2019-10-24

Third in a Series

Checks and Balances Project has been investigating questions about a multi-million dollar New York City contract the de Blasio administration awarded to the French technology company Ivalua in 2016. The contract was to custom-build an online procurement system to be used by up to 40 New York City departments to purchase goods and services more cost effectively. Years later, the software still doesn’t work as promised.

In this series, we’ve been examining the role of Spend Matters, an influential procurement industry website that offers editorial content, research and analysis. Spend Matters also offers consulting services — although it appears to be reluctant to talk about the services it provides.

Spend Matters aggressively defended Ivalua after C&BP’s analysis of how NYC is paying 340 times more per agency for custom-built eProcurement software than the City of Dallas paid for its software. Why?

Spend Matters

Spend Matters Consulting Services 

Spend Matters states on its website that it works with companies in a variety of ways, including with tactics/approaches, solution positioning and pricing trends:

“Our advisory offering helps solution and service providers better tailor their market offerings, improve their competitive positioning and better plan their product and solution strategies by providing objective insight, deep subject matter expertise and analysis.”

Client Disclosures Hard to Find

On its “Client Disclosures” web page, there’s this disclaimer:

“Spend Matters does not endorse any vendor, product or service depicted in SolutionMap and does not advise users to select only those with the highest ratings or other designation.”

But the Client Disclosures disclaimer is hard to find on the Spend Matters site. It’s not obviously linked anywhere on the home page, under various categories or on its advertising policy page. Nor does it appear in search results on the Spend Matters site. We found it using Google.

When one finally discovers the Client Disclosures page, Ivalua is in a list of companies that are Spend Matters clients and/or sponsors.

In Part Two of this series, Spend Matters Founder and Managing Director Jason Busch responded to a question about the difficulty of finding Client Disclosures:

“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.”

But that doesn’t answer the question of why the Client Disclosures page is buried.

Busch Avoids Question About Consulting

We also asked Mr. Busch if he would describe his company as a trade publication, industry analyst or consulting firm? He said:

“I’ll leave this one to Carina [Kuhl, VP Marketing] to respond with an accurate description. We’re somewhat in between digital media/ trade publications and a research firm.”

We have yet to hear from Ms. Kuhl. But as the founder and managing director of a multimillion-dollar company, shouldn’t Busch be able to describe his company?

In light of these new findings, we thought we’d ask Busch some follow-up questions:

  1. During what time period was Spend Matters (or its owners or employees) providing paid consulting services for Ivalua? KPMG? KPMG-Ivalua?
  2. Do the owners or employees of Spend Matters provide consulting services through other entities?
  3. What percentage of Spend Matters’ revenue is derived from consulting services?
  4. Given your acknowledgement that Client Disclosures is difficult to find on the Spend Matters website, why did you and Spend Matters decide not to improve the location and accessibility of the Client Disclosures information?
  5. “Watchdog Gone Wild” states “implementation is where the real risk lies” for Ivalua and that the company “has their work cut out for them.” Our investigation shows that after 3+ years and costs approaching $50 million, the software doesn’t work as promised. Do you approve of NYC waiving its right to cancel the contract and collect Ivalua’s $25 million performance guarantee bond? Is this typical in a procurement context?

We’ll update readers when we hear from Mr. Busch.

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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:

Q&A with Spend Matters Founder Jason Busch

Ivalua’s Ties to Procurement Industry Website Spend Matters Raise Questions

C&BP Analysis: NYC Pays 340x More Per Agency for an e-Procurement System than Dallas