A new open corporate ID means one less barrier for U.S. federal contracts and spend analysis
We are big fans of open, non-proprietary IDs that allow for data to be tracked and shared across government silos. One vital part of data infrastructure is how a government tracks the identity of the different companies with whom it does business and contracts vital goods and services. Given the trillions of dollars being spent on government contracts, grants, and other spending each year, it’s helpful to have a record of the corporate [ID] entities that are receiving U.S. federal funds to know who is getting taxpayer money, how much, what for, and whether it is being spent honestly and effectively.
Today, we saw an evolution in the U.S. on this topic after 10 years in the making. April 4 marks the day that the federal government is transitioning from using a DUNS number (a proprietary ID used by Dun & Bradstreet) to a new, non-proprietary, reusable Unique Entity Identifier (UEI) – so the federal government is moving from something that was not in their control to something that is.
To their credit, DUNS provides accurate and timely information on more than 250 million global businesses. But, a private monopoly on data and data processes that are hardwired into government systems and regulations has become increasingly problematic in a world of open government and open data, as the Government Accountability Office made clear.
Why is it a big deal? Implementing more open, user-friendly systems allows for better sharing, increased innovation and competition, and reduced costs, which is critical if we want to rebuild and support a devastated business ecosystem.
After more than 40 years, the U.S. government has finally revisited and rebid a long standing contract and brought operating costs down from more than $19 million per year to about $8 million per year.
A more integrated online user experience directly with SAM.gov, rather than a third-party vendor website, has been created which will reduce barriers of entry for new vendors, particularly for small businesses often with limited time to navigate multiple cumbersome online systems. Removing barriers increases the possibility of better equity in government procurement.
There will be the ability to better track who is receiving contracts across agencies and reduce duplicative spending (i.e. saving money) as well as highlight businesses getting the same contracts year-over-year and hopefully encourage outreach and competition from new vendors. It will also provide an additional tool to power up the implementation of last year’s Section 885 of the National Defence Authorization Act, requiring all companies receiving federal contracts or grants over $500,000 to report their beneficial owners, with additional crosslinking and cross-checking opportunities.
Governments around the world who have embraced the Open Contracting Data Standard have demonstrated the value that more and better open data can be a true lever for change.
What’s needed next?
- Clarification on the future of the management of UEI. While this transition should make managing the system, and future adjustments easier to manage, the U.S. government needs proper oversight of the contract to avoid future vendor lock-in and rising costs. [From the early 2000s to 2012, the DUNS system contract increased by 1800% from $1 million to $19 million.] Or, ensure that procurement staff is properly staffed up to manage an already busy workload.
- Continue to move all procurement data into an open, machine readable format. While the U.S. federal government opens up millions of data points each year, a lot of meaningful information is either missing altogether or buried in PDFs. In particular we need better data to know how federal funding and contracts are affecting different demographic groups and industries. The administration has made commitments to ensure more contracts are awarded to women and minority businesses and companies making goods in America, but there is work to do to know if that’s really happening.