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The Grimm Facts (Part 1)

The following is the first of a 2-Part exchange with NIGP Chief Executive Rick Grimm regarding the growing controversy surrounding possible conflicts of interest at the NIGP through their relationship with Periscope Holdings. This exchange is from the comment section of the March 31st, 2015 Procurement Insights post titled "Missouri Award Protest: The Gettysburg of Public Sector eProcurement." Here is the link to that post: https://procureinsights.wordpress.com/2015/03/31/missouri-award-protest-the-gettysburg-of-public-sector-eprocurement-by-jon-hansen/ Follow this story through Twitter using the hashtags #missbid and #CodeGate

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The GrimmFacts (Part 1)
Rick Grimm, NIGPChiefExecutive
Jon,allowme to clarify,forthe record,some inaccuraciesreportedinyourblog.Asalways,youshould
feel comfortablereachingouttome and the Institute onanyissuesthatconcernyou so that you are in
the bestpositiontoreportthe facts. I will alwaysbe accountable,openandtransparent.
NIGPdoesnot standbehindasingle eProcurementvendor.NIGPdoesnotendorse anyspecific
eProcurementvendor.NIGPonlyendorsesprogramsownedbyNIGPandwhichcarry the NIGPbrand as
a NIGP productor service.Suchisthe case withthe NIGPcode – a commodityandservice coding
structure that isutilizedbymore than1,030 publicentities(including29 stateswhichhave rathera site
license ora statewide license).NIGPownsthe IPtothe NIGPCode and contracts withPersicope to
manage and marketthe Code on itsbehalf.
The NIGP Code isavailable toanypublicentityoreProcurementsoftware providerthatwishestoinstall
the code intotheirdatasystemsviaa license agreement.Inadditiontothe 1,000 + publicentities,20
private sectorfirmsservingthe publicsectorcommunityhave electedtolicensethe NIGPCode.Thisis
hardlyconstraintof trade or absolute power.Periscope’scompetitorshave accesstothe Code as a NIGP
Code licensee.
NIGPis nota party tothe appeal submittedbyPeriscope onarecentState of Missouri eProcurement
solicitation.NIGPwasnota bidderandtherefore hasnorightsto an appealsprocess.However,we
discoveredthatone of the biddersmayhave misrepresenteditslicense agreementwithNIGPforthe
NIGPCode;whichcouldhave an impacton the bidder’sabilitytocomplywiththe termsandconditions
setforth bythe State.As ownerof the NIGP Code,we have the rightand responsibilitytoensure the
license isproperlyutilized.
NIGPhas writtentoPerfectCommerce withanintenttoterminate the license agreementbutwhichalso
gave the companyan opportunitytocure the license breach.Thisisstandardprotocol andprovidesthe
companywithdue process.The matteris currentlybeingfacilitatedthroughlegal channels.
The bottom line:There isnoconstraintof trade or absolute powerbecause the NIGPCode isavailableto
any firmor publicentitythatwishestolicensethe Code.Like anysoftware agreements,the license
includesprovisionsforusingthe IPandwhenthese provisionsare violated,the ownerhasthe rightto
terminate the agreementif the violationsare notcuredwithinaprescribedperiodof time.Andfinally,
NIGPdoesnot endorse eProcurementproducts.
Rick GrimmCPPOCPPB
NIGPChief Executive
Jon Hansen, ProcurementInsights
Thank youfor takingthe time torespondRick.I appreciate it.
But here isthe problem.. .
Back in DecemberI wrote a post– the linkto whichIhad providedinthe articles –regardingPeriscope’s
acquisitionof BidSync.InitIraisedthe questionregardingwhat,if anyimpact,itmighthave onthe
publicsectorgivenPersiscope’scustodianshipof the NIGPcode. A reasonable contemplationIwould
think.
Here you have Periscope who,onthe one hand,islicensingthe NIGPcode toPerfectCommerce,while
alsocompetingwiththemforthe same contract.
Thenas part of Periscope’sofficial ProtestLetterthatwassentto Missouri,theyinclude onpages7to 9
a copy of the letterthatthe NIGPsentto PerfectCommerce.
The opticsin and of itself are bad,as highlightedbythe pointsraisedinthispost.
The fact remainsthat the custodianof the NIGPcode responsible forlicensingrightsshouldnotbe an
organizationthatisalsogoingto compete againstthe veryfirmstowhomit issuesandmanagessaid
licensesonbehalf of the NIGP.
It shouldinsteadbe anindependententitythatprovidesequal accessandsupporttoall licenseesacross
the board – includingthe same abilitytoutilize the NIGPcode onan equal costbasis.Or to putit
anotherway,all licenseesshouldhave the same contractual rightswithregardtothe NIGPcode.
Thisbeingsaid,andbasedon the preliminaryfeedbackthatIhave received –whichwill alsobe the
subjectof an upcomingpost,itappearsthat the current arrangementwithPeriscope asitstandsis
actuallyinconflictwiththe NIGP’smandate toprovide supporttoprofessionalsinthe publicsector
purchasingprofession.
To put thisinits propercontext,Missouri made adecisiontogowitha vendor.By beingaparty to the
challenge of saidcontractaward i.e.inclusioninthe Periscopeprotestletter,the NIGPisinessence
goingagainstthe verypeople itissupposedtosupport.Atleastthatis how it appears.
Once again Rick,the opticsare justbad.
Rick Grimm, NIGPChiefExecutive
Jon,I wouldappreciate the opportunitytoconverse aboutthis.Yourinformationiswrong.Checkthe
facts.The NIGPCode is available viaequalaccessandsupportto all licenseesacrossthe board –
includingthe same abilitytoutilize the NIGPcode onanequal cost basis.All licenseeshave the same
contractual rightswithregard to the NIGPcode.If youhave proof to suggestotherwise,Iwill addressit.
Otherwise,Iamhopeful thatfairreportingwillresult.
Rick GrimmCPPOCPPB
NIGPChief Executive
Jon Hansen, ProcurementInsights
Thank youRick . . . if youcouldthen,please clarifyacouple of pointsrelatingtoCONTENTION #2which
made reference toPerfectCommerce’sability(orlackof ability) to“provide conversionservicesfrom
the State’sexistingNIGPCode tothe currentversionof the NIGPCode.”
In Periscope’sformal letterof protesttheystate;“PerfectCommerce’sSublicenseAgreementdoesnot
give themthe rightto provide suchservices.Infact,theirSublicense Agreementexpresslyprohibitsthe
creationof “derivative works”byPerfectCommerce.Additionally,Perfect Commerce indicatesintheir
response anabilitytobuildcrosswalksandprovideaccesstoall crosswalksprovidedbyPeriscope.
PerfectCommerce’sSublicenseAgreementdoesnotgive themthe righttoprovide suchservicesor
intellectual property.”
The above appearsto be clear insuggestingthatPerfectCommerce doesnothave the ability“toprovide
access to all crossroadsprovidedbyPeriscope.”
So whatis itexactlythatPeriscope canprovide thatPerfectCommerce cannot?
Also,andgiventhe ubiquitousimportance of the NIGPCode,andthe apparentneedtoconverttoa
currentversionof saidcode,whodoeshave the right to performthisnecessaryservice?Does
Periscope?Whoelse?
In termsof the SublicensingAgreementrelatedtothisaswell asotherrights,are theyequallyavailable
to everyone.Forexample,couldPerfectCommerce upgrade theirlicense toperformthe required
service?
One more questionRick.. . and it maybe a small thing,butfromwhomdidPeriscope getacopy of
NIGP’slettertoPerfectCommerce forinclusionaspartof theirformal protestletter?
One wouldthinkthatcorrespondence of thisnature wouldbe limitedtothe twopartiesdirectly
involvedinthe exchangei.e.NIGPandPerfectCommerce?
Upon closerexamination,Isee thatMatt Walker,President,NIGPCode andConsultingServices
Periscope HoldingsInc.alsosignedthe letter.
Do yousee what I am sayingregardingthe optics?
Rick Grimm, NIGPChiefExecutive
Good afternoonJon.Since the issuesregarding the license breachandcure are in the handsof the
attorneysforbothparties,itit likelynotappropriate,atthistime,todelve intothe detailswihtinthe
contextof a publicblog.However,Iwill askourNIGPCode represesntativestoprovide ageneral
perspective onhowthe licensecanbe appliedinthe publicprocurementworksettingwhileprotecting
the integrityof the IP.Everysoftware licenseI’mfamilarwithprovidesallowancesandrestrictions.My
pointisthat the NIGP Code iscommericallyavailableinthe marketplace.However,licenseesare
expectedtocomplywiththe termsandconditionsof the license.
To your questiononthe letterregardingthe license breachof March11, 2015, youwill note thatit
includesthe brandsof bothNIGPand the NIGP Code andsignedbyprincipalsof bothparties.Our
contractual agreementwithPeriscope providesthatbothpartiestake mutual responsibilityforthe legal
protectionsof the Code – so naturally,legal notificationswill come frombothparties.
Jon,I believeyourcentral theme isthatthe maintenance andmanagementof the NIGPCode shouldbe
performedbya companywithnotiesto the eProcurementmarketplace.ButIbelieve thatthe Code has
greatervalue because itspractical applicationscanbe demontratedinadynamicsetting.If the Code
were onlyavailabletoa specificsoftware developer,thiswouldbe deeplytroublesome.Butthe NIGP
Code can be licensedbyanycompetingeProcurementsolutionforanypublicprocurementorganization.
Rick GrimmCPPOCPPB
NIGPChief Executive
Jon Hansen, ProcurementInsights
Rick,and no disrespectintended –youhave avoidedansweringthe questionsforwhichthe answers
shouldbe fairlystraightforwardandforthcomingwithoutreservation.
In an earliercommentinthisdiscussionstreamyouwrote (andIquote);“The NIGPCode isavailable via
equal accessand supportto all licenseesacrossthe board – includingthe same abilitytoutilize the NIGP
code on an equal costbasis.All licenseeshave the same contractual rightswithregardtothe NIGPcode.
If you have proof to suggestotherwise,Iwill addressit.Otherwise,Iamhopeful thatfairreportingwill
result.”
WhenI pointedoutthatthe basisperCONTENTION #2 for the Periscope protestof the contractbeing
awardedto PerfectCommerce appearstocontradictyourassertioni.e.
1. “PerfectCommerce’sSublicense Agreementdoesnotgive themthe righttoprovide suchservices.In
fact, theirSublicense Agreementexpresslyprohibitsthe creationof “derivativeworks”byPerfect
Commerce.Additionally,PerfectCommerce indicatesintheirresponseanabilitytobuildcrosswalksand
provide accesstoall crosswalksprovidedbyPeriscope.PerfectCommerce’sSublicenseAgreementdoes
not give themthe rightto provide suchservicesorintellectual property”and,
2. The above appearsto be clearin suggestingthatPerfectCommerce doesnothave the ability“to
provide accesstoall crossroads providedbyPeriscope.”
I askedthree reasonable questions:
1. So what isit exactlythatPeriscope canprovide thatPerfectCommerce cannot?
2. Also,and giventhe ubiquitousimportance of the NIGPCode,andthe apparentneedtoconvertto a
currentversionof saidcode,whodoeshave the right to performthisnecessaryservice?Does
Periscope?Whoelse?
3. In termsof the SublicensingAgreementrelatedtothisaswell asotherrights,are theyequally
available toeveryone.Forexample,couldPerfectCommerce upgrade theirlicense toperformthe
requiredservice?
Your response tothese questionsistolawyerup?
Thisspeaksvolumes,anddemonstratesalackof transparencythat shouldnothappenwithwhatisan
importantuniversal codingsysteminwhichaccessintermsof licensing,supportandutilizationshould
be an openbook.Your response –or lackthereof – ispreciselywhythe NIGPCode shouldbe
administeredthroughanunbiasedthirdparty.Periscope isnotanunbiasedthirdpartyforthe obvious
reasonsthat I hadpreviouslystated.
Baseduponthe above, andyourunwillingnesstoanswerthe three simple andstraightforward
questions,one mightbe inclinedtobelieve thatanyandall bidspast,presentorfuture inwhich
Periscope hasbeeninvolvedshouldbe subjecttoreview.Inthose instanceswhere the companywas
awardedthe contracts,said awardsmightevenbe challengedbyparticipatingvendorsgiventhe fact
that itdoesnot appearthat the licensingpracticesforthe code are both consistentandequitable.
I am reallysorryRick,but there issomethingseriouslyamiss.Similartowhenbaseball hadtoseekits
firstcommissionerfollowingthe 1919 BlackSox scandal,I fearthat whenitcomesto the guardianshipof
the NIGP Code the procurementworlddesperatelyneedsitsversionof aKenesaw Mountain Landis.

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The Grimm Facts (Part 1)

  • 1. The GrimmFacts (Part 1) Rick Grimm, NIGPChiefExecutive Jon,allowme to clarify,forthe record,some inaccuraciesreportedinyourblog.Asalways,youshould feel comfortablereachingouttome and the Institute onanyissuesthatconcernyou so that you are in the bestpositiontoreportthe facts. I will alwaysbe accountable,openandtransparent. NIGPdoesnot standbehindasingle eProcurementvendor.NIGPdoesnotendorse anyspecific eProcurementvendor.NIGPonlyendorsesprogramsownedbyNIGPandwhichcarry the NIGPbrand as a NIGP productor service.Suchisthe case withthe NIGPcode – a commodityandservice coding structure that isutilizedbymore than1,030 publicentities(including29 stateswhichhave rathera site license ora statewide license).NIGPownsthe IPtothe NIGPCode and contracts withPersicope to manage and marketthe Code on itsbehalf. The NIGP Code isavailable toanypublicentityoreProcurementsoftware providerthatwishestoinstall the code intotheirdatasystemsviaa license agreement.Inadditiontothe 1,000 + publicentities,20 private sectorfirmsservingthe publicsectorcommunityhave electedtolicensethe NIGPCode.Thisis hardlyconstraintof trade or absolute power.Periscope’scompetitorshave accesstothe Code as a NIGP Code licensee. NIGPis nota party tothe appeal submittedbyPeriscope onarecentState of Missouri eProcurement solicitation.NIGPwasnota bidderandtherefore hasnorightsto an appealsprocess.However,we discoveredthatone of the biddersmayhave misrepresenteditslicense agreementwithNIGPforthe NIGPCode;whichcouldhave an impacton the bidder’sabilitytocomplywiththe termsandconditions setforth bythe State.As ownerof the NIGP Code,we have the rightand responsibilitytoensure the license isproperlyutilized. NIGPhas writtentoPerfectCommerce withanintenttoterminate the license agreementbutwhichalso gave the companyan opportunitytocure the license breach.Thisisstandardprotocol andprovidesthe companywithdue process.The matteris currentlybeingfacilitatedthroughlegal channels. The bottom line:There isnoconstraintof trade or absolute powerbecause the NIGPCode isavailableto any firmor publicentitythatwishestolicensethe Code.Like anysoftware agreements,the license includesprovisionsforusingthe IPandwhenthese provisionsare violated,the ownerhasthe rightto terminate the agreementif the violationsare notcuredwithinaprescribedperiodof time.Andfinally, NIGPdoesnot endorse eProcurementproducts. Rick GrimmCPPOCPPB NIGPChief Executive Jon Hansen, ProcurementInsights Thank youfor takingthe time torespondRick.I appreciate it. But here isthe problem.. .
  • 2. Back in DecemberI wrote a post– the linkto whichIhad providedinthe articles –regardingPeriscope’s acquisitionof BidSync.InitIraisedthe questionregardingwhat,if anyimpact,itmighthave onthe publicsectorgivenPersiscope’scustodianshipof the NIGPcode. A reasonable contemplationIwould think. Here you have Periscope who,onthe one hand,islicensingthe NIGPcode toPerfectCommerce,while alsocompetingwiththemforthe same contract. Thenas part of Periscope’sofficial ProtestLetterthatwassentto Missouri,theyinclude onpages7to 9 a copy of the letterthatthe NIGPsentto PerfectCommerce. The opticsin and of itself are bad,as highlightedbythe pointsraisedinthispost. The fact remainsthat the custodianof the NIGPcode responsible forlicensingrightsshouldnotbe an organizationthatisalsogoingto compete againstthe veryfirmstowhomit issuesandmanagessaid licensesonbehalf of the NIGP. It shouldinsteadbe anindependententitythatprovidesequal accessandsupporttoall licenseesacross the board – includingthe same abilitytoutilize the NIGPcode onan equal costbasis.Or to putit anotherway,all licenseesshouldhave the same contractual rightswithregardtothe NIGPcode. Thisbeingsaid,andbasedon the preliminaryfeedbackthatIhave received –whichwill alsobe the subjectof an upcomingpost,itappearsthat the current arrangementwithPeriscope asitstandsis actuallyinconflictwiththe NIGP’smandate toprovide supporttoprofessionalsinthe publicsector purchasingprofession. To put thisinits propercontext,Missouri made adecisiontogowitha vendor.By beingaparty to the challenge of saidcontractaward i.e.inclusioninthe Periscopeprotestletter,the NIGPisinessence goingagainstthe verypeople itissupposedtosupport.Atleastthatis how it appears. Once again Rick,the opticsare justbad. Rick Grimm, NIGPChiefExecutive Jon,I wouldappreciate the opportunitytoconverse aboutthis.Yourinformationiswrong.Checkthe facts.The NIGPCode is available viaequalaccessandsupportto all licenseesacrossthe board – includingthe same abilitytoutilize the NIGPcode onanequal cost basis.All licenseeshave the same contractual rightswithregard to the NIGPcode.If youhave proof to suggestotherwise,Iwill addressit. Otherwise,Iamhopeful thatfairreportingwillresult. Rick GrimmCPPOCPPB NIGPChief Executive Jon Hansen, ProcurementInsights Thank youRick . . . if youcouldthen,please clarifyacouple of pointsrelatingtoCONTENTION #2which made reference toPerfectCommerce’sability(orlackof ability) to“provide conversionservicesfrom the State’sexistingNIGPCode tothe currentversionof the NIGPCode.”
  • 3. In Periscope’sformal letterof protesttheystate;“PerfectCommerce’sSublicenseAgreementdoesnot give themthe rightto provide suchservices.Infact,theirSublicense Agreementexpresslyprohibitsthe creationof “derivative works”byPerfectCommerce.Additionally,Perfect Commerce indicatesintheir response anabilitytobuildcrosswalksandprovideaccesstoall crosswalksprovidedbyPeriscope. PerfectCommerce’sSublicenseAgreementdoesnotgive themthe righttoprovide suchservicesor intellectual property.” The above appearsto be clear insuggestingthatPerfectCommerce doesnothave the ability“toprovide access to all crossroadsprovidedbyPeriscope.” So whatis itexactlythatPeriscope canprovide thatPerfectCommerce cannot? Also,andgiventhe ubiquitousimportance of the NIGPCode,andthe apparentneedtoconverttoa currentversionof saidcode,whodoeshave the right to performthisnecessaryservice?Does Periscope?Whoelse? In termsof the SublicensingAgreementrelatedtothisaswell asotherrights,are theyequallyavailable to everyone.Forexample,couldPerfectCommerce upgrade theirlicense toperformthe required service? One more questionRick.. . and it maybe a small thing,butfromwhomdidPeriscope getacopy of NIGP’slettertoPerfectCommerce forinclusionaspartof theirformal protestletter? One wouldthinkthatcorrespondence of thisnature wouldbe limitedtothe twopartiesdirectly involvedinthe exchangei.e.NIGPandPerfectCommerce? Upon closerexamination,Isee thatMatt Walker,President,NIGPCode andConsultingServices Periscope HoldingsInc.alsosignedthe letter. Do yousee what I am sayingregardingthe optics? Rick Grimm, NIGPChiefExecutive Good afternoonJon.Since the issuesregarding the license breachandcure are in the handsof the attorneysforbothparties,itit likelynotappropriate,atthistime,todelve intothe detailswihtinthe contextof a publicblog.However,Iwill askourNIGPCode represesntativestoprovide ageneral perspective onhowthe licensecanbe appliedinthe publicprocurementworksettingwhileprotecting the integrityof the IP.Everysoftware licenseI’mfamilarwithprovidesallowancesandrestrictions.My pointisthat the NIGP Code iscommericallyavailableinthe marketplace.However,licenseesare expectedtocomplywiththe termsandconditionsof the license. To your questiononthe letterregardingthe license breachof March11, 2015, youwill note thatit includesthe brandsof bothNIGPand the NIGP Code andsignedbyprincipalsof bothparties.Our contractual agreementwithPeriscope providesthatbothpartiestake mutual responsibilityforthe legal protectionsof the Code – so naturally,legal notificationswill come frombothparties. Jon,I believeyourcentral theme isthatthe maintenance andmanagementof the NIGPCode shouldbe performedbya companywithnotiesto the eProcurementmarketplace.ButIbelieve thatthe Code has
  • 4. greatervalue because itspractical applicationscanbe demontratedinadynamicsetting.If the Code were onlyavailabletoa specificsoftware developer,thiswouldbe deeplytroublesome.Butthe NIGP Code can be licensedbyanycompetingeProcurementsolutionforanypublicprocurementorganization. Rick GrimmCPPOCPPB NIGPChief Executive Jon Hansen, ProcurementInsights Rick,and no disrespectintended –youhave avoidedansweringthe questionsforwhichthe answers shouldbe fairlystraightforwardandforthcomingwithoutreservation. In an earliercommentinthisdiscussionstreamyouwrote (andIquote);“The NIGPCode isavailable via equal accessand supportto all licenseesacrossthe board – includingthe same abilitytoutilize the NIGP code on an equal costbasis.All licenseeshave the same contractual rightswithregardtothe NIGPcode. If you have proof to suggestotherwise,Iwill addressit.Otherwise,Iamhopeful thatfairreportingwill result.” WhenI pointedoutthatthe basisperCONTENTION #2 for the Periscope protestof the contractbeing awardedto PerfectCommerce appearstocontradictyourassertioni.e. 1. “PerfectCommerce’sSublicense Agreementdoesnotgive themthe righttoprovide suchservices.In fact, theirSublicense Agreementexpresslyprohibitsthe creationof “derivativeworks”byPerfect Commerce.Additionally,PerfectCommerce indicatesintheirresponseanabilitytobuildcrosswalksand provide accesstoall crosswalksprovidedbyPeriscope.PerfectCommerce’sSublicenseAgreementdoes not give themthe rightto provide suchservicesorintellectual property”and, 2. The above appearsto be clearin suggestingthatPerfectCommerce doesnothave the ability“to provide accesstoall crossroads providedbyPeriscope.” I askedthree reasonable questions: 1. So what isit exactlythatPeriscope canprovide thatPerfectCommerce cannot? 2. Also,and giventhe ubiquitousimportance of the NIGPCode,andthe apparentneedtoconvertto a currentversionof saidcode,whodoeshave the right to performthisnecessaryservice?Does Periscope?Whoelse? 3. In termsof the SublicensingAgreementrelatedtothisaswell asotherrights,are theyequally available toeveryone.Forexample,couldPerfectCommerce upgrade theirlicense toperformthe requiredservice? Your response tothese questionsistolawyerup? Thisspeaksvolumes,anddemonstratesalackof transparencythat shouldnothappenwithwhatisan importantuniversal codingsysteminwhichaccessintermsof licensing,supportandutilizationshould be an openbook.Your response –or lackthereof – ispreciselywhythe NIGPCode shouldbe administeredthroughanunbiasedthirdparty.Periscope isnotanunbiasedthirdpartyforthe obvious reasonsthat I hadpreviouslystated.
  • 5. Baseduponthe above, andyourunwillingnesstoanswerthe three simple andstraightforward questions,one mightbe inclinedtobelieve thatanyandall bidspast,presentorfuture inwhich Periscope hasbeeninvolvedshouldbe subjecttoreview.Inthose instanceswhere the companywas awardedthe contracts,said awardsmightevenbe challengedbyparticipatingvendorsgiventhe fact that itdoesnot appearthat the licensingpracticesforthe code are both consistentandequitable. I am reallysorryRick,but there issomethingseriouslyamiss.Similartowhenbaseball hadtoseekits firstcommissionerfollowingthe 1919 BlackSox scandal,I fearthat whenitcomesto the guardianshipof the NIGP Code the procurementworlddesperatelyneedsitsversionof aKenesaw Mountain Landis.