Update (October 6, 2016): On September 30, 2016, the three agencies that manage the Federal Acquisition Regulation finalized a rule change removing references to the DUNS Number. This removes a legal barrier to the federal government’s future move away from a proprietary identification number for recipients of federal awards, and toward a fully-open one.
To track its spending on contractors and grantees, the U.S. federal government uses a code that is proprietary – which means this public information can’t be shared without paying a private contractor.
But yesterday, the government took a first step away from that inefficient and anti-competitive arrangement. Here’s what happened, and why it matters.
Locked into DUNS Number
For many years, the federal agencies have required contractors and grantees to register for a Data Universal Numbering System (DUNS) Number, which is provided and maintained by Dun & Bradstreet, Inc. The DUNS Number is the default data standard for identifying and matching the companies, state, local, and tribal governments, and nonprofits that receive federal taxpayer money.
The DUNS Number isn’t just a condition of contract and grant agreements; for contractors, it has been a legal requirement, imposed by the Federal Acquisition Regulation (FAR), which governs all federal contracting.
Every user of information that is encoded using the DUNS Number must purchase a license from Dun & Bradstreet. The use of this proprietary data standard prevents the information from being freely shared and used.
Not Open, Not Efficient
As long as the proprietary DUNS Number remains in place as the default standard identifier for contractors and grantees, federal spending information cannot be open data.
The continued use of a proprietary data standard for public information makes little sense – from either an economic viewpoint or a government-efficiency viewpoint. First, the information is paid for over and over, every time it is used, rather than being paid for a single time when it is generated, which means its price doesn’t bear any relationship to the cost of generating it. Second, because the need for a license imposes a built-in barrier to sharing and collaboration, entities outside the government are less likely to have an opportunity to creatively scrutinize the information, and less likely to derive insights that government can then employ to become more efficient.
That’s why the Data Transparency Coalition has consistently opposed the use of proprietary data standards to track federal spending. When the DATA Act of 2014 passed, directing the Treasury Department and the White House Office of Management and Budget (OMB) to set up standards for spending, we called on these decision-makers to dump DUNS.
Stirrings of Change
Earlier this year, the Treasury and OMB chose to temporarily keep the DUNS Number as the official identifier for recipients of federal contracts and assistance. However, they also promised the government would provide a pathway to eventually move away from the use of a proprietary data standard.
That promise was validated yesterday. The three agencies that manage contracting rules announced a crucial possible change.
NASA, the General Services Administration, and the Department of Defense have proposed to remove all references to the DUNS Number from the voluminous Federal Acquisition Regulation.
If the change is finalized as proposed, the government will have taken its first step away from proprietary data standards and its first step towards opening this important data. By scrubbing the contracting rules of any reference to the DUNS Number, the government removes the presumption that the DUNS Number is the only option for agencies and systems that track spending.
Long Road Ahead
Even after the change, the DUNS Number will remain in use – but this action will make it legally possible to eventually dump DUNS.
The announcement also promises that the government will “establish a transparent process for exploring potential alternatives” to the DUNS Number. We are anxious to see the details of that process.
Our Coalition is eager to express the open data industry’s support for moving to a nonproprietary identification code, such as the Legal Entity Identifier, to track federal recipients.