Major change proposed to how agencies track vendors

The Federal Acquisition Regulations Council issued a proposed rule asking for input on how to move the government away from using the proprietary standard or nu...

The Federal Acquisition Regulations Council is taking the first step to get the government away from what many see as a costly way to track and manage vendors.

The FAR Council released a proposed rule Nov. 18 asking for input on how the government can stop using the proprietary standard or number for uniquely identifying entities receiving federal awards provided for decades by Dun & Bradstreet.

“The current requirement limits competition by using a proprietary number and organization to meet the identification needs,” the council wrote in the notice in the Federal Register. “Although the government does not intend to move away from use of the DUNS number in the short term, elimination of regulatory references to a proprietary entity identifier will provide opportunities for future competition that can reduce costs to taxpayers.”

The council is asking for agency and vendor input on establishing a transparent process to explore potential alternatives to DUNS numbers.

“The Office of Management and Budget (OMB) and Treasury, in collaboration with the General Services Administration and the Award Committee for E-Government will establish a process for considering options, including soliciting information about viable alternatives from and reaching out about nonproprietary alternatives to all sectors, including private companies, nonprofits and federal government providers,” the notice stated. “This process will result in an analysis of alternatives for the unique identification of entities working with the federal government while maintaining the statutory and regulatory integrity protections for the needs of the various awarding communities (loans, financial assistance, procurement, etc.) as well as transparency communities. The analysis of alternatives will include consideration of costs, implementation considerations, and protections for federal taxpayers. The analysis of alternatives is anticipated to be completed in Fiscal Year (FY) 2017.”

Comments on the proposed rule are due by Jan. 19.

“Dun & Bradstreet believes the proposed changes to the Federal Acquisition Regulation allows for a fair and open environment,” said a company spokeswoman in a statement to Federal News Radio. “The DUNS Number will continue to provide a foundation to enable transparency and oversight for governments, businesses and citizens. Our Dun & Bradstreet data quality process behind the DUNS Number will continue to transform volumes of data into mission critical insight for the federal government every day. Dun & Bradstreet will continue to partner with the federal government as the landscape and requirements of open data evolve.”

The proposed rule is being lauded by industry and Congress.

“This proposed rule will help level the playing field, which is why I called for this change over a year ago,” said Rep. Elijah Cummings (D-Md.), in an email to Federal News Radio. “The government’s own rules for contractors should not mandate the use of one company.”

Cummings and Rep. Darrell Issa (R-Calif.) wrote a letter to GSA and the Office of Federal Procurement Policy in September 2014 asking for information on FAR references to DUNS and for the council to remove those references as soon as possible.

“FAR references to DUNS are causing specific and identifiable harm to the federal government’s ability to negotiate with Dun & Bradstreet,” the lawmakers wrote.

The Government Accountability Office studied the issue in 2012 and found the government is spending about $19 million a year to use the proprietary tracking system.

GSA awarded the current contract to Dun & Bradstreet in 2010 for three years with an additional 5-year option so it will expire in 2018. Cummings and Issa say the total cost for the 8-year contract will be about $154 million.

“The DUNS contract is also hampered by unfavorable and restrictive terms,” the lawmakers wrote. “GSA licenses the use of DUNS numbers and associated business information. Under the licensing agreement, the numbers and associated data may only be used for acquisition purposes, must be deleted from all federal databases upon termination of the contract, and Dun & Bradstreet may unilaterally terminate the contract after 30-day notice.”

The FAR Council said as of June 2015, there were 380,092 unique and active DUNS numbers designated in the System for Award Management and attributed to government contracting.

Concerns over the expense of using DUNS numbers trickled down to the Recovery Accountability and Transparency Board (RATB) in 2014. The RAT Board relied on DUNS to track Hurricane Sandy funding, but couldn’t afford to renew its contract with Dun & Bradstreet last year.

This is the second time the FAR Council considered this change. Back in 2010, GSA issued a source sought notice, but ran into trouble because the FAR required the use of DUNS.

GSA also took steps to reduce its reliance on DUNS numbers last year. GSA said the public ATOM feeds from the Federal Procurement Data System-Next Generation was updated by masking select data elements, specifically company’s DUNS number. GSA said the ATOM feed no longer will include the DUNS numbers for the intermediary companies, only the parent company, called the Global Ultimate DUNS Number, and the part of the company subsidiary that won the award from the government.

Hudson Hollister, executive director of the Data Transparency Coalition and an outspoken critic of DUNS, said the use of proprietary data standards prevents the information from being freely shared and used.

“As long as the proprietary DUNS Number remains in place as the default standard identifier for contractors and grantees, federal spending information will not be open data,” Hollister said. “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.”

Hollister said the end result of removing references to DUNS in the FAR will remove the long-held presumption that this was the only option for agencies to track spending.

Scott Amey, general counsel for the Project on Government Oversight, also praised the proposed rule.

“It’s about time that the federal government unshackles itself from DUNS numbers. The proposed rule is a good start to free it from an identification system that isn’t working and is costly,” Amey said by email. “It’s ridiculous to think that the current system allows large contractors to have hundreds of DUNs numbers, which make it impossible to obtain a complete picture of a company and its government work. This is a long time in coming, and I hope that the government is serious about creating or using a new identification system that works for it, contractors, and taxpayers.”

The impetus for this change is two-fold. The annual cost of the proprietary information and the Digital Accountability and Transparency Act (DATA Act) are opening the door for moving to a new unique identifier.

OMB and Treasury said they would temporarily designate the DUNS number as the official identifier of contractors and organizations receiving federal money. Hollister said at the same time OMB and Treasury promised the government would provide a pathway to eventually move away from the use of a proprietary data standard.

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