NIGP coding standards are related to the products and services that various federal, state and local governments purchase. These codes are designed for governmental entities who spend public money. Codes for NIGP might not seem like they matter but they are very important. These codes help to make sense of the vast number of items that governments buy and sell. Let’s check out the NIGP coding system and the role they play public government.
NIGP Coding is Established by Many Local Governments
According to Wikipedia, the codes for NIGP were originally created by public procurement officials during the 1980s. Public procurement officials from the states of Oklahoma, Florida, Illinois and Texas helped to create this taxonomy system. Other states had procurement officers to join this process as well. The original code set was established and used by 1983. The creators of NIGP called this system the National Institute of Governmental Purchasing’s Commodity/Services Code which of course has been shortened to NIGP.
How does the NIGP system work?
The NIGP Codes system works by classifying suppliers who provide products and services to government entities. For example, when local governments have to purchase cement or roads or other public projects; they can use the NIGP system to find the best suppliers for this material. Since NIGP has an extensive data base, governments can figure out which supplier has the best price for their materials.
The coding system is also used to track data within strategic sourcing. In other words, governments have a vast data network that will allow them to figure out where they can find the best prices for public money purchases. NIGP coding systems help governments to improve their purchasing power through this process.
The codes are also necessary for classifying the best and most useful products and services that governments need or their cities, lands, structures and people. NIPG is also used to provide in-depth classifications or products and services. It also used for consistent recruitment (or gathering of suppliers), purchase history and standardization descriptions.
Governments use NIGP Coding or Proper Public Spending
State and local governments are accountable for public tax money. They must spend it in the best way possible. Codes from NIGP help governments to do this in an accurate and professional way. Public spending is no easy situation to handle because tax payers want to know that their money is being spent for necessary purchases. They also want to know that government procurements are being allocated toward quality products, materials and services. San Bernardino County provides further information about the NIPG coding system.
NIGP Coding Structures and What they Mean
The NIGP coding system is broke down according to digit formations. The digit formations are set up in a 3, 5, 7 and 11 numeral configurations. The various coding formation is primarily used to generate periodic expenditure history for financial departments. Processes related to fiscal planning, budget execution and accounting. Commodity and services are also listed with each digit formation from the smallest to the largest. There are descriptions that accompany each coding standard within NIGP. Governmental organizations can access the NIGP coding system through its NIGP Living Code site.