For decades, the General Services Administration contracted with the company Dun & Bradstreet to provide unique identifying numbers for businesses. These numbers — called Data Universal Numbering System or DUNS numbers — allow GSA to track contractors and other recipients of federal funds.

But the cost of using this service has grown from $1 million in 2002 to about $19 million per year under the current contract, according to the Government Accountability Office. GSA awarded the current contract in 2010 for three years with an additional five-year option.

The increasing reliance on Dun & Bradstreet is “raising alarm bells,” said Bill Woods, director of acquisition issues at GAO, in an interview with The Federal Drive with Tom Temin and Emily Kopp. Woods is the author of a GAO report examining GSA’s alternatives to using Dun & Bradstreet, in response to a request from a Senate Appropriations subcommittee.

“It is a tremendously complex issue in order to be able to switch because … these numbers are everywhere. They reside in many different systems across the federal government, so that the switching cost and the turbulence that would be created would be significant,” Woods said.

GSA issued a sources sought announcement two years ago and several companies stepped forward saying they were able to provide a similar service, but the problem at that time was the Federal Acquisition Regulation required a company have a DUNS number, Woods said.

Two factors have led to the expansion of DUNS numbers’ use in government. First, the Federal Funding Accountability and Transparency Act of 2006 created USASpending.gov, which allows for the public to search for recipients of federal contracts, grants and loans. Second, the Recovery Act of 2009 provided “a whole host of other entities” that, although not formally doing business with the government, were required to have a DUNS number.

GSA could also determine that it makes more sense to bring the identifying service into the government — similar to assigning a tax identification number to businesses, Woods said.

But before switching to a company or bringing the service in-house, GSA would first have to “ease some of the restrictions” under its current contract with Dun & Bradstreet. For example, if the contract terminates, GSA would be forced to purge some contractor information, such as addresses and business verification.

“That creates problems not only for GSA but also for the other federal agencies that use the DUNS numbers,” Woods said.

GAO has no opinion on how GSA should proceed with its contract, but it recommends GSA change this contract termination provision should it stop using Dun & Bradstreet, Woods said.

One lesson learned from GSA’s situation is that planning would have prevented some of the challenges the agency now faces.

“This perhaps could have been foreseen a number of years ago. Dun & Bradstreet and GSA have had a contract in place since the late 1970s and this issue of a proprietary system has been in place for a long period of time,” Woods said. “One would hope we’re reaching the culmination of GSA’s analysis.”

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