Pareto Award Criteria

Section I. Purpose and Overview

In September 2003, the National Institute of Governmental Purchasing Inc. initiated the Pareto Award of Excellence in Public Procurement. This international award represents the highest form of peer recognition that can be bestowed on an agency for outstanding achievements in public procurement.

This most prestigious honor may be attained only by those public procurement agencies that hold current certification as an Outstanding Agency Accreditation Achievement Award. The Pareto Award will be for five years, at which time a recertification process is required.

Section II. Program Summary

The Pareto Award is the pinnacle award for public procurement excellence. It is tantamount to the Malcolm Baldrige National Quality Award and the Deming Prize for Quality and carries international prestige and recognition.

The award is not easily attained due to the rigors inherent in the review process. The award is achieved following the successful completion of the following three phases:

The completion of Phase I and II will require a major investment of time and energy. It will prove to be a challenge for all organizations – but this only adds value and recognition to the award process. Organizations should allow four to six months to complete the application process.

The timing of the application is critical due to the fact that the entity cannot allow their OA4 certification to expire prior to application and approval of the Pareto Award. The NIGP Accreditation Review Process, including the site visit peer review is scheduled to take eight to twelve weeks to complete. Due to the extensive review process, NIGP will not be able to consider applications filed within six months of their expiration date of the OA4.

Section III. The Pareto Award - Background

In 1987, the US Congress created the national quality award, named in honor of the Secretary of Commerce, Malcolm Baldrige. The Deming Prize, named in honor of W. Edwards Deming was created by Japan and is awarded to those firms that have achieved distinctive performance improvement through the application of total quality management principles (TQM). Both of these awards reflect performance excellence and carry great global prestige.

It is the intent of the Pareto Award to honor and recognize those public procurement operations that really are “best in class”. The Pareto Award will not diminish the OA4 certification- only enhance its status because it provides the necessary platform needed to move to the next level of recognition.

NIGP’s executive leadership, the NIGP Research Committee and faculty from Florida Atlantic University were in agreement that the name of the award should befit the prestige that accompanies its receipt. Vilfredo Pareto’s (1848-1923) life’s work holds a direct relationship with public procurement professionals of today. Pareto was the Italian economist and political sociologist born in Paris who derived many economic theorems used today, including the 80/20 rule - the law of the trivial many and the critical few. The 80/20 rule can be applied to many of purchasing processes and activities. His socio-economic theories are internationally accepted and many refer to him as the “father of scientific procurement”. Since Pareto’s name carries international recognition, his name adds a global dimension in its significance.

It is with great pride and high honor that we name the highest form of peer recognition that a public procurement organization can achieve as the “Pareto Award of Excellence in Public Procurement”. Pareto award recipients will represent excellence, quality, high performance, outstanding achievement and the very best in class.

Section IV. How to Apply

Phase I: Self-Study

The self-study is a collaborative review of the procurement organization by those that manage and lead its operation. The organization is required to conduct a comprehensive study of its purpose, mission, operation and service delivery. It is an organizational profile. Unlike the Baldrige Award, which requires a 50-page submission, there is no mandated page requirement. The self-study should depict the current state of the purchasing organization and should contain charts, graphs, tables and any other supporting material deemed relevant.

A recommended format to follow is the SWOT Analysis (strengths, weaknesses, opportunities and threats). SWOT analysis is a very effective way of identifying strengths and weaknesses and of examining the opportunities and threats faced by an organization. It is a recommended template to follow and can be incorporated into the self-study analysis.

The self-study is a prologue to Phase II, which consists of written responses to sixty questions in six categories. The self-study answers the questions “What characteristics of excellence does our organization possess which makes us an acceptable candidate for the Pareto Award?” and “Why are we a model of excellence for others to follow?”

The self-study is graded on a pass-fail basis.

Phase II: Response to Questions

This phase consists of sixty questions divided into six categories. These questions are to be answered in essay form. Some can be easily answered in one or two paragraphs but the majority require a comprehensive response. It is unlikely that the purchasing organization will be able to respond to every question. Each question is worth 1.7 points and the highest possible score is 102. Each answer is assigned a point value from 0 to 1.7. A passing score is 80 or higher.

The six categories embody what is “best in class” in a public procurement organization. The questions pose subjective answers that allow the organization great latitude in reaching for the “best answer”.

Application Submission

The self-study and the question responses should reflect the high quality implicit in the award process. The first-rate standards of an organization will be reflected in the answers received. The information contained in Phase I, and the answers contained in Phase II must be complete, accurate, clear and error-free as well as grammatically correct.

Following completion of Phase I and Phase II, the application form along with all attachments, appendices, etc. are submitted to the NIGP Pareto Award Accreditation Committee.

The Committee will review and score the self-study and the sixty answers. Each member of the Committee shall independently score the responses received and the scores from all Committee members shall be averaged for an overall score. The Committee will provide a written report detailing the results of the scoring on Phase I and Phase II. Successful agencies shall be notified when their application has been approved so that they may prepare for the next Phase, the On-Site Peer Review.

On-Site Peer Review

In spite of the writing required for Phase I and Phase II, the Pareto Award is not an essay contest and even though effective responses to Phase I and Phase II are necessary, it does not ensure winning the award. The on-site visit is not an audit. The main purpose of the on-site review is to look for organizational attributes that may not have been identified in Phase I and Phase II and to validate information submitted. The Peer Reviewers will talk to organizational leadership and stakeholders, as well as internal and external customers. The Peer Reviewers will set the agenda and inform the agency representative assigned to the Pareto Award process, the procedures that will be followed and the individuals to be interviewed. The intent behind the on-site review is four fold - clarify, verify, interview and examine.

The on-site review is the opportunity to impress upon the Reviewers that the organization is even better in reality than it appears on paper.

The Review will typically take three days to complete, but shall depend on the size of the organization and the services provided by its procurement division.