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State of Washington NIGP Code Case Study

Coming into 2008, the State of Washington faced a common dilemma related to public procurement: what does the State purchase and how can we make the process more effective?  The State of Washington spends approximately $2.4 billion per year on goods and services across agencies from 50,000 vendors.  However, the State lacked a common structure to tie it all together. “We were facing declining credibility about the scale and scope of business the state brought to market.” said Servando Patlan, Procurement Reform Policy Manager, at the Department of General Administration.

Over the years, the State’s procurement systems had lost a common commodity/services code structure.  This resulted in the state not being able to create accurate spend reports or advertise effectively for bid opportunities through the WEBS bidding system.  Analysis showed that the State was using 5 different code sets across 5 different lines of business within the State.  Some agencies used various forms of the Federal Supply Code, others used homegrown taxonomies that were built and maintained internally.  Without a common standard, comprehensive spend management would not be possible.

The State’s strategy was depicted in the following diagram:

The identified benefits of adopting the NIGP Code included:

  • Promote data sharing across procurement systems in the State;
  • Promote common IT practices;
  • Enable vendor transparency;
  • Enable hierarchical spend transparency;
  • Enable multiple spend transparency;
  • Improve decision making;
  • Provide an integrated end-user experience; and
  • Enable investments in common systems.

The Department of General Administration took the lead for the effort and in February 2008, the Roadmap Positioning Activity Coordinating Team recommended the adoption of the NIGP Commodity/Services Code for the State.  In May of that year, the NIGP Code was adopted under a statewide license agreement.  In addition, the State opted to include crosswalks for the NAICS to NIGP, UNSPSC to NIGP, and MCC to NIGP to the project. Over the course of 2008, training and rollout plans were developed and executed to introduce the Code to users.

Parallel to that effort was the initiative to consolidate the various code structures, inventory and contract databases in the State agencies’ systems.  Twelve different commodity files were identified to be converted to the NIGP Code as part of this effort.  Some were simple conversions to the 5 digit NIGP Code.  Others were inventory and contract databases to be coded to the 7 or 11 digit level.  Agencies included:

  • General Administration
  • Department of Transportation
  • Liquor Control Board
  • Department of Social and Health Services
  • Department of Information Resources
  • Department of Licensing
  • Department of Corrections

“The challenge was finding and removing many duplicate and obsolete commodity descriptions in order to reduce the per code cost of the commodity code conversion.” said Servando Patlan, Procurement Reform Policy Manager, at the Department of General Administration.

Progress was slowed in 2009 and part of 2010 due to budget constraints.  In the fall of 2010, the coding project began in earnest.  The final number of commodities to be converted: over 27,000.  The NIGP Code Services team at Periscope Holdings was tasked with effort of making the conversion happen.  Beginning in October, Periscope ramped up its coding team, hiring an additional 22 coders to perform the work.

By the end of March, the coding work reached completion.  The coding process is iterative, with coders investigating items in conjunction with agency users, cleansing duplicates, enhancing descriptions and making code assignments. “It’s very detail oriented work,” noted NIGP Code Services manager Deborah Hail.  “With varying item description quality, a coding team member sometimes faces many challenges in making the correct code assignments.”

In April, the State switched over its electronic vendor registration and bidding system, WEBS, to the NIGP Code.  Using the crosswalk between the old commodity file and the NIGP Code, the State automatically converted vendor profiles to the NIGP taxonomy.  Vendors were notified to review their profiles and add/modify commodity codes as needed.

The rollout continues at the State, with agency training and implementation support being the primary tasks.  Ancillary cleanup of non-priority files continues as does coding new products and services for inventory of contracts.  As the State’s consolidated spend data builds, the stage is set for reaping the rewards of a common spend database.

Reflecting on the project, Mr. Patlan noted, “In hindsight, we learned that commodity codes are the keys that open many doors to state business and that key must be handled carefully in order to effectively manage the scale and scope of state government business passing through those doors.”

For additional information on Washington’s plan, go to:  http://www.ga.wa.gov/purchase/EACBusinessCase.pdf


Looking forward to 2011

We at Periscope Holdings feel privileged to be able to serve the public procurement community as custodians of the NIGP Code. As part of our efforts to provide the best product possible, we continue to invest in the NIGP Code. This 2010 Annual Report article provides a snapshot of our activities last year, including ongoing efforts and successes.

The NIGP Code remains one of the premier solutions for public sector procurement. It serves as a mechanism for managing master data (vendors, inventory, catalogs), and to enhance the ability of the organization to execute on strategic sourcing initiatives.

Our commitment to service includes:

  • being responsive to the needs of public procurement with a target turnaround time for new codes of one business day;
  • managing the NIGP Code to proactively respond to current market trends in products and services;
  • developing tools and training to increase the benefits to NIGP Code users;
  • working with agencies to identify waste and increase transparency via the use of the NIGP Code; and
  • engaging with the procurement community in dialogue to ensure the continued success of the NIGP Code

Accomplishments for 2010

New users: New Britain, Conn; San Joaquin County, Calif.; New York City Fire Department; Webb County, Texas; North Las Vegas, Nev.; El Paso County, Texas; Washington Department of Labor and Industries; Washington State Department of Corrections; St. Cloud, Fla.; Pearland ISD, Texas; Nye County, Nev.; Fairfield City Council – Australia; Texas Education Service Center Region 16; Sacramento, Calif.; Western Washington University; Gulfport, Miss.; Tucson Unified School District; Southern California Regional Rail Authority (SCRRA)(Metrolink); New York City – Small Business Services; Cherry Creek School District No. 5 (Greenwood Village, Colo); San Antonio, Texas; Atlanta Public Schools; Indianapolis, Ind.; DuPage County, Ill.; Rochester, N.Y.; Ames, Iowa; Tulsa (Okla.) Public Schools ISD #1; Anne Arundel (Md.) Community College; Pierce County Library; and Marion County, Ind.

New codes: As part of our ongoing stewardship of the NIGP Code, we continue to add to the code base, primarily through code requests from users. The creation of new codes helps to ensure that the NIGP Code remains the most responsive codeset for procurement. In 2010, we added two 3-digit classes, 80 five-digit items; 4,651 seven-digit groups and 19,962 eleven-digit details.

Coding services: The NIGP Code services team works with code users to convert existing (legacy) code systems, inventory masters and contracts to the current NIGP Code from the 5- to the 11-digit levels. Our work has resulted in better visibility for inventory and transparency in reporting for Code users.

In 2010, we worked with the following agencies to help manage their master data:

  • Metro Washington Airport Authority (Reagan and Dulles airports) inventory
  • City of Houston, inventory and spend management
  • Sandia Office Supply, coding their product catalog to the 5-digit NIGP Code
  • Harris County, Texas
  • City of San Antonio, coding their inventory to the 5-digit level, identifying a 5 percent reduction in obsolete items as part of the process
  • Fairfax County, Va., inventory
  • State of Washington, conversion of legacy coding structures, inventory and contract files
  • State of Texas, Comptroller of Public Accounts
  • State of Texas, Department of Transportation

Tradeshows. NIGP Annual Forum, NPI, Arizona Regional NIGP Conference and State of Washington NIGP tradeshow.

Marketing of the Code. A direct mail campaign promoted the 20th edition of the NIGP Code book. We continued to develop articles and case studies for the code to demonstrate its value to public procurement

Contribution to development of the profession. This year’s NIGP Essay contest launches with this article and runs through the end of March. Contestants are asked to describe, in 1,000 words or less, how the NIGP Code has added value in promoting diversity in spending by their organization. The winner receives a paid registration to the 2011 NIGP Forum and publication of their entry in GoPro magazine. Other contributions include delivery of conference seminars regarding the NIGP Code; training webinars for users of the NIGP Code to educate agencies on best practices related to the Code and master file management; and NIGP Code Boot Camps to develop implementation approaches and train end users regarding the NIGP Code.

We look forward to continued success in 2011. For more information on the NIGP Code, please visit www.nigp.com.


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