Do contractor ID numbers taint transparency?

As states near a deadline for their first set of comprehensive reports on economic stimulus spending, a debate is brewing over the government's reliance on a private-sector coding system used to identify the beneficiaries of federal largess.

Under federal rules, stimulus aid recipients — including public agencies, nonprofit organizations and private contractors — must identify themselves in the reports by their Data Universal Numbering System identifiers. Dun and Bradstreet owns and operates the DUNS service.

In accordance with the Obama administration’s push for greater transparency, advocacy groups are reviving long-standing questions about the suitability of corporate ownership of such a critical government database and pointing out ways in which they claim its proprietary nature limits public and agency access to information.

For example, USAspending.gov uses DUNS numbers to identify contractors. But members of the public who want a comprehensive search to reveal the names of those contractors’ parent companies will have a hard time finding that information, said Gary Bass, executive director of OMB Watch, a longtime critic of the DUNS numbers.

“When you want to download certain kinds of data, you are blocked,” Bass said. “For transparency, you do not want a proprietary identifier. The government ideally should have its own identifying number system.” He said the federal Employer Identification Number could serve that purpose.

Thomas Lee, technical lead for Subsidyscope.com, a project led by the Pew Charitable Trusts that seeks to make government spending more transparent, said full public access to the DUNS database is not possible at this time. Although Dun and Bradstreet has allowed access for research purposes, it has done so on a limited basis. “Right now, we have a one-off arrangement that allows us access to some of the data, but we cannot make it publicly available,” he said.

Another concern centers on the completeness and accuracy of the DUNS database. Problems arise when companies merge, split or restructure because units might take on new DUNS numbers at various points in that cycle. Although Dun and Bradstreet defends the accuracy of DUNS, others say it is impossible to verify that accuracy without full access.

“DUNS is good enough to be useful, but it is constantly getting out-of-date,” Lee said, adding that companies would have a much greater incentive to keep their status current if it were a government-run system with required registration.

In addition, state officials are concerned about not having full visibility into the DUNS database. The National Association of State Auditors, Comptrollers and Treasurers sent a letter to the Office of Management and Budget last year that characterized the DUNS system as unreliable and problematic and expressed concern about the data being privately owned.

State agencies find it difficult to manage tens of thousands of DUNS numbers, some of which are outdated or duplicated, said Cornelia Chebinou, the association’s Washington director. Dun and Bradstreet has been helpful, but the problems persist, she added.

Dun and Bradstreet has assigned nearly 150 million DUNS numbers since it launched the system in 1963, and the company performs 1.5 million updates daily to maintain accuracy, said company spokeswoman Ana Cano.

Dun and Bradstreet “works closely with our government customers to ensure transparency and to provide the insights required to ensure the success of their agency missions,” officials said in a statement.

OMB officials did not respond to a request for comment.

The DUNS system’s transparency shortcomings will likely taint the new Recovery.gov database, too, Bass said. The site was created to receive reports from recipients of the $787 billion in funding under the economic stimulus law, with the first comprehensive reports from state agencies due Oct. 10.

“Was it wise for the government to pay a private company for a numbering system?” Bass asked. “It was convenient, but in the long run, it is not the best way.”

R. Kinney Poynter, executive director of the state auditors group, agreed. “It would seem that a government identification system would be maintained by a government entity, not a private-sector entity,” he said.