Unique Identification Codes for Federal Contractors: DUNS Numbers and CAGE Codes

May 31, 2017 (R44490)
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Contents

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Tables

Appendixes

Summary

An essential element of the federal government's acquisition system is the capability to identify the businesses, and other types of entities, that do work for the government. Accurate identification of potential contractors and incumbent contractors facilitates a host of procurement processes while contributing to the transparency of federal government procurement.

The federal government uses a proprietary system, Dun & Bradstreet's (D&B's) Data Universal Numbering System (DUNS), to uniquely identify the entities with which it does business. At no cost to the applicant, D&B assigns a DUNS number—a nine-digit unique identification code—to prospective government contractors. (Businesses that are not would-be government contractors also may apply for a DUNS number.) The federal government's use of DUNS, however, is not limited to the identification numbers. D&B provides, pursuant to its contract with the General Services Administration (GSA), 7 types of software products and 14 data products that enable the government to use DUNS for a variety of acquisition-related functions, such as paying contractors. Furthermore, approximately 80 data systems within the federal government contain DUNS information.

Congress may have concerns regarding the continued use of DUNS numbers and has expressed interest in exploring other options. At the request of a Senate subcommittee, the Government Accountability Office (GAO) examined the costs and data restrictions involved with using a proprietary identification system and studied alternatives for identification numbers for government contractors. The implementation of the Digital Accountability and Transparency Act (DATA Act; P.L. 113-101) is accompanied by similar, significant interest within Congress—and within the agencies charged with implementing the act—for exploring options for a nonproprietary contractor identification system.

One or more possible options might involve using an existing, nonproprietary identification system created and maintained by the federal government: the commercial and government entity (CAGE) code system. CAGE codes could be used as a stand-alone system, or incorporated into a hybrid system (e.g., combine CAGE codes with vendor-provided business products and services). The CAGE Branch of the Defense Logistics Agency (DLA) assigns the five-character alpha-numeric identifiers to entities located in the United States and outlying areas.

Regulatory changes in 2014 and 2016 potentially pave the way for the government to adopt a new system. First, in 2014, a rule was adopted in the Federal Acquisition Regulation (FAR) requiring prospective contractors to obtain CAGE codes. This rule also requires the contractor to provide to the government, if applicable, the name and CAGE codes of its immediate owner and its highest-level owner. Second, a final rule issued in 2016 removed all references to the Data Universal Numbering System and DUNS numbers from the FAR and inserted the terms unique entity identifier. The preface to the proposed rule noted that the government is not ready to eliminate DUNS numbers at this time, but that removing references to a proprietary system and identifier "will provide opportunities for future competition that can reduce costs to taxpayers."

In early 2017, GSA initiated a process for exploring alternatives to DUNS by posting a request for information (RFI) for entity identification and validation services on the Federal Business Opportunities (FedBizOpps) website. GSA's tentative schedule is to issue a solicitation in summer 2017 and award a contract prior to the expiration of its contract with Dun & Bradstreet, which will occur in June 2018.


Unique Identification Codes for Federal Contractors: DUNS Numbers and CAGE Codes

Introduction

Hundreds of thousands of businesses and other entities1 provide supplies, equipment, and services to federal agencies each year through procurement contracts (contracts).2 Accurate identification of prospective and incumbent government contractors (or vendors) facilitates the federal government's procurement process, helping to ensure contractors are paid, supporting contract administration activities, enabling the identification of corporate families (e.g., a corporation and its subsidiaries), and, generally, contributing to the transparency of federal government procurement. To aid in accurately identifying the entities with which it does business, the federal government relies on a proprietary system, Dun & Bradstreet's (D&B's) Data Universal Numbering System (DUNS). Dun & Bradstreet assigns unique identification codes known as "DUNS numbers" to prospective federal government contractors. The federal government has used DUNS since at least the early 1990s to meet its needs for an identification system and related services.3

Whereas the government's continued use of DUNS was supported by the executive branch as recently as 2006, as documented in a Federal Register notice,4 the federal government has begun exploring alternatives to DUNS and DUNS numbers again. Congress and the executive branch share an interest in containing costs; acquiring, or possibly developing, a nonproprietary identification system; ensuring continued access to, if not outright ownership of, data contained in the identification system; and transparency. Notable legislative initiatives in this area have included passage of the Federal Funding Accountability and Transparency Act (FFATA; P.L. 109-282) and the Digital Accountability and Transparency Act (DATA Act; P.L. 113-101). The government's change in perspective is reflected in separate, though possibly coordinated, efforts by the General Services Administration (GSA), and the Office of Management and Budget (OMB) and the Department of the Treasury, to examine possible alternatives to DUNS. The Treasury Department-OMB effort is related, as discussed below, to implementation of the DATA Act.

The following two sections, "Data Universal Numbering System" and "Commercial and Government Entity (CAGE) System and Codes," provide basic information about these two systems, respectively. The final section discusses the federal government's reliance on DUNS, interest in and exploration of alternatives to DUNS, and government actions that possibly could pave the way for the adoption of an alternative system, or a hybrid system that includes DUNS. The CAGE system, which is an existing, federal government identification system, may be a candidate for either option.

This report focuses on identification numbers for acquisition and acquisition-related purposes that government contractors, generally, are required to have. It does not address taxpayer identification numbers (TINs), which government contractors also are required to have and which are used by the Internal Revenue Service (IRS) in the administration of tax laws.5 This report also does not cover other types of recipients of federal money (e.g., grant award recipients) who are required to obtain DUNS numbers.6

Data Universal Numbering System

Created by Dun & Bradstreet in 1963, DUNS is "a unique global business identification system."7 The system includes DUNS numbers, which are "nine-digit non-indicative numbering sequence[s] and [are] assigned at the lowest organizational level."8 As a non-indicative numbering sequence, a nine-digit DUNS number does not in and of itself have any meaning. The lowest organizational level means a "business location[] with a unique, separate and distinct operation."9 That is, each business location that is a unique, separate, and distinct operation is assigned its own DUNS number.10 However, some entities have the same, or similar, names.11 See Figure 1 for an illustrative list of companies and their respective DUNS numbers. A business retains its DUNS number throughout its lifecycle: DUNS numbers do not have an expiration date and D&B neither reissues nor reassigns DUNS numbers.12

Generally, prospective government contractors are required to register in the federal government's System for Award Management (SAM) prior to the award of a contract,13 and an entity must have a DUNS number in order to register in SAM.14 SAM is "the primary Government repository for prospective Federal awardee and Federal awardee information and the centralized Government system for certain contracting, grants, and other assistance-related process."15 A prospective government contractor may request a DUNS number through an online portal.16 A company or organization that is required by the federal government to obtain a DUNS number for the purpose of competing for a contract does not pay a fee for its DUNS number.17

Figure 1. Examples of DUNS Numbers

Source: U.S. General Services Administration, "System for Award Management," at https://www.sam.gov.

D&B's system, in addition to providing the means for uniquely identifying contractor entities, may be used to "roll-up Government procurements to the ultimate parent organization to show the corporate family receiving U.S. obligations" and contains business-related information.18 Examples of the types of information contained in the Data Universal Numbering System include number of employees, sales volume, line of business, net worth amount, foreign ownership, liens, history of business, criminal activity indicator, business name change, legal structure, judgments, bankruptcy indicator, credit rating, and parent relationship.19 DUNS information and services used by the federal government include the names, addresses, and parental linkages of businesses and "logic, corporate research, and corporate business linkage maintenance."20

Commercial and Government Entity (CAGE) System and Codes

The Department of Defense (DOD) created the CAGE system between 1945 and 1950; its original purpose was to catalog various items (e.g., part numbers, National Stock Number, and drawings).21 Subsequently, other purposes were added, such as using CAGE codes to identify vendors.22 The CAGE Branch of the Defense Logistics Agency (DLA), which is the only authorized source of these codes, assigns CAGE codes to entities located in the United States or its outlying areas.23 A CAGE code is a five-character alpha-numeric identifier that belongs to a nonproprietary system created by DOD. Similar to DUNS numbers, some contractors may have the same, or similar, names. See Figure 2 for an illustrative list of companies and their respective CAGE codes. DLA assigns CAGE codes "per legal entity at individual physical addresses (i.e., the same entity at the same physical address will not be assigned two or more CAGE codes)."24 There is no cost for obtaining a CAGE code.25

Figure 2. Examples of CAGE Codes

Source: U.S. Department of Defense, Defense Logistics Agency, "Logistics Information Service," at https://cage.dla.mil/search//begin_search.aspx.

Brief Comparison of DUNS and the CAGE System

Table 1 compares selected features of DUNS and the CAGE system.

Table 1. Comparison of DUNS and the CAGE System

Feature

DUNS

CAGE System

Format of identification code

Nine digits

Five alpha-numeric characters

Criteria for assignment of an identification code

DUNS number is assigned to the lowest organizational level.

CAGE code is assigned per legal entity at individual physical addresses.

Cost for prospective and active government contractors to obtain identification code

None

None

Proprietary system?

Yes

No

System owner

Dun & Bradstreet

Defense Logistics Agency

Source: Congressional Research Service.

The Federal Government's Reliance on DUNS and Efforts to Explore Alternatives

DUNS numbers, and the information associated with them, facilitate the smooth, efficient operation of the government's acquisition system. The related products and services that the government obtains from D&B are also integral to the functioning of various procurement processes and activities. (See Appendix A for brief descriptions of the software and data products the federal government purchases from D&B.) Using DUNS, the federal government is able, for example, to uniquely identify the entities that perform work for, or provide supplies or equipment to, agencies; verify contract awardees' information; and track the amount of funds obligated to corporate families. In addition to GSA, which is responsible for many of the federal government's acquisition systems that include or use DUNS numbers and which awards contracts to D&B for the use of DUNS, various federal agencies purchase a variety of D&B services.

On June 29, 2010, GSA awarded a sole source contract, under the authority of FAR §6.302-1(a)(2), to Dun & Bradstreet for the use of its Data Universal Numbering System.26 The contract consists of a three-year base period and five one-year option periods. The effective date of the contract was June 30, 2010; the completion date for the base period was June 29, 2013; and the estimated ultimate completion date (if all five option periods are exercised) is June 29, 2018. The present value of the contract, including the base period and all option periods, if exercised by GSA, is $135,111,119.67.27

Concerns regarding the cost of using a proprietary service and related issues were publicized in a 2012 Government Accountability Office (GAO) report, which also examined possible alternatives to DUNS and anticipated challenges in replacing DUNS with a different identification system. (See below for a discussion of the GAO report.) GSA explains, in a special notice it posted on the government's Federal Business Opportunities website, why the federal government relies on DUNS numbers and D&B services.

The Federal Government, GSA, and Integrated Acquisition Environment have a regulatory mandate to identify and report on corporate relationships and linkages using the DUNS Number as the Contractor Identification Number for Federal Contractors, as set forth in FAR 4.605(b). D&B is the only source that can provide the required identification and reporting services. The DUNS number is proprietary to and controlled by D&B and there is no other source for this information.... No other authoritative sources of corporate enterprises exist today to provide [the] product and services which are uniquely available from the D&B world base files. The logic, corporate research, and corporate business linkage maintenance are all critical services not licensed by D&B to third parties.28

In the same notice, GSA also describes the extent of the federal government's reliance on D&B services and products.

The Government is fully leveraging [the] proprietary commercial product services uniquely offered by D&B to enhance data standards, quality, and reliability in such critical areas as contract award and management (back office Contract Writing Systems), advertising and delivery of solicitation and specifications data (Federal Business Opportunities and Federal Technical Documentation System), management and public reports (Federal Procurement Data System, Federal Funding and Accountability Transparency Act, American Recovery and Reinvestment Act (Recovery.gov and Federalreporting.gov) and USAspending.gov), debarred and suspended bidders (Excluded Parties List System), vendor submissions of subcontracting accomplishments (Electronic Subcontract Reporting System), past performance collection (Past Performance Information Retrieval System), for payment and invoicing (back office Financial Writing Systems and the Grants Community (Grants.Gov) and the Loans Community because the research has shown that D&B is uniquely positioned as the sole source to provide this capability.29

The written documentation for this procurement lists 7 software products and 14 data products that are required by GSA and that can be purchased only from D&B. These products enable the government to, for example, transfer files, integrate information residing on diverse systems using DUNS numbers, and verify a business's DUNS number and related information. A list of these products is available in Appendix A.

GAO Examination of the Issue

In its 2012 report that examined alternatives to using DUNS, GAO described several issues related to the government's reliance on the Data Universal Numbering System.

As reported by GAO, GSA initially considered four options: (1) continue to use DUNS and related services; (2) if acquisition planning identified potential competitors to D&B, conduct a procurement to select a contractor; (3) "[c]hange to a non-proprietary solution"; or (4) switch to government-owned system coupled with vendor-provided data services.33 Eventually, GSA winnowed its options: continue to use D&B's DUNS numbers, or replace it with a government-owned numbering system.34 However, GAO also reported that GSA had begun another effort to identify options and was expected to issue a report by September 2012. The status and content of this report is not known, as GSA "never intended [it] to be a public document."35

Anticipated benefits from replacing DUNS with a government-owned, nonproprietary system include "long-term cost savings, unlimited data rights, and greater transparency."36 Switching from one set of identification codes to another, however, most likely would trigger a series of changes. Anticipated changes, as described by GAO, could include the following:

Potentially compounding the challenges involved in replacing DUNS with another unique identification system is the extent to which the federal government relies on D&B's products. "[A]pproximately 80 data systems [within the federal government contain] DUNS information," according to GSA, and "would therefore have to be modified in the event of a transition to a new numbering system."42

The DATA Act and Unique Identifiers

Enacted on May 9, 2014, the DATA Act gave the Director of OMB and the Secretary of the Treasury responsibility for operating the USAspending.gov website, including the development, or adoption, of data elements. The DATA Act mentions "unique identifiers … for entities43 receiving Federal awards [including contract awards] that can be consistently applied Government-wide."44 The Department of the Treasury and OMB have named this data element the awardee/recipient unique identifier.45

The discussion of this data element by the Treasury and OMB (1) noted that the federal government continues to use the Data Universal Numbering System; (2) described relevant regulatory changes (i.e., the removal of references to DUNS in Title 2 of the Code of Federal Regulations, which involves grants, and the addition of provisions regarding an existing government-owned nonproprietary identification system to the FAR); (3) alluded to possible challenges if the government opts to implement a new identification system; and (4) confirmed that the federal government is exploring alternatives to DUNS.46 In their discussion of the awardee/recipient unique identifier data element, which is provided below, the Department of the Treasury and OMB describe the ongoing effort to identify and select an identification system that will meet the needs of the federal government.

Going forward, the Federal government will establish a transparent process for exploring potential alternatives to existing entity identifiers. OMB and Treasury, in collaboration with the General Services Administration and the Award Committee for E-Government47 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. 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 complete in FY2017.48

Individual Agencies That Use Dun & Bradstreet's Products and Services

Whereas DUNS numbers and certain D&B-provided services are necessary for the functioning of federal acquisition processes, D&B also provides products and services to individual federal agencies that serve their (nonacquisition) needs. Company literature states that D&B has worked with the Federal Bureau of Investigation (FBI) for over 20 years and has provided services to the Defense Security Service (DSS), which is a component of the DOD. D&B notes that "[n]early all three letter agencies,49 multiple intelligence task forces, and National Labs use D&B Solutions to monitor foreign and domestic businesses and supply chains."50 For example, D&B's products may aid in (1) tracking "the activities of all businesses and commercial organizations related to the nuclear, chemical and biological industries"; (2) "navigat[ing] the enormously complex chains of ownership and association used by international businesses and trade organizations that finance terrorism or other activities that are harmful to the U.S."; or (3) "unveiling potential vulnerabilities and threats posed to the global supply chain or within the U.S. government national security apparatus."51

During the period FY2011-FY2015, 39 agencies submitted data to FPDS that indicate they were doing business with Dun & Bradstreet. The list of agencies is in the following table.

Table 2. Federal Agencies with Entries in FPDS Involving Dun & Bradstreet

FY2011-FY2015

Broadcasting Board of Governors

Department of Labor

International Boundary and Water Commission

Consumer Product Safety Commission

Department of State

Library of Congress

Corporation for National and Community Service

Department of Transportation

National Aeronautics and Space Administration

Department of Agriculture

Department of the Treasury

National Endowment for the Humanities

Department of Commerce

Department of Veterans Affairs

National Labor Relations Board

Department of Defense

Environmental Protection Agency

Nuclear Regulatory Commission

Department of Education

Equal Employment Opportunity Commission

Peace Corps

Department of Energy

Federal Election Commission

Pension Benefit Guaranty Corporation

Department of Health and Human Services

Federal Energy Regulatory Commission

Railroad Retirement Board

Department of Homeland Security

Federal Maritime Commission

Securities and Exchange Commission

Department of Housing and Urban Development

Federal Trade Commission

Small Business Administration

Department of the Interior

General Services Administration

Smithsonian Institution

Department of Justice

Government Accountability Office

Social Security Administration

Source: Federal Procurement Data System-Next Generation, at https://www.fpds.gov.

The effect, if any, on other agencies if GSA were to opt for an alternative to DUNS is unknown.

Changes to the FAR

As noted above, one of the barriers to changing to a new system was text in the FAR that referenced DUNS and DUNS numbers. A final rule, which was issued on September 30, 2016, revised the FAR by removing references to DUNS and DUNS numbers and inserting the term unique entity identifier.52 A unique entity identifier is "a number or other identifier used to identify a specific commercial, nonprofit, or government entity."53 The rationale for this change, which was provided in the preface to the proposed rule, is as follows:

[E]limination of regulatory references to a proprietary entity identifier will provide opportunities for future competition that can reduce costs to taxpayers. The current requirement limits competition by using a proprietary number and organization to meet the identification need as well as the need for other business information associated with that number.54

GSA Explores Alternatives

In February 2017, GSA posted a request for information (RFI) for "government-wide entity identification and validation services" on the federal government's Federal Business Opportunities (FedBizOpps) website. The RFI stated that the government "is exploring all viable means of continuing to meet its ongoing need for entity identification and validation services after the ... expiration [of its contract with Dun & Bradstreet in June 2018]."55 GSA noted, in a May 2017 update, that it had received "an impressive number and variety of responses" from industry and other stakeholders and that it had begun reviewing the responses "to determine the viability of proposed alternatives."56 GSA's tentative schedule is to issue a solicitation for identity identification and validation services in summer 2017 and to award a contract prior to June 2018.57

New Requirement to Use CAGE Codes

Although DOD, and perhaps other agencies, have used CAGE codes for some time,58 it was not until 2014 that an executive branch-wide requirement for prospective contractors to obtain a CAGE code was established. Effective November 1, 2014, an offeror59 for a procurement with a value greater than the micro-purchase threshold is required to have a CAGE code prior to contract award when "there is a requirement to be registered in SAM or a requirement to have a DUNS Number in the solicitation."60 For entities that are required to register in SAM but do not already have a CAGE code, one will be assigned when they register in SAM.61

An entity that is required to be registered in SAM, or to have a DUNS number, must also provide, if applicable, the names and CAGE codes of its immediate owner and its highest-level owner in the applicable solicitation provision (i.e., FAR §52.204-17). The immediate owner is "an entity, other than the offeror, that has direct control of the offeror. Indicators of control include, but are not limited to, one or more of the following: Ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees."62 The highest-level owner "is the entity that owns or controls an immediate owner of the offeror, or that owns or controls one or more entities that control an immediate owner of the offeror. No entity owns or exercises control of the highest level owner."63

The rule that was adopted in May 2014 and its preface include language that explains how CAGE codes might be used, describes their anticipated utility, and compares the CAGE system with DUNS. The policy statement for CAGE codes, which appears in the FAR, identifies how this system could be used to facilitate the procurement process. CAGE codes may be used to

The preface notes that the use of CAGE codes may facilitate transparency and "support successful implementation of business tools that provide insight into ... [f]ederal spending patterns across corporations ... [c]ontractor personnel outside the United States" and traceability in supply chains and performance issues.65

Also included in the preface is language that distinguishes between DUNS and the CAGE system. The following text was provided in response to a comment on the proposed rule.66

There is some corporate linkage in SAM provided by the commercial entity, Dun & Bradstreet (D&B); however, the methodology by which D&B establishes ownership is proprietary and does not necessarily conform to the definitions in this case. The final rule instead establishes the use of a Government-managed unique identifier governed by established international rules (under NATO). Additionally, the rule provides the contractor the opportunity to provide what it believes is the correct information, rather than relying on information from an outside commercial source.67

Appendix A. Dun & Bradstreet Subscription Services Purchased by GSA

Citing FAR §6.302-1(a)(2), GSA awarded a sole source contract to Dun & Bradstreet on June 29, 2010, for the use of its Data Universal Numbering System. As required by FAR §6.303, GSA provided written justification and approval (J&A) for using noncompetitive procedures for this procurement.68 GSA listed the D&B software and data products required to meet its needs in the J&A.

Software

Data Products

Appendix B. Generic Entity Identifiers

Under certain circumstances, as specified in the Federal Acquisition Regulation, a generic entity identifier may be used for the purpose of reporting contract award data to the Federal Procurement Data System.72 The various circumstances under which a generic entity identifier may be authorized are as follows:

The General Services Administration's Integrated Award Environment (IAE) program office maintains and assigns authorized generic entity identifiers.74

The use of a generic entity identifier helps to mask the identity of a particular contractor while ensuring the accounting of the obligations associated with the contractor. On the other hand, the use of generic identifiers limits transparency and precludes a contractor from being able to "access and perform its own reporting requirements ..., because the contract is not associated with the contractor in Federal-wide processes. As such, the use of a generic DUNS number [generic entity identifier] should be limited to those actions where it is truly necessary."75

A CAGE code is not required for acquisitions that involve a generic DUNS number (or a generic entity identifier) and that are funded by some agency other than DOD or the National Aeronautics and Space Administration.76

Author Contact Information

[author name scrubbed], Specialist in American National Government ([email address scrubbed], [phone number scrubbed])

Footnotes

1.

Although, generally, the definition of the term entity may be considered to be broader than the term business, these terms are used interchangeably, unless noted otherwise, in this report. The definition of entity is provided here to illustrate that many different types of organization may, and do, provide goods and services to the federal government pursuant to contracts. "The term 'entity'- (A) includes, whether for profit or nonprofit-(i) a corporation; (ii) an association; (iii) a partnership; (iv) a limited liability company; (v) a limited liability partnership; (vi) a sole proprietorship; (vii) any other legal business entity; (viii) any other grantee or contractor that is not excluded by subparagraph (B) or (C); and (ix) any State or locality; (B) on and after January 1, 2009, includes any subcontractor or subgrantee; and (C) does not include-(i) an individual recipient of Federal assistance; or (ii) a Federal employee." Section 2(a)(2) of P.L. 109-282, Federal Funding Accountability and Transparency Act of 2006, as amended by P.L. 110-252. Colleges and universities, Native American tribes, and local and state governments are examples of different types of entities that may do business with the federal government.

2.

A procurement contract is a "contract between the government and a private party to provide supplies or services (including construction)." The Government Contracts Reference Book: A Comprehensive Guide to the Language of Procurement, ed. Ralph C. Nash, Jr., Steve L. Schooner, Karen R. O'Brien-DeBakey, and Vernon J. Edwards, 3rd ed. (Riverwoods, IL: CCH, 2007), p. 450.

3.

U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics Space Administration, "Federal Acquisition Regulation; Submission for OMB Review; Use of Data Universal Numbering System (DUNS) as Primary Contractor Identification," 71 Federal Register 26470, May 5, 2006, at https://www.gpo.gov/fdsys/pkg/FR-2006-05-05/pdf/06-4212.pdf. For a period of time, the federal government had its own identification system, the Contractor Establishment Code (CEC) system. A Federal Register entry dated July 11, 1989, stated that entities competing for federal government contracts in excess of $25,000 would be asked to provide their CECs to the contracting agency. U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation (FAR); Miscellaneous Amendments," 54 Federal Register 29279, July 11, 1989. A final rule, which appeared in the December 21, 1992, Federal Register, implemented "the new Government-owned, contractor-operated contractor establishment code (CEC) numbering system to identify Federal contractors." The preface to this rule stated that the CEC system "replaces the Dun and Bradstreet Data Universal Numbering System which is currently being phased out." U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Contractor Establishment Code," 57 Federal Register 60572, December 21, 1992. However, beginning in 1996, subsequent Federal Register entries revealed that the federal government had chosen DUNS over the CEC system. An interim rule issued on December 20, 1996, included the following text in its preface: The amendments to the FAR effected by this rule "replace the Contractor Establishment Code (CEC) with the Data Universal Numbering System (DUNS) number as the means of identifying contractors in the Federal Procurement Data System." U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Use of Data Universal Numbering System as Primary Contractor Identification," 61 Federal Register 67412, December 20, 1996. This interim rule was adopted as final with changes; the effective date of the final rule was April 24, 1998. U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Use of Data Universal Numbering System as the Primary Contractor Identification," 63 Federal Register 35, February 23, 1998. This excerpt from a 2006 Federal Register entry summarizes the government's reasoning regarding its decision to use DUNS.

"In the late 1980's and early 1990's, the Government maintained a proprietary database of Contractor Establishment Codes (CEC) numbers. This database attempted to recreate the D&B [Dun & Bradstreet] world wide database on a much smaller scale. This was a Government-owned contractor-maintained database. The contractor who was awarded the responsibility to maintain the database was D&B. After review of the project in 1994, the Government chose again to use the commercially available DUNS numbers to fulfill its need. The decision was based on several factors, most notably the fact that the DUNS number is broadly used, both domestically and worldwide. Since the E-Government Act of 2002 [P.L. 107-347], the Government has chosen several guiding principles. One of them is to use commercial practices wherever feasible. D&B not only produces a unique number, but they also have a mature business providing contractor association. The Government uses the information about one contractor and their relationship to other contractors for reports and we have no desire to compete with that line of work. Therefore, the decision to use D&B is still strongly supported by the Administration." U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics Space Administration, "Federal Acquisition Regulation; Submission for OMB Review; Use of Data Universal Numbering System (DUNS) as Primary Contractor Identification," 71 Federal Register 26470, May 5, 2006.

4.

Ibid.

5.

48 C.F.R. §4.902(a); U.S. Department of the Treasury, Internal Revenue Service, "Taxpayer Identification Numbers," at http://www.irs.gov/Individuals/International-Taxpayers/Taxpayer-Identification-Numbers-TIN. The TIN "may be either a Social Security Number or an Employer Identification Number." 48 C.F.R. §52.204-3(a). The FAR is the Federal Acquisition Regulation. It consists of Parts 1-53 of Title 48 of the Code of Federal Regulations. Using GSA's reference as an example, FAR §6.302-1(a)(2) is the same section as 48 C.F.R. §6.302-1(a)(2). Generally, it is common practice to refer to the FAR in the text while citing Title 48 of the C.F.R. in footnotes.

6.

OMB established, in 2003, a requirement for grant applicants to obtain a DUNS number. The June 27, 2003, policy directive requires grant applicants to provide a DUNS number "when applying for Federal grants or cooperative agreements on or after October 1, 2003." U.S. Office of Management and Budget, "Use of a Universal Identifier by Grant Applicants," 68 Federal Register 124, June 27, 2003, p. 38403, at http://www.gpo.gov/fdsys/pkg/FR-2003-06-27/pdf/03-16356.pdf. This policy applies to all applicants for grants or cooperative agreements, except "[i]ndividuals who would personally receive a grant or cooperative agreement award from the Federal government apart from any business or non-profit organization they may operate" and except "[a]ny applicant that receives an exemption, or an applicant under a program that receives an exemption." Only OMB may grant exemptions. Ibid., pp. 38404-38405.

7.

Dun & Bradstreet, "The D&B D-U-N-S® Number," August 2013, at http://www.dnb.com/content/dam/english/dnb-data-insight/duns_number_overview_2011.pdf.

8.

Dun & Bradstreet, "The D&B D-U-N-S® Number," August 2013, at http://www.dnb.com/content/dam/english/dnb-data-insight/duns_number_overview_2011.pdf. Dun & Bradstreet introduced the Data Universal Numbering System in 1963 as a means "to identify businesses numerically for data-processing purposes," which "helped bring business information into the computer age." Dun & Bradstreet, "Dun and Bradstreet Company History," at http://www.dnb.com/company/history.html.

9.

Ibid.

10.

Ibid., p. 1. Under certain circumstances, a generic DUNS number may be used for reporting data to FPDS. See Appendix B for additional information.

11.

For example, some of the larger, well-known companies, such as Boeing, Lockheed Martin, and Raytheon, have multiple lines of business, divisions, or subsidiaries with the same name, or similar names.

12.

Dun & Bradstreet, "The D&B D-U-N-S® Number," p. 2.

13.

48 C.F.R. §4.1102(a).

14.

48 C.F.R. §4.605(b); 48 C.F.R. §52.204-7; 8 C.F.R. §52.204-13; U.S. General Services Administration, System for Award Management User Guide, June 26, 2015, v3.3, p. 82, at https://www.sam.gov/sam/transcript/System_for_Award_Managementv3.1_v1.pdf. Entities involved in certain types of procurements made by the federal government are not required to obtain a DUNS number. Exceptions include classified contracts, contracts to support unusual or compelling needs, "[c]ontracts with individuals for performance outside the United States and its outlying areas," and purchases under the micro-purchase threshold when a government purchase card is used as "both the purchasing and payment mechanism." 48 C.F.R. §4.1102(a)(1), (2), (4), and (5). A classified contract is "any contract in which the contractor or its employees must have access to classified information during contract performance. A contract may be a classified contract even though the contract document itself is unclassified." 48 C.F.R. §2.101(b).Generally, the micro-purchase threshold is $3,500, but it differs for procurements involving construction, services subject to Service Contract Labor Standards (see Chapter 67 of Title 41 of the U.S. Code), and the acquisition of supplies or services "to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack." 48 C.F.R. §2.101(b).

15.

48 C.F.R. §2.101(b). SAM is available at https://www.sam.gov/portal/SAM/##11.

16.

The portal is available at http://fedgov.dnb.com/webform.

17.

Dun & Bradstreet, "Welcome to the Online DUNS Request Portal," at http://fedgov.dnb.com/webform.

18.

U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Updates to Contract Reporting and Central Contractor Registration," 77 Federal Register 69715, November 20, 2012. (Italics in original.)

19.

Dun & Bradstreet, "D&B Overview," hand-out, December 18, 2013, p. 26.

20.

U.S. General Services Administration, Office of Administrative Services, "Intent to Sole Source Notice," solicitation number DG03-00-DB-IAE, April 21, 2010 (posted date), at https://www.fbo.gov/?s=opportunity&mode=form&id=375baf9eadc681452096b67a463a15db&tab=core&_cview=0.

21.

Telephone conversation with Defense Logistics Agency, Commercial and Government Entity Branch, February 17, 2016.

22.

Ibid.

23.

U.S. Department of Defense, Defense Logistics Agency, "Commercial and Government Entity (CAGE)," at http://www.dlis.dla.mil/cage_welcome.asp; 48 C.F.R. §4.1801. Entities located outside the United States may obtain a North Atlantic Treaty Organization CAGE (NCAGE) code from their country's NATO Codification Bureau. An entity whose country is neither a NATO member nor a sponsored nation may request an NCAGE code from the NATO Support Agency (NSPA). An NCAGE code is required in order to register in the federal government's SAM. U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Commercial and Government Entity Code," 79 Federal Register 31187, May 30, 2014; 48 C.F.R. §204.7202-1(b)(1).

24.

U.S. Department of Defense, Defense Procurement and Acquisition Policy, Procedures, Guidance, and Information (PGI) §204.1870-2(a)(1), at http://www.acq.osd.mil/dpap/dars/pgi/pgi_pdf/current/PGI204_18.pdf. "The only exception to this rule is when an entity has a registration in ... SAM with multiple EFT [electronic funds transfer] addresses identified by multiple DUNS+4 numbers. In this case, each DUNS+4 number record is assigned a separate CAGE code to assist in correct processing of payments." DUNS+4 is an "option for organizations with multiple divisions or operating units at the same location. The vendor can add four additional characters (alphanumeric) of their choice to their DUNS to identify each additional account.... Each DUNS+4 will be assigned an individual CAGE Code for contract and remittance purposes only." U.S. Department of Defense, Defense Logistics Agency, "Commercial and Government Entity (CAGE) Frequently Asked Questions (FAQs)," at https://www.logisticsinformationservice.dla.mil/CAGE/faqs.aspx.

25.

U.S. Department of Defense, Defense Logistics Agency, "Commercial and Government Entity (CAGE) Frequently Asked Questions (FAQs)," at https://www.logisticsinformationservice.dla.mil/CAGE/faqs.aspx.

26.

The Competition in Contracting Act of 1984 (CICA; 41 U.S.C. §§3301 et seq.) and related FAR provisions permit executive branch agencies to engage in other than full and open competition (also known as noncompetitive procedures) under seven different circumstances. The circumstance cited by GSA in this procurement is as follows: "When the supplies or services required by the agency are available from only one responsible source, or, for DoD, NASA, and the Coast Guard, from only one or a limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for." 48 C.F.R. §6.302-1(a)(2). In addition to 41 U.S.C. §3304, which provides the seven circumstances when noncompetitive procedures may be used, CICA permits the exclusion of a particular source or restriction of a solicitation to small businesses (41 U.S.C. §3303) and the use of simplified procedures for small purchases (41 U.S.C. §3305(a)). All three of these provisions (Sections 3303, 3304, and 3305(a)) are exceptions to the requirement for federal agencies to engage in full and open competition (41 U.S.C. §3301).

27.

U.S. General Services Administration, "DUNS Subscription Service," synopsis, solicitation number DG03-00-DB-IAE, at https://www.fbo.gov; U.S. General Services Administration, "Justification and Approval for Other Than Full and Open Competition Under the Authority of FAR 6.302-1," June 23, 2010, p. 3. To access the latter document, conduct a search for the solicitation (DG03-00-DB-IAE) on the Federal Business Opportunities website, then click on the link "Justification and Approval for Other Than Full and Open." Additional information about this contract may be found at the Federal Procurement Data System-Next Generation (FPDS-NG or FPDS) website, at https://www.fpds.gov. Enter the contract award number, GS00I10AAC0140, into the ezSearch function on the FPDS website.

28.

U.S. General Services Administration, Office of Administrative Services, "Intent to Sole Source Notice."

29.

U.S. General Services Administration, Office of Administrative Services, "Intent to Sole Source Notice."

30.

U.S. Government Accountability Office, Government Is Analyzing Alternatives for Contractor Identification Numbers, GAO-12-715R, June 12, 2012, p. 7, at http://www.gao.gov/assets/600/591551.pdf.

31.

Ibid., p. 8.

32.

Ibid., p. 9.

33.

Ibid., p. 11.

34.

Ibid. GSA determined, in fall 2011, that several other companies were potential competitors for providing a unique identification system to the federal government, but concluded that it was "not in the government's best interest" to exchange one proprietary numbering system for another. None of the potential competitors offered a nonproprietary numbering system. Ibid.

35.

Email from U.S. General Services Administration, Office of Congressional and Intergovernmental Affairs, January 8, 2015.

36.

U.S. Government Accountability Office, Government Is Analyzing Alternatives for Contractor Identification Numbers, p. 12.

37.

Ibid.

38.

The System for Award Management does not include "SAM numbers." Apparently, "SAM numbers" were an anticipated feature at the time this GAO report was written. The GAO report stated: "Entities registering in SAM would have both a DUNS number and a number from the new system." U.S. Government Accountability Office, Government Is Analyzing Alternatives for Contractor Identification Numbers, p. 12. The GAO report was published June 12, 2012; SAM was launched in July 2012.

39.

Ibid.

40.

Ibid., pp. 12-13.

41.

Ibid., p. 13.

42.

Ibid.

43.

In this context, the term entities includes grant recipients. For additional information regarding federal grant data, see CRS Report R44374, Federal Grant Financial Reporting Requirements and Databases: Frequently Asked Questions, by [author name scrubbed].

44.

Section 3(2) of P.L. 113-101, Digital Accountability and Transparency Act of 2014.

45.

The data elements may be viewed at https://fedspendingtransparency.github.io/.

46.

U.S. Office of Management and Budget and U.S. Department of the Treasury, "Elements: Awardee/Recipient Unique Identifier, Awardee/Recipient Legal Entity Name, Ultimate Parent Unique Identifier Number, Ultimate Parent Legal Entity Name," July 13, 2015 (date this page was updated), at http://fedspendingtransparency.github.io/whitepapers/unique-id-business-name/. "While key information needed to verify legal entities may currently reside in a few providers, options for uniquely identifying those working with the Federal government have expanded. As a result, the Federal government is changing the FAR, and has changed [Title] 2 [of the] CFR, to remove the proprietary references to DUNS® numbers and instead refer to a 'unique entity identifier'.... While the proprietary references are being removed from the FAR, the requirement for standardized and unique identification of entities remains in order to protect taxpayers. There are significant risks to removing a single standard and changing identifiers on a regular basis and these include loss in data integrity, inability to identify responsible parties, consideration of appropriate past performance, and costs to change financial, grants, and procurement systems government-wide." U.S. Department of the Treasury and U.S. Office of Management and Budget, "Federal Spending Transparency, Elements: Awardee/Recipient Unique Identifier, Awardee/Recipient Legal Entity Name, Ultimate Parent Unique Identifier Number, Ultimate Parent Legal Entity Name," July 13, 2015 (date this page was updated), at http://fedspendingtransparency.github.io/whitepapers/unique-id-business-name/.

47.

The Award Committee for E-Government (ACE) is a working group of the Chief Acquisition Officers Council (CAOC). ACE's responsibilities include providing strategic direction for the Integrated Award Enterprise (IAE) and establishing its portfolio. A component of GSA, IAE oversees, among other things, GSA's online acquisition systems, including FPDS, Federal Business Opportunities (FedBizOpps) website, and System for Award Management (SAM).

48.

U.S. Department of the Treasury and U.S. Office of Management and Budget, "Federal Spending Transparency, Elements: Awardee/Recipient Unique Identifier, Awardee/Recipient Legal Entity Name, Ultimate Parent Unique Identifier Number, Ultimate Parent Legal Entity Name." A similar statement appears in the prefatory material accompanying the final rule that removes references to DUNS and DUNS numbers from the FAR. The final rule is available at https://www.gpo.gov/fdsys/pkg/FR-2016-09-30/pdf/2016-23198.pdf. The final rule was published in the Federal Register on September 30, 2016.

49.

Generally, the phrase three letter agencies is used to refer to components of the intelligence community, which have three-letter acronyms. Examples include the CIA (Central Intelligence Agency), DIA (Defense Intelligence Agency), NGA (National Geospatial-Intelligence Agency), NRO (National Reconnaissance Office), and NSA (National Security Agency).

50.

Dun & Bradstreet, "D&B Intelligence Solutions," 2014, p. 4. Copy available from author. An undated, abridged version of this document is available at http://www.dnb.com/content/dam/english/dnb-solutions/risk-management/intelligence_solutions.pdf. Generally, the phrase three letter agencies is used to refer to components of the intelligence community, which have three-letter acronyms. Examples include the CIA (Central Intelligence Agency), DIA (Defense Intelligence Agency), NGA (National Geospatial-Intelligence Agency), NRO (National Reconnaissance Office), and NSA (National Security Agency).

51.

Ibid., p. 3; Dun & Bradstreet, "D&B Intelligence Solutions," 2014, p. 4.

52.

U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Unique Identification of Entities Receiving Federal Awards," 81 Federal Register 67736, September 30, 2016, at https://www.gpo.gov/fdsys/pkg/FR-2016-09-30/pdf/2016-23198.pdf.

53.

Ibid., p. 67738.

54.

U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Unique Identification of Entities Receiving Federal Awards," 80 Federal Register 72035-72036, November 18, 2015, at https://www.gpo.gov/fdsys/pkg/FR-2015-11-18/pdf/2015-29414.pdf.

55.

U.S. General Services Administration, "GSA Issues Request for Information for Entity Identification and Validation Services," February 13, 2017 (Update: May 2017), at https://interact.gsa.gov/blog/gsa-issues-request-information-entity-identification-and-validation-services.

56.

Ibid.

57.

Ibid.

58.

CAGE codes are also used for reasons other than those described in this report. For example, they are "used to support a variety of mechanized systems throughout the government and provide[ ] a standardized method of identifying a given facility at a specific location. The code may be used for a facility clearance, or a pre-award survey." U.S. General Services Administration, Federal Service Desk, "What is a CAGE Code? How are CAGE Codes assigned?" at https://www.fsd.gov/fsd-gov/answer.do?sysparm_number=KB0011119.

59.

The term offeror refers to a company, or other type of entity, that submits a bid or proposal in response to a solicitation issued by a federal agency. An offer is "a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to invitations for bids (sealed bidding) are offers called 'bids' or 'sealed bids'; responses to requests for proposals (negotiation) are offers called 'proposals'; however, responses to requests for quotations (simplified acquisition) are 'quotations,' not offers." 48 C.F.R. §2.101(b).

60.

U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Commercial and Government Entity Code," 79 Federal Register 31187 and 31191, May 30, 2014.

61.

48 C.F.R. §204.7202-1(b)(1).

62.

48 C.F.R. §4.1801(2).

63.

Ibid.

64.

48 C.F.R. §4.1800(a).

65.

U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Commercial and Government Entity Code," pp. 31187-31188.

66.

Ibid., p. 31189. The proposed rule, which was issued on April 18, 2013, is available at http://www.gpo.gov/fdsys/pkg/FR-2013-04-18/pdf/2013-09143.pdf.

67.

Ibid.

68.

U.S. General Services Administration, "Justification and Approval for Other Than Full and Open Competition Under the Authority of FAR 6.302-1," June 23, 2010, p. 3. To access this document, conduct a search for the solicitation (DG03-00-DB-IAE) on the Federal Business Opportunities website, then click on the link "Justification and Approval for Other Than Full and Open." Additional information about this contract may be found at the Federal Procurement Data System-Next Generation (FPDS-NG or FPDS) website, at https://www.fpds.gov. Enter the contract award number, GS00I10AAC0140, into the ezSearch function on the FPDS website.

69.

"CCR" is the acronym for Central Contractor Registration. CCR no longer exists. Its functions were subsumed by GSA's System for Award Management, at https://www.sam.gov, in 2012.

70.

U.S. General Services Administration, "Justification and Approval for Other Than Full and Open Competition Under the Authority of FAR 6.302-1," pp. 1-2. Boldface in original.

71.

Ibid., pp. 2-3. Boldface in original.

72.

A generic entity identifier applies to a category of vendors; it is "not specific to any individual or entity." 48 C.F.R. §4.601. The use of a generic entity identifier "does not supersede the requirements of either [solicitation] provision 52.204-6 or 52.204-7 ... for the contractor to have a unique entity identifier assigned." 48 C.F.R. §4.605(c)(2). Restated, if provision 52.204-6, or provision 52.204-7, applies, a contractor must have a unique entity identifier. However, if any of the circumstances in 48 C.F.R. §4.605(c)(2) apply, then a generic entity identifier is used when reporting contract awards. The final rule that removed references to DUNS and DUNS numbers from the FAR also removed the term generic DUNS number and replaced it with the term generic entity identifier. U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Unique Identification of Entities Receiving Federal Awards," p. 67738.

73.

48 C.F.R. §4.605(c)(2)(i), (ii), and (iii).

74.

48 C.F.R. §4.605(c)(2).

75.

U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Updates to Contract Reporting and Central Contractor Registration," p. 69715. This proposed rule, which was issued in 2012, predates the revision to the FAR that removed references to DUNS numbers. Nevertheless, the discussion of the pros and cons of using generic entity identifiers remains relevant.

76.

U.S. Department of Defense, U.S. General Services Administration, and National Aeronautics and Space Administration, "Federal Acquisition Regulation; Commercial and Government Entity Code," p. 31187; 48 C.F.R. §4.605(c)(2). Publication of the final rule cited here predates the revision to the FAR that removed references to DUNS numbers. Thus, the text mentions DUNS numbers but also includes a reference to unique entity identifiers.