Silent No More: Spend Matters and Buyers Meeting Point Weigh in on #CodeGate by Jon Hansen

Posted on April 20, 2015


On Friday I wrote the post The Silence Of The Blogs (And Industry Analysts).

As I had indicated, while there are without a doubt numerous benefits of being the one to cover a story of significant importance – which I believe the NIGP – Periscope story to be, there is a greater good that must be served through a collective voice of both insight and influence.  Or as I would write in my response to the thoughtful commentary shared with me by Spend Matters’ Pierre Mitchell last evening, “Necessary change – even if it seems inevitable, becomes more likely with more pressing the issue.”

Pierre I am happy to say is not alone, as Buyers Meeting Point’s Kelly Barner also answered the proverbial bell, offering her own unique perspective on what is now known as #CodeGate.

So what did they say?

Here are their thoughts, both of which were posted in the comment stream of my April 6th post NIGP CodeGate’s Deep Throat reveals troubling conflicts of interest at the “non-profit” association. (NOTE: This same discussion stream also includes my second exchange with NIGP Chief Executive Rick Grimm.)

Pierre Mitchell (Spend Matters)

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 – 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:

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.

Kelly Barner (Buyers Meeting Point)

It has been fascinating to watch this story continue to 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?

As more comments from industry bloggers and analysts come in, I will post them.

In the meantime, and as this story continues to build momentum and likely garner similar sentiments from those in the industry at large, will the NIGP members to which Pierre referred do something?  Will the agencies using the NIGP (and NIGP code) stand up to what is clearly an attempt to monopolize the public sector per Kelly’s statement?

One thing is certain, if I were a procurement official such as Ted Coyman in Sarasota County, I would think twice about the sentiments I had expressed in a December 10th, 2014 e-mail to colleagues regarding the Periscope acquisition of BidSync being a good thing, and focus on what it really means to public sector procurement.

A good thing . . . for whom?

A good thing . . . for whom?



Just started following the NIGP #CodeGate story? Use the following link to access the Post Archive;

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