Planting the seeds for a green Code
Keith Glatz, purchasing and contracts manager for the city of Tamarac, Fla., faced a dilemma. The city council had passed a citywide green initiative directing all departments to purchase green products whenever possible. While the goal of the green order was noble, the directive left a trail of questions for the purchasing department, such as:
- What is a green product?
- Do we have green terms and conditions in our contracts?
- How do we sift this information out of our existing purchase history?
- How do we track it going forward?
As for the last bullet point, city officials had tasked Glatz with developing an online system that would enable all city employees — “from the purchasing manager down to the office clerk in the public works garage,” Glatz noted — to track green products purchased. Easier said than done.
“Unfortunately, our internal ERP platform did not provide a good opportunity for us to track green commodities, so we quickly realized that the only consistent way to do this was to do it the right way,” Glatz said. “And that meant advocating a change to the NIGP Code to provide green delineations.”
While the concept had been percolating in the procurement community for some time, the demand for a green Code picked up steam early last year as government executives began asking similar questions of their procurement staffs.
I received several calls over the course of a single week regarding vendor and spend analysis based on green purchasing: Woody Raine from Texas DOT needed a means to track green spending per legislative mandate; Paul Rock from North Carolina was attempting to put together specifications for green janitorial supplies. This pointed to a ground shift in thinking and requirements for the NIGP Code to be able to respond to the needs of the users.
As the NIGP Code is used to classify vendors and spend data, it was a natural fit to use the Code as a framework for tracking green spending. But how? With the help of NIGP Code users, I began to research the issue; during our research, a common set of requirements emerged:
Flexibility — The need for the new commodity codes to be used in various scenarios.
Specificity — The need to identify the products and services at the appropriate level.
Interoperability — The need for the solution to be used in various information systems with minimal disruption to existing implementations.
Scalability — The need for the solution to support future growth.
Given the complexity of those needs, a workgroup of NIGP Code users was formed to formulate a solution. The NIGP Code Green Workgroup, impaneled in the spring of 2008, included:
- Jeff Baer, city of Portland, Ore.
- Scot Case, TerraChoice
- Aida Davis, Accenture
- Keith Glatz, city of Tamarac, Fla.
- Deborah Hail, NIGP Code Services
- Robert Matney, state of North Carolina
- Sandra Radosavljevic, Texas DOT
- Woody Raine, Texas DOT
- Mark Rentschler, Greenseal
- Paul Rock, state of North Carolina
- Belinda Ruetter, NIGP Member Services
- John Walters, NIGP Code Services
After a kickoff and preliminary meetings, the group decided to request input from the NIGP Code users. Working with Tina Borger and Belinda Ruetter at NIGP, the group crafted a survey and distributed it to the membership in October.
In all, 268 respondents offered their experiences and opinions in the survey. Among the highlights of the survey:
- Twenty-one percent of respondents noted they currently track green expenditures.
- Thirty-six percent reported they currently have a mandate to track green expenditures.
- If green codes were available, 67 percent of respondents said they would track vendors; 68 percent indicated they would track spend data using green NIGP Codes.
- Seventy-eight percent of respondents agreed with the approach identified by the workgroup, 10 percent disagreed and 11 percent did not know.
Class structure chosen
The workgroup identified a number of potential approaches, including:
Creation of “green” codes at the seven-digit NIGP Code level. This would allow for the use of the existing class/item structures and capture the environmentally certified component more as an attribute. Unfortunately, the vast majority of users employ the five-digit NIGP Code, which would prohibit many from implementing it.
Creation of an XML-based “green” attributes tag. This would allow for the use of the existing NIGP Code as is. However, few systems support this, and looking at the commodity code and base description, there would be no differentiation between regular and green-certified products.
Creation of a Code suffix (e.g., 485-06-G) to denote green-certified products. However, for systems that use a numeric commodity-code numbering schema, the introduction of an alpha character would not be supported without modifications to the systems.
Creation of classes, class-items to make green-certified classes and class-items to reflect certified products and services.
The working group concluded that the last approach would satisfy all four user requirements (flexibility, specificity, interoperability and scalability) for a green code. It utilizes the existing structures and will not require changes to systems in order to support it. Reporting will be facilitated by providing a clear delineation of green versus non-green products and services.
For example, for the Class 485 (janitorial supplies), a new Class 486 was created: “Janitorial supplies, environmentally certified by an agency-recognized certification entity.” Five-digit codes beneath that class would reflect the same structure as the original, non-certified products and services.
It will be up to the using agency to define what standards are acceptable and what certification entities are recognized by the agency — as certification standards, entities and processes are a moving target from entity to entity. To reduce the need to modify the descriptions in the event that new entities are identified, particular certifying-entity brand names will not be used.
At press time, three new classes have been created. The new classes are included in the search engine at http://www.nigp.com and in the printed index books. Based on feedback from the user community, we will tweak the approach and add more classes as appropriate.
The NIGP Code is the first classification taxonomy to track green spending. We have planted the seed; now we need to nurture and grow this new capability to the benefit of public procurement.
John Walters is the president of NIGP Code Services at Periscope Holdings, the custodian of the NIGP Code on behalf of NIGP. Walters has been involved in public procurement since 1997 and has served as a consultant, trainer and speaker. Contact him at [email protected].