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Coming into 2008, the state of Washington faced a common dilemma related to public procurement: What does the state purchase and how can the process become more effective?

The state spends approximately $2.4 billion a year across agencies on goods and services from 50,000 vendors. However, Washington 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," says Servando Patlan, procurement reform policy manager at the state Department of General Administration.

Over the years, Washington's procurement systems had lost a common commodity/services code structure. As a result, the state was not able to create accurate spend reports or advertise effectively for bid opportunities through its WEBS electronic vendor registration and bidding system. Analysis showed that the state was using five different code sets across five different lines of business. Some agencies used various forms of the Federal Supply Code, others used homegrown taxonomies that were built and maintained internally. With no common standard, comprehensive spend management would be impossible.

The state adopted a strategy to standardize commodity coding using the NIGP Code to enable it to categorize and communicate to vendors what the state wants to buy, thus enabling more firms to participate and get more value for the state (See diagram on page 10).

The identified benefits of adopting the NIGP Code included:

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

The Department of General Administration took the lead, 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 from other coding systems as part of the project: NAICS to NIGP, UNSPSC to NIGP, and MCC to NIGP. Over the course of 2008, training and rollout plans were developed and executed to introduce the Code to users.

Parallel to that effort was an 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 five-digit NIGP Code. Others were inventory and contract databases to be coded to the seven- 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," says Patlan.