NIGP Code
Encyclopedia
The NIGP Commodity/Services Code is an acronym for the National Institute of Governmental Purchasings Commodity Services Code. The NIGP Code is a coding taxonomy
used primarily to classify products and services procured by state and local governments in the United States
.
The classification system was developed in the mid 1980s as a result of efforts by public procurement officials in Texas, Oklahoma, Florida, Illinois and other states, cities and counties to provide a mechanism to classify the products and services that used in public procurement. Led by Homer Forrestor, the Director of General Services in Texas, the group produced the initial codeset in 1983.
The copyright for the data file was transferred to the National Institute of Governmental Purchasing
(NIGP)and the NIGP Code was born. The NIGP Code is now the standard taxonomy for classifying vendors and spend data for 33 states and thousands of local entities within North America.
NIGP appointed Periscope Holdings, Inc., as the custodian of the NIGP Code in 2001. The firm is responsible for licensing, overseeing code change requests, publication of version releases, communication with end users, phone support, training, integrity of the codeset, and commodity coding services for the conversion of contract and inventory files.
The NIGP Code is most commonly used to classify vendors and to track spend data for use in strategic sourcing
and spending analysis. The database is often incorporated into the procurement software
utilized by the entity for use in e-procurement
. The NIGP Code currently exists in English and Spanish versions. Cross references have been created for the NAICS
, UNSPSC
and MCC
codesets. Version 21 is the current release.
3-Digit Class Code
The 3-Digit class Code has a brief general description. This level contains 212 Commodity (Product) Classes and 55 Service Classes totaling 267 Classes. The 3-Digit Code is primarily used to generate periodic expenditure history by department for fiscal planning, budget execution, and accounting.
5-Digit Class-Item Code
The 5-Digit class-item Code is an expanded version of the 3-Digit class Code. Currently, it contains over 8,200 descriptions. This level categorizes vendors by class-item to allow your procurement software to automate bidder selection, produce no-bid response reports, vendor performance reports, and minority business and HUB reports by Code. Purchase history can be captured at this level as well.
7-Digit Class-Item-Group Code
The 7-Digit Code provides an additional level of purchase description. It contains over 36,000 descriptions. It can be used to develop a specification file and is used with the 11-Digit Code to create a comprehensive purchase description.
11-Digit Class-Item-Group-Detail Code
The 11-Digit Code is generally used to create, manage, and maintain line-item term contracts. It is also used to identify stock items in inventory. This level of the Code currently contains over 485,000 descriptions which provides a great amount of flexibility when creating contracts and tracking inventory.
NB: the link is dead.
Updates to the Code are published weekly to the nigp.com site for download by users. Codes requested directly from users are typically delivered via extract files to the user, with general release of the new codes in the weekly website update.
The result of this effort was the creation of environmentally certified classes of NIGP Codes. These classes indicate the products/services are "environmentally certified products by an agency accepted certification entity." This provides the end user with the flexibility to define the acceptable certification entity as per their procurement terms and conditions and provides a mechanism for reporting based on the environmentally certified commodities and services. See the GoPro magazine article Planting the Seeds for a Green Code for additional information.
Taxonomy
Taxonomy is the science of identifying and naming species, and arranging them into a classification. The field of taxonomy, sometimes referred to as "biological taxonomy", revolves around the description and use of taxonomic units, known as taxa...
used primarily to classify products and services procured by state and local governments in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
The classification system was developed in the mid 1980s as a result of efforts by public procurement officials in Texas, Oklahoma, Florida, Illinois and other states, cities and counties to provide a mechanism to classify the products and services that used in public procurement. Led by Homer Forrestor, the Director of General Services in Texas, the group produced the initial codeset in 1983.
The copyright for the data file was transferred to the National Institute of Governmental Purchasing
National Institute of Governmental Purchasing
The is a national, membership-based non-profit organization providing support to professionals in the public sector purchasing profession. NIGP provides its members with many services, including education, professional networking, research, and technical assistance.Organized in 1944, NIGP is an...
(NIGP)and the NIGP Code was born. The NIGP Code is now the standard taxonomy for classifying vendors and spend data for 33 states and thousands of local entities within North America.
NIGP appointed Periscope Holdings, Inc., as the custodian of the NIGP Code in 2001. The firm is responsible for licensing, overseeing code change requests, publication of version releases, communication with end users, phone support, training, integrity of the codeset, and commodity coding services for the conversion of contract and inventory files.
The NIGP Code is most commonly used to classify vendors and to track spend data for use in strategic sourcing
Strategic sourcing
Strategic sourcing is an institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company. In a production environment, it is often considered one component of supply chain management...
and spending analysis. The database is often incorporated into the procurement software
Procurement software
Procurement software is business software that helps to automate the purchasing function of organizations. Activities including raising and approving purchase orders, selecting and ordering the product or service, receiving and matching the invoice and order, and paying the bill is handled...
utilized by the entity for use in e-procurement
E-procurement
E-procurement is the business-to-business or business-to-consumer or Business-to-government purchase and sale of supplies, Work and services through the Internet as well as other informations and networking systems, such as Electronic Data Interchange and Enterprise Resource Planning.E-procurement...
. The NIGP Code currently exists in English and Spanish versions. Cross references have been created for the NAICS
NAICS
The North American Industry Classification System or NAICS is used by business and government to classify business establishments according to type of economic activity in Canada, Mexico and the United States...
, UNSPSC
UNSPSC
The United Nations Standard Products and Services Code is a taxonomy of products and services for use in eCommerce. It is a five-level hierarchy coded as an 8-digit number.-Governance:...
and MCC
Merchant Category Code
A Merchant category code is a four-digit number assigned to a business by MasterCard or VISA when the business first starts accepting one of these cards as a form of payment. The MCC is used to classify the business by the type of goods or services it provides. In the US it can be used to...
codesets. Version 21 is the current release.
NIGP Code structure
The NIGP Code is structured as follows:3-Digit Class Code
The 3-Digit class Code has a brief general description. This level contains 212 Commodity (Product) Classes and 55 Service Classes totaling 267 Classes. The 3-Digit Code is primarily used to generate periodic expenditure history by department for fiscal planning, budget execution, and accounting.
5-Digit Class-Item Code
The 5-Digit class-item Code is an expanded version of the 3-Digit class Code. Currently, it contains over 8,200 descriptions. This level categorizes vendors by class-item to allow your procurement software to automate bidder selection, produce no-bid response reports, vendor performance reports, and minority business and HUB reports by Code. Purchase history can be captured at this level as well.
7-Digit Class-Item-Group Code
The 7-Digit Code provides an additional level of purchase description. It contains over 36,000 descriptions. It can be used to develop a specification file and is used with the 11-Digit Code to create a comprehensive purchase description.
11-Digit Class-Item-Group-Detail Code
The 11-Digit Code is generally used to create, manage, and maintain line-item term contracts. It is also used to identify stock items in inventory. This level of the Code currently contains over 485,000 descriptions which provides a great amount of flexibility when creating contracts and tracking inventory.
| Code Structure | Sample Code | Sample Description |
|---|---|---|
| 3-Digit (Class) Code | 620 | Office Supplies: Erasers, Inks, Leads, Pens, Pencils, etc. |
| 5-Digit (Class-Item) Code | 620-80 | Pens (General Writing Types): Ball Point, Nylon Tip, etc. |
| 7-Digit (Class-Item-Group) Code | 620-80-21 | Pens, Ball Point, Retractable, Refillable, All Plastic Barrel W/Metal Pocket Clip |
| 11-Digit (Class-Item-Group-Detail) Code | 620-80-21-035-4 | Fine Point, Black Ink, 12/Box |
| 620-80-21-045-3 | Fine Point, Blue Ink, 12/Box | |
| 620-80-21-065-1 | Fine Point, Green Ink, 12/Box | |
| 620-80-21-075-0 | Fine Point, Red Ink, 12/Box |
NIGP Code access
The NIGP Code can be accessed in several ways. The most common is via the NIGP Code web search tool, the NIGP Living Code, which hosts a search engine for the Code for end users. The site also has a download section, which provides for end user download of the entire codeset or modifications to the codeset since the last download by the user. The download file can be formatted as an Excel, tab-delimited or csv file. In addition, the Code is available via printed format in the Alphabetical Index Book and the Class Item Index.NB: the link is dead.
NIGP Code maintenance
Maintenance and additions/clarifications to the Code come from three primary sources: codes generated by direct customer requests, codes identified as part of coding services, and codes identified from seated working groups. Additions/clarifications at the 3 and 5 digit level are typically processed within 24 hours. Code requests targeted at the 7 and 11 digit levels typically are processed within 2–3 days, although codes can be generated within 24 hours under certain circumstances.Updates to the Code are published weekly to the nigp.com site for download by users. Codes requested directly from users are typically delivered via extract files to the user, with general release of the new codes in the weekly website update.
Environmentally certified codes
The current working group for the NIGP Code is for "green" commodity/services codes. The need for these type codes was identified in the 2nd quarter of 2008 and the working group was seated in June. The approach for environmentally certified products and services was researched and a final survey of users was executed in October 2008. Rollout began in January 2009.The result of this effort was the creation of environmentally certified classes of NIGP Codes. These classes indicate the products/services are "environmentally certified products by an agency accepted certification entity." This provides the end user with the flexibility to define the acceptable certification entity as per their procurement terms and conditions and provides a mechanism for reporting based on the environmentally certified commodities and services. See the GoPro magazine article Planting the Seeds for a Green Code for additional information.
Articles
- State of Washington Adopts the NIGP Code to Manage Spend by John Walters
- The Basics of the NIGP Code by John Walters
- More users, more codes in 2010 by John Walters
- Master data management using the NIGP Code by John Walters
- It's all in the numbers in South Carolina by Norma Hall
- Spend analysis can outfox a tricky economy by John Mahin
- Using the NIGP Code to facilitate risk-based procurement by John Walters
- Open Book Texas: A window on state spending by John Walters
- Planting the Seeds for a Green Code by John Walters
- NIGP Code: a highly useful procurement tool by Michael Keating
- Crank up the Volume with NIGP Codes by John Mahin
- Texas City Improves Inventory Management
- Citys P-Card Program Fights Fraud
See also
- Government procurementGovernment procurementGovernment procurement, also called public tendering or public procurement, is the procurement of goods and services on behalf of a public authority, such as a government agency...
- Buyer leverage
- Contract ManagementContract managementContract management or contract administration is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and...
- E-procurementE-procurementE-procurement is the business-to-business or business-to-consumer or Business-to-government purchase and sale of supplies, Work and services through the Internet as well as other informations and networking systems, such as Electronic Data Interchange and Enterprise Resource Planning.E-procurement...
- Global sourcingGlobal sourcingGlobal sourcing is a term used to describe practice of sourcing from the global market for goods and services across geopolitical boundaries. Global sourcing often aims to exploit global efficiencies in the delivery of a product or service...
- PurchasingPurchasingPurchasing refers to a business or organization attempting for acquiring goods or services to accomplish the goals of the enterprise. Though there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between organizations...
- Procurement softwareProcurement softwareProcurement software is business software that helps to automate the purchasing function of organizations. Activities including raising and approving purchase orders, selecting and ordering the product or service, receiving and matching the invoice and order, and paying the bill is handled...
- Spend managementSpend managementSpend management is the way in which companies control and optimize the money they spend. It involves cutting operating and other costs associated with doing business...
- NIGP
- Rate contractRate contractA Rate Contract or a Rate Agreement is a procurement cost reduction strategy aimed at standardizing procurement prices for commonly procured, homogenous and price varying inputs.-Timing:...
- Reverse auctionReverse auctionA reverse auction is a type of auction in which the roles of buyers and sellers are reversed. In an ordinary auction , buyers compete to obtain a good or service, and the price typically increases over time...
- Spending analysis
- Strategic sourcingStrategic sourcingStrategic sourcing is an institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company. In a production environment, it is often considered one component of supply chain management...
- TurnkeyTurnkeyA turn-key or a turn-key project is a type of project that is constructed by a developer and sold or turned over to a buyer in a ready-to-use condition.-Common usage:...
- Tendering
- AuctionAuctionAn auction is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder...
- Catalog management