He Denies Conflicts While Procurement Trade Pub Cheered Company Embroiled in Growing NYC Contract Scandal
Second in a Series
New York City wanted to standardize and lower costs to enable up to 40 city agencies to purchase goods and services online. It hired Ivalua, a French technology company that had never worked for any government in the U.S., to custom-build a system that years later still doesn’t work. Costs to city taxpayers are now approaching $50 million.
Three weeks after we published our analysis of how NYC was spending 340 times more per agency than the $50,000 spent by the City of Dallas, the influential procurement industry website Spend Matters rushed to Ivalua’s defense. In a 2,011-word article titled, “Watchdog Gone Wild? Why New York City’s Procurement Technology Overhaul Is a Good Thing,” Spend Matters declared:
“New York taxpayers should be proud…Ivalua is actually just releasing its public sector application (for state/local government) out to the market, and the ‘battle hardening’ done in NYC will certainly prove valuable because as Frank Sinatra sang: ‘If I can make it there, I’ll make it anywhere!”
As noted in our last post about Spend Matters, we think it’s curious that a trade publication (and research firm) would act as a cheerleader in the industry it covers.
To his credit, Spend Matters Founder and Managing Director Jason Busch was quick and lengthy in his responses to our questions. We think it’s important to present our questions and his answers below in full – except for two sentences that Mr. Busch said were provided confidentially and off-the-record. Though we didn’t agree to those terms, we choose to respect the request by removing them from his answers.
C&BP: Was Spend Matters being funded by Ivalua when it published “Watchdog Gone Wild”?
BUSCH: Ivalua and hundreds of other firms are subscribers to our research on the provider side (many more are clients who are procurement organizations, consultants, investors, etc.) Ivalua has been a long-time client, but not in any capacity related to public sector, New York, or anything related. Nor are they particularly a large or small client (all of their competitors are clients as well). Like others, they buy our research. Some buy advertising and marketing services too (which are all labeled as such).
C&BP: Did Ivalua prompt you in any way to refute the NYC vs. Dallas analysis?
BUSCH: NO … NOT AT ALL. Pierre [Mitchell] is the one who spoke to a variety of parties before authoring the piece. Either of us is happy to speak to you.
C&BP: Why were you, as Spend Matters Founder and Chief of Strategy, quoted in Ivalua’s December 6, 2016 press release announcing its alliance with KPMG?
BUSCH: We are often quoted in press releases. I’d say we’re quoted at least monthly these days, sometimes weekly.
C&BP: Does being included in the press release call into question Spend Matters’ objectivity?
BUSCH: I do not believe so. But again, happy to discuss. Objectivity makes us who we are, as does candid opinion which we do not shy away from. We’ve lost millions of dollars in business over the years from clients who’ve ended relationships with us for covering and saying certain things.
C&BP: Did Spend Matters share in the $30.5 million NYC contract award money?
BUSCH: NO. We have no involvement whatsoever with NYC.
C&BP: What is your current financial arrangement with Ivalua?
BUSCH: As above, like hundreds of other organizations, they purchase our research. I am happy to discuss this with you further. I would also encourage you to investigate SolutionMap, which are the rankings of vendors which we publish quarterly based on an insanely detailed methodology. Ivalua has an excellent product per SolutionMap analyst scoring, but its customer satisfaction has dropped materially in recent quarters in the SolutionMap analysis. We’re happy to share a deeper look at our published research on SolutionMap (the subscriber level) of this confidentially.
C&BP: Why doesn’t “Client Disclosures” appear on the Spend Matters’ website homepage? It isn’t in your site navigation or as a disclosure on advertising policies. It also doesn’t appear when entering the term in the Spend Matters search box nor do you link to it in author Pierre Mitchell’s article about the Ivalua-NYC contract. Why is that?
BUSCH: I’ll leave this one to Carina [Kuhl, VP Marketing]. I believe it’s something we’ve discussed before. We have hundreds of active clients on Spend Matters who buy our research who also sell into the market. All sponsored content is labeled as such, as is content that we create on behalf of vendors in PDF format which are called “Make the Case”.
C&BP: How do you describe Spend Matters? A trade publication? An industry analyst? Or a consulting firm?
BUSCH: I’ll leave this one to Carina to respond with an accurate description. We’re somewhat in between digital media / trade publications and a research firm.
Jason Busch’s responses beg more questions as we continue to get to the bottom of the NYC-Ivalua flimflam.
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Scott Peterson is executive director of Checks and Balances Project, an investigative watchdog holding government officials, lobbyists and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.
You May Also Want to Read:
Ivalua’s Ties to Procurement Industry Website Spend Matters Raise Questions
NYC’s Chief Procurement Officer Left Town as Ivalua eProcurement Project Melted Down
C&BP Analysis: NYC Pays 340x More Per Agency for an e-Procurement System than Dallas, Texas