Dun & Bradstreet, Inc., enjoys a protected and profitable monopoly on government contracting data. Taxpayers aren’t allowed to download information about how their money is being spent unless they pay Dun & Bradstreet.
But, as a new round of commentary submitted to the General Services Administration shows, the tech industry wants to end it.
The GSA pays Dun & Bradstreet to assign a unique identification code to every company that has, or seeks, a contract with the federal government. Every contractor or new contractor must register with Dun & Bradstreet and be assigned a Data Universal Numbering System, or DUNS Number. (The system is used to identify federal grantees, too.)
Under the GSA’s current agreement with Dun & Bradstreet, the DUNS Number remains Dun & Bradstreet’s property – and Dun & Bradstreet charges taxpayers for access.
Here is why this monopoly is a bad deal for the government, taxpayers, and contractors too – and how it might finally end.
“You must click here for very important D&B information”
Dun & Bradstreet charges taxpayers for access to its property. If you visit the federal government’s spending transparency website, USASpending.gov – the main public source for information about government contracts and contractors – you’ll notice a prominent disclaimer at the very top.
“You must click here for very important D&B information.”
Click on that disclaimer and you’ll find a strong warning from Dun & Bradstreet. The warning is written in turgid, though threatening, legalese. Translated into plain English, it means this:
- Taxpayers are not allowed to download DUNS Numbers (“[s]ystematic access or extraction of content”).
- Taxpayers are not allowed to use DUNS Numbers for commercial purposes, like building a database of federal contractors as part of a tech business.
- Beyond the DUNS Number, USASpending.gov also publishes other information about government contractors, like company names and addresses. Taxpayers are allowed to download that information, but not in large enough chunks (“in bulk”) to create their own databases.
With these restrictions in place, how can taxpayers get meaningful electronic access to complete information about how their money is being spent? Only by purchasing that information directly from Dun & Bradstreet.
No other country in the world gives one company such monopoly control over its public, taxpayer-funded procurement data. No other country lets one company profit from public procurement data in this way.
GSA asks for alternatives
The Government Accountability Office examined the use of DUNS Numbers in 2012 and reported: “GSA believes Dun & Bradstreet effectively has a monopoly for government unique identifiers that has contributed to higher costs.”
Dun & Bradstreet’s monopoly doesn’t just prevent taxpayers from freely accessing data on how their money is spent. It also inflates what the GSA and agencies spend managing their contracts – because “Dun & Bradstreet has placed restrictions on how GSA [and the rest of the government] can use DUNS numbers.”
When the Government Accountability Office completed its study, the GSA had just concluded it was stuck with the DUNS Number. First, switching to a different identification code would mean “additional costs and data system disruptions.” Second, there was no nonproprietary identification code for companies – no alternative to Dun & Bradstreet’s monopoly.
Thanks to progress in technology and progress in government, neither of those two impediments remains.
First, a study by GSA’s own 18F tech team shows a way to replace the DUNS Number gradually, without requiring major system disruptions.
Second, the global Legal Entity Identifier (LEI), established by the financial regulators of the G20 in the wake of the 2008 financial crisis, has emerged as a viable alternative. Dozens of agencies around the world, including, in the United States, the Commodity Futures Trading Commission and the Consumer Financial Protection Bureau, now use the LEI to identify regulated companies.
The LEI is federated, which means that any company or government agency can set up a registration system, so long as they follow certain requirements. In the United States, Bloomberg and DTCC have both done so. Once a company registers for an LEI with any of those registration systems, it can use the LEI to fulfill any regulator’s compliance requirement.
Crucially, the LEI is nonproprietary: the list of companies registered for an LEI is public, open, and available for anyone to download.
Last February, the GSA asked the tech industry to advise it on the future of identifying contractors. And the tech industry responded with an earful.
Tech industry: time to replace DUNS with LEI
The GSA asked tech companies to help it understand all the possible alternatives to the DUNS Number. Aside from Dun & Bradstreet’s service, what other possibilities to identify federal contractors, confirm that they are unique, and track their identity might exist?
The GSA specifically asked for details on “licensing restrictions” on the resulting data. The GSA wanted to know if other registration systems might allow taxpayers to freely access information about contractors, rather than being forced to buy it from Dun & Bradstreet as they are today.
GSA provided The Capitol Forum with 18 of the responses, with the others still to come. Eleven out of the 18, or over 60%, “voiced support for a system based upon the open-source LEI as a replacement for the DUNS Number.”
The tech industry is beginning to recognize that public information shouldn’t be tracked using a proprietary system. For example, the main trade association of tech companies serving the federal government, ACT-IAC, told the GSA:
[P]roprietary entity identifiers commonly restrict the use of entity identifiers outside of their licensed user base (e.g., [Dun & Bradstreet] does not permit the commercial reuse and redistribution of D&B data, which includes [the DUNS] Number) or have overall restrictions of data without the license option. This inhibits certain reuse by other parties, supply chain partners, agencies, and other data consumers who are not subject to the proprietary license agreement and minimizes the ability to have transparent data that is openly accessible. A truly open unique entity identifier and system that supports transparent [federal spending data, including contracting data] means that the identifier and all associated data is free from restrictions, is license free, and is open for use by all users, indefinitely. An internationally standardized unique entity identifier that is non-proprietary and provides such an open standard is freely available and is thereby reusable by all parties. In addition, an open standard, non-proprietary identifier promotes open collaboration on relevant system and process enhancements and requirements. (Page 13.)
Dun & Bradstreet’s own response to the GSA was almost entirely redacted, making it difficult to discern any arguments in favor of a continued monopoly.
The Capitol Forum limits its reports to subscribers only, but the raw responses should be publicly available soon. And the GSA has promised that these responses will “help to refine” its decision about how to plan the future of contractor identification.
Dun & Bradstreet’s current agreement with the GSA to register and identify contractors expires next year.
If the tech industry’s responses to its request are any indication, the GSA will be charting a course toward open data, and away from the Dun & Bradstreet monopoly.
At Data Transparency 2017, a glimpse of the future of contracting data
Our sister organization, the Data Foundation, will host Data Transparency 2017, Washington’s biggest annual open data conference, on Sept. 26th. Our speaker lineup will feature some of the leading federal officials working to adopt the LEI across government reporting. A panel discussion sponsored by LexisNexis will bring together chief data officers who want to see the LEI adopted universally, for all of the reporting regimes where companies submit information to government, from regulation to registration … to federal procurement.
Join us at Data Transparency 2017 and learn more about the open future of federal contracting data!