between, we are all going to continue believing in the stereotypical dark image of seedy public dealings. Those of us reading these stories need to fight the urge to feel apathetic in response.
BTW: Here are the articles I referenced on public procurement…
https://procureinsights.wordpress.com/2014/11/13/public-procurement-finds-itself-in-trouble-again-by-kelly-barner/
https://procureinsights.wordpress.com/2013/07/16/how-not-to-follow-a-strategic-sourcing-process-by-kelly-barner/
piblogger
April 9, 2015
Excellent points Kelly, and perhaps an example of how a few bad apples can ruin the entire (public sector) barrel.
What is interesting and appears to be unique about this particular story, is that for whatever reason or reasons, people such as Deep Throat 2015 are coming forward. In fact, I have never previously received as many communications from procurement professionals in either the public or private sector regarding a story such as this.
Whether it comes in the form of simply venting frustration or providing actual information/documentation, I think this is as I wrote in the Gettysburg post – a turning point in our industry’s history.
By the way, here is the link to the Gettysburg post, which includes the first of two perplexing comment streams involving NIGP Chief Executive Rick Grimm; https://procureinsights.wordpress.com/2015/03/31/missouri-award-protest-the-gettysburg-of-public-sector-eprocurement-by-jon-hansen/
piblogger
April 7, 2015
Ironically Kelly, and as you already know, I was the moderator for that panel discussion in Virginia. The panel which included IACCM’s Tim Cummins, Kate Vitasek, and Hackett Group’s Chris Sawchuck, also included NIGP Chief Executive Rick Grimm.
As indicated earlier in my coverage of this unfolding story, I found Rick to be both personable and knowledgeable. Sadly, and when confronted with the facts that contradicted his claim that all licensees shared the same rights under the license agreement, he lawyered up despite initiating the conversation with me in the Gettysburg post here on the PI Blog. This is never a good sign.
All this being said, the only part of your comment with which I might disagree centers on the word apathy. Based on what I am being told by an ever widening number of sources is that the inaction in the past (emphasis on the word past) has less to do with apathy and more to do with a sense of futility. Specifically, and for those who want this situation to be brought out into the open, they have for the most part bit their lips and beared it.
However, the Missouri award challenge by Periscope was the proverbial straw that broke the camels back. In this regard, Pandora’s box has definitely been opened for those who have benefitted from the NIGP – Periscope alliance.
Rick Grimm
April 8, 2015
The information referenced in this blog post regarding the selection of Periscope Holdings as the firm which manages NIGP’s Consultancy Program does not appear to be factually accurate. Please consider the following facts which are contained in documents that are readily available by contacting me at the NIGP Office.
• In June of 2012 the NIGP Board appointed an independent Consultancy Program Assessment Task Force to assess the current internal consultancy program of NIGP and offer recommendations going forward. The task force was chaired by a former CEO of a collaborative non-profit association with no formal ties to NIGP and included both a business leader and senior public procurement practitioners.
• The task force created a competitive Request for Information process that was distributed to interested providers on August 29, 2012. An open, competitive process was utilized.
• The task force received six (6) proposals to the competitive RFI issued by NIGP:
1. BravoSolution submitted by Tom Pellescki
2. Florida Atlantic University’s Public Procurement Research Center submitted by Dr. Cliff McCue
3. IRIS submitted by Sanjeev Drego
4. Periscope Holdings submitted by Chris Kennedy
5. Purchasing OutSource submitted by Jill Klaskin-Press and Tom Blaine
6. RFP Solutions submitted by Devin Crockett
• On December 18, 2012, the Consultancy Program Assessment Task Force submitted a recommendation to the NIGP Board that Periscope be the preferred company to engage for the Consultancy Program based on the Task Force’s assessment of Periscope’s capabilities and understanding of the Program. The NIGP Board approved that recommendation and empowered the Chief Executive to negotiate a consultancy contract with Periscope.
• No current NIGP Board members are NIGP Consultants.
The facts set forth above should make evident that much of the information set forth in the blog post is not accurate. I am always available for a thoughtful conversation with anyone who wishes to understand the facts in this matter or inspect the documents. I practice an open-door policy – whether it is a query from NIGP members, stakeholders, or public citizens – to demonstrate accountability and transparency. You can reach me at (800) FOR-NIGP x235.
piblogger
April 8, 2015
As always Rick, thank you for taking the time to comment on this post.
To start, and for the sake of clarification, in the same way that I shared Deep Throat 2015’s exchange with me verbatim, I have of course posted your comment as written.
The only question I have is what are you thinking?
Let’s put aside for the moment the elephant in the room – which is the apparent conflict of interest relating to the NIGP – Periscope relationship.
We will also overlook your lawyering up – despite claims of openness and transparency – to address my questions relating to your assurances in the Gettysburg post comment stream that (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,” and that “All licensees have the same contractual rights with regard to the NIGP code” even though the Periscope letter of protest regarding the Missouri award contradicts your assertion.
Even with setting aside the above outstanding issues, reading your most recent comment is like watching someone take a painful tumble down the stairs.
Instead of addressing the real issues, you offer in this as well as the previously referenced post’s comments, extraneous elaborations that are more semantical and obfuscating than informative and clarifying. Or to put it another way, you say everything and reveal nothing of any substance.
Let’s look at your statement that Deep Throat 2015’s assertion regarding the selection of Periscope Holdings has the firm which manages NIGP’s consultancy program “does not appear to be factually accurate.” Specifically their claim that “NIGP awarded the contract to Periscope without competitive bids or Proposals.”
You indicate that “The task force created a competitive Request for Information process that was distributed to interested providers on August 29, 2012,” and that “an open, competitive process was utilized.” This is what you wrote Rick.
But an RFI – no matter what terminology with which you attempt to dress it up, is not a competitive bid.
Checking multiple sources, here is how an RFI is described:
“A Request for Information (RFI) is used when you think you know what you want but need more information from the vendors. It will typically be followed by an RFQ or RFP.”
“An RFI is used when you don’t know exactly what you want or you don’t know what is available in the marketplace. The information received as a result of the RFI may assist in determining whether a formal request for bid or proposal is necessary.”
“Request for Information (RFI): An informal document issued when an agency is not aware of the products available in the market which may satisfy its requirements. The use of an RFI does not require a purchase requisition, however a RFI may result in the development of a requisition, or the issuance of an IFB or RFP after an agency determines the types of products that are available which will satisfy its requirements. An RFI cannot be made into an agreement.”
In short Rick, you can preface it with the word competitive or any other adjunct name you wish to use, the process with the NIGP selection of Periscope Holdings started and finished with an RFI.
Based on the above, Deep Throat 2015 would appear to be correct in their assertion that the “NIGP awarded the contract to Periscope without competitive bids or Proposals.” Some might even suggest that the “competitive” RFI as you call it was more for show than anything else. An elaborate effort to lend an air of legitimacy to a process in which the outcome had already been decided.
Let’s look at your second point of semantic contention.
You state “No current NIGP Board Members are NIGP consultants.”
I presume that this is in direct response to Deep Throat 2015’s comment that “Many current and former NIGP board members served as NIGP consultants (emphasis on the word served by me), and that “It may be interesting to find out if any did so after the consulting practice was taken over by Periscope.”
Nowhere in the above statement do I see any reference to, or suggestion that, a current NIGP board member is currently an NIGP consultant. Your statement therefore has no relevance.
This being said, I have to wonder why you would even bother to mention it? Why respond to a statement that wasn’t even made? Either you read it wrong, or there is something more to it.
Perhaps it has something to do with the fact that Jean Clark – the NIGP Past President and the former Arizona State Purchasing Director, is now employed by Periscope?
In the end Rick, and as previously stated, every time you comment you make yours as well as the NIGP’s and Periscope’s situation look that much worse.
Anya@MarketDojo
April 9, 2015
Still a fledgling in the Procurement world at just over one month in- this has taught me a lot about the Public Sector!
Although as I have not lived under a rock for all 24 years of my life, I haven’t exactly been unaware of the not-so-positive connotations that public spend and public dealings draw.
I suppose everyone has their hand in some else’s pocket… Thank you to Mr (or Mrs?) Deep Throat for kindly sharing this insightful tale with you!
piblogger
April 9, 2015
Although I have been around a lot longer Anya, the revelations of Deep Throat 2015 and the result of my ongoing research is still surprising.
Pierre Mitchell
April 19, 2015
Jon, you are on the right side of this issue, and I appreciate your willingness to fight for what is right.
At SpendMatters, we haven’t made friends at groups like SAP, AT Kearney, CIPS, and others for speaking out on certain issues, but sometimes you just need to do the right thing and say what needs to be said. In this case, if you have a non-profit (and a non-profit representing purchasing organizations!) that developed a data standard that gets transferred to a for-profit firm, and both groups aggressively protect that single standard (with the same name as the non-profit!) and advocate its use in the Institute’s community, This [effectively] creates a monopoly and it does indeed seem to create a fundamental conflict of interest (and violation with the spirit of the mentioned code of ethics). If I was a government acquisitions entity, and a member of an association like this with such a code of ethics, I would basically need to NOT use this code because of the fact that doing so would in fact violate that code of ethics. I would also express my displeasure to my association for in fact creating this embarrassing situation in the first place.
I won’t dive into the particulars of this situation since you are doing this actively, but all I can say is that, by definition, you can’t have a true standard that is owned by a single commercial entity, and if you do, you would want to at least be comfortable that the owner is willing to offer it up because doing so will bring good brand recognition and respect. For example, even Ariba (SAP) offers up cXML as a standard that everyone can use if they want (whether they want to is a different story). On the flip side, there was a catalog vendor named Requisite Technology that wanted to patent its catalog schema called “Requisite Unified Schema” and offer it up as an industry standard. Guess what – it died on the vine. However, things like RosettaNet (developed by High-Tech industry players) and UN/SPSC are all now managed by GS1.org – not a commercial entity. UN/SPSC is a great example actually. It came out of D&B, but D&B isn’t trying to sue everyone using it – or even ‘cross-walking’ to it! Rather, you are free to use it, but can join the paid membership at various levels to be able to have a say in its future development. Here is the site: http://www.unspsc.org/membership.
Nobody says that non-profits can’t make money, but they have to do it the right way. It’s fine for a non-profit association to advocate for standards and to even develop standards, but they must be open. The non-profit can also have commercial partners. For example, you could have partners who offer training, data conversion services, hosted catalogs, etc. BUT, you have make the partnership opportunities open to all. You can’t be a market maker and a market supplier at the same time – especially as a procurement association!
In a free market, these type of problems are almost always ‘self-correcting’, and I hope this will be the case here. But a truly free market is one that is transparent, and I applaud you for bringing some transparency to this issue, and hopefully the message will be embraced by the NIGP members who are really the only ones who have the power AND the inclination to change this obviously bad situation. Keep fighting the good fight.
piblogger
April 19, 2015
Pierre, thank you for taking the time to provide such a thoughtful commentary with the added insight from your own experience.
Necessary change – even if it seems inevitable, becomes more likely with more pressing the issue. As such your voice, as well as those of others, need to be heard.
Kelly Barner
April 20, 2015
It has been fascinating to watch this story continues unfold…
What I hope from this is that the public sector agencies that use NIGP realize that they can be the beneficiaries of the free market. There are qualified alternatives to NIGP should they choose to make a change. Enough other groups have looked the downsides of the switch in the face and made the decision to move away from NIGP anyway.
‘Standards’ have a way of feeling inevitable – even when they are not mandated standards. The next period of time in the public sector could prove quite illuminating. Will the agencies using NIGP confirm the worst stereotype of public procurement by staying the course regardless of these troubling developments, or will they surprise us by rising up and saying ‘enough,’ either collectively or individually and gradually over time?
piblogger
April 20, 2015
Good observations Kelly . . . how can anyone in the public sector stay the course with the NIGP, given what we now know.
The question is, what will the NIGP do relative to this crisis of creditability? Their next steps may very well determine the future of the organization.