To fix federal procurement, dump the DUNS number

Federal procurement is broken, at taxpayers’ expense.

Complex rules and lengthy processes discourage innovators, favor incumbents, and block competition. Companies that should be disbarred for poor performance still get federal contracts.

{mosads}Congress, the Government Accountability Office, countless think tanks, and the contractors themselves all agree: too often, our government hires well-connected companies instead of worthy ones, and pays too much.
Fortunately, we already know that open data could help fix federal procurement.
By standardizing all information on contract spending, and publishing that information as a single, searchable open data set, the federal government could empower data analytics to reveal fraudsters.
We’ve already done that once. From 2009 to 2014, the government published stimulus procurement spending as a standardized, searchable open data set; inspectors general used that data to launch investigations; and contract fraud was much lower within the stimulus than across all spending. The power of open data goes beyond simply stopping fraud.

Imagine if you could instantly cross-reference every company’s contracting record with its reports to the EPA, the SEC, and the courts. Surely that could help the government figure out which contractors don’t follow laws, which ones are on shaky financial ground, and which ones are being sued the most. Today such analysis requires expensive data matching. With a standardized identification code matching a companies across different government reports, it would be cheap – and ubiquitous.

But one outdated technology still stands in the way of transparency: the DUNS Number.

Twenty years ago, the federal government entered into an agreement with Dun & Bradstreet, Inc., to provide a numbering system to track contractors. In order to do business with the government, companies must pay Dun & Bradstreet to be issued a DUNS Number.

Dun & Bradstreet continues to own every DUNS Number. That means anyone who wants to download or analyze the government’s public procurement data must buy a D&B license.

At the very top of the nation’s flagship spending transparency website,, is a prominent disclaimer: “You must click here for very important D&B information.”

The “very important D&B information” is a legal notice to taxpayers: we are not allowed to “access, use or disseminate” procurement data in bulk – even though we paid for it – because D&B owns it.

In 2012, the Government Accountability Office found that D&B’s monopoly has contributed to higher costs and “does not enable the public to fully track entities doing business with the government.”
But the GAO concluded there was no alternative. Only D&B had a registration system to sign up new companies; replacing the DUNS Number would require expensive modifications to scores of IT systems; and D&B’s contract required the federal government to delete all historical data if it ever expired.
Those barriers are now gone.
First, the freely-reusable Legal Entity Identifier (LEI) has become a viable alternative. The LEI has already been adopted by government agencies in dozens of countries. Second, a study by the General Services Administration’s 18F technology team shows that the DUNS Number could be replaced with a temporary code with the same number of digits, linked to the LEI – which means no expensive system upgrades.
Finally, earlier this year the federal government paid D&B $26 million for a modification that allows it to retain historical procurement data if the contract ends. The modification also allows some data fields, like companies’ names and addresses, to be shared more freely.
But the modification does not change the all-important contractor identification number. The DUNS Number is still the only way the government tracks the companies it hires. Paying for a D&B license is still the only way anyone outside the government can get full access to analyze and scrutinize the data.
The government’s agreement with D&B expires in 2018. The next administration shouldn’t miss the opportunity to replace the DUNS Number with the LEI.
But agencies can, and should, start testing alternatives to the DUNS Number right away.
By dumping the DUNS Number, we will liberate procurement data. Once procurement data is unshackled from licensing, entrepreneurs will be able to develop and freely test analytics to stop fraud and achieve better pricing. Data companies will match companies’ procurement data with their regulatory filings, giving inspectors general and investors powerful, actionable insights.
Over a year ago, the Obama Administration promised to conduct a “transparent process” to evaluate alternatives to the DUNS Number, giving civil society and the tech industry a chance to voice their opinions about options like the LEI. So far, though, the White House has not begun this “transparent process.”
Congress should insist that the White House keep this promise – and, if not, should move legislation requiring the executive branch to make all procurement data open and free.
Only transparency can fix federal procurement, and only the DUNS Number stands in its way.
Hudson Hollister is executive director of the Data Coalition.

The views expressed by authors are their own and not the views of The Hill.


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