Unique Identification Codes for Federal Contractors: DUNS Numbers and CAGE Codes
Released: 2017-05-31T00:00:00

Introduction

Hundreds of thousands of businesses and other entities provide supplies, equipment, and services to federal agencies each year through procurement contracts (contracts). 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.

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, 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. 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.

Data Universal Numbering System

Created by Dun & Bradstreet in 1963, DUNS is "a unique global business identification system." The system includes DUNS numbers, which are "nine-digit non-indicative numbering sequence[s] and [are] assigned at the lowest organizational level." 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." That is, each business location that is a unique, separate, and distinct operation is assigned its own DUNS number. However, some entities have the same, or similar, names. 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.

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, and an entity must have a DUNS number in order to register in SAM. 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." A prospective government contractor may request a DUNS number through an online portal. 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.

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. 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. 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."

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). Subsequently, other purposes were added, such as using CAGE codes to identify vendors. 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. 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)." There is no cost for obtaining a CAGE code.

Brief Comparison of DUNS and the CAGE System

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

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. 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.

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.

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.

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.

GSA believes that, in effect, D&B has a monopoly, which stems from, at least in part, the regulatory requirement that companies and other entities seeking to do business with the federal government obtain a DUNS number. The lack of competition for an identification system has, according to GSA, led to higher costs. Dun & Bradstreet has placed proprietary restrictions on GSA's use of DUNS numbers, which limit "how and where Dun & Bradstreet data can be used." GSA's contract with Dun & Bradstreet contains other restrictions "that could cause challenges for the government if it were to change to an alternative numbering system." GSA has indicated that its contract with D&B "specifies that the government would have to delete certain Dun & Bradstreet provided data [e.g., business name and address] from its databases at the end of the GSA contract."

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. Eventually, GSA winnowed its options: continue to use D&B's DUNS numbers, or replace it with a government-owned numbering system. 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."

Anticipated benefits from replacing DUNS with a government-owned, nonproprietary system include "long-term cost savings, unlimited data rights, and greater transparency." 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:

"[C]hanging to a government-owned number would require GSA to establish a registration process and add the ability to provide corporate linkage information and add data verification and monitoring capabilities." "To accommodate a new number, GSA and other agencies would have to change the names of data fields and possibly add new data fields or modify the format of the existing DUNS field in their data systems. For example, DUNS numbers are numeric whereas SAM numbers are alpha-numeric and therefore may not be compatible with current DUNS data fields." "Changing numbering systems could require agencies to delete DUNS information, including contractor name and address, from their data systems and replace it with information from the new numbering system. This process could be complicated by the data restrictions in GSA's contract with Dun & Bradstreet." "GSA would have to modify the FAR to remove the DUNS requirement and agencies would have to update their FAR supplements. Agencies would also have to update acquisition-related policies, procedures, and documents that refer to DUNS numbers."

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."

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 entities receiving Federal awards [including contract awards] that can be consistently applied Government-wide." The Department of the Treasury and OMB have named this data element the awardee/recipient unique identifier .

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. 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-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. 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.

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, multiple intelligence task forces, and National Labs use D&B Solutions to monitor foreign and domestic businesses and supply chains." 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."

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.

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 . A unique entity identifier is "a number or other identifier used to identify a specific commercial, nonprofit, or government entity." 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.

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]." 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." 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.

New Requirement to Use CAGE Codes

Although DOD, and perhaps other agencies, have used CAGE codes for some time, 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 offeror 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." 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.

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." 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."

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

"Exchange data with another contracting activity, including contract administration activities and contract payment activities"; "Exchange data with another system that requires the unique identification of a contractor entity"; "Identify when offerors are owned or controlled by another entity."

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.

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.

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.

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. GSA listed the D&B software and data products required to meet its needs in the J&A.

Software

1. " Data Integration Toolkit (DITK) : The Data Integration Toolkit will allow the Government the ability for real-time access to integrate D&B global data into the IAE [GSA's Integrated Award Environment] applications and solutions described in this contract and allow the Government to build an interface with D&B, deliver data via the Internet." 2. " Data Integration Batch (DIB) : The Data Integration Batch will provide an automated infrastructure that electronically transmits files of customer records or transactions for correction and updating, and for matching and updating with the D&B Database. The same infrastructure is used to return matching results and appended information to the customer." 3. " Integration Manager (IM ): The Integration Manager is the onsite software system that will be used to integrate government business customer information from diverse systems using the D-U-N-S Number® and is designed to allow the Government the ability to harmonize its data across many systems." 4. " Toolkit Address Standardization (TAS ): The Data Integration Toolkit and Toolkit Address Standardization (TAS) Module will be used to accomplish the task of standardizing BV [business verification] data packet before presenting to a vendor during CCR registration." 5. " ValiCert : ValiCert Secure Transport (ST) Client is the secure download and upload manager to securely transport data within the DIB across systems." 6. " DITK Monitoring Module : The Monitoring Module will be used as an add-on function to the Data Integration Toolkit, to enable the monitoring of changes to the data within monitoring data packet products automatically." 7. " Bulk Data Exchange (BDE ): The Bulk Data Exchange will use file transfer protocol to transfer files for DIB processing to and from its Bulk Data Exchange (BDE) system."

Data Products

8. " Business Verification (BV) Packet: D&B's Data packet used to verify a DUNS Number and the associated business information about a business." 9. " BV Monitoring: Monitoring and notification of DUNS Numbers that have been retrieved or registered using the BV packet." 10. " WorldBase Marketing Plus with Linkage Packet: The Corporate Linkage data packet used to retrieve corporate linkage information as well as address information of headquarters, Domestic Ultimate Parent, and Global Ultimate Parent Linkage data." 11. " Family Tree Enhanced Linkage Packet: The Corporate Linkage packet that is utilized to create the linkage monitoring function in CCR." 12. " US Corporate Linkage Monitoring: Monitoring and notification of DUNS Numbers that have been retrieved or registered using the Family Tree Enhanced Linkage Packet." 13. " CCR Corporate Linkage File : Upward linkage file that is provided for all records that have been registered in CCR." 14. " Prior DUNS file : File of prior DUNS Numbers for records in CCR that (may have) had a prior DUNS Number." 15. " Executive Branch File: File of all linked locations of the Executive Branch, and their DUNS Numbers to be used in the FedReg [Federal Agency Registration] system." 16. " Legislative/ Judicial File: File of all legislative or judicial locations that have been registered in the FedReg System." 17. " IM Reference File: Append file used by IM to perform matching for the Government." 18. " IM Append File : Append file in IM to return additional data beyond matching to a DUNS Number." 19. " IM Linkage Webservice: Allows parent linkage data to be retrieved via the IM environment through a webservice call." 20. " American Recovery and Reinvestment Act (ARRA ) Reference F ile: File which resides behind federalreporting.gov and enables companies, who are not already registered in CCR, to look-up, retrieve, and register their DUNS Number at federalreporting.gov." 21. " ARRA Batch & Exception File: Batch file process for entities that are new to the D&B database that enables their data to be pulled from the most recent D&B dataset and provided to federalreporting.gov for registration purposes."

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. The various circumstances under which a generic entity identifier may be authorized are as follows:

Contracts valued at $30,000 or less awarded to a contractor that is A student; "A dependent of either a veteran, foreign service officer, or military member assigned outside the United States and its outlying areas (as defined in [FAR §] 2.101)"; or "Located outside the United States and its outlying areas and the contractor does not otherwise have a unique entity identifier." Contracts valued at more than $30,000 that are awarded to "individuals located outside the United States and its outlying areas for work to be performed outside the United States and its outlying areas." "[W]hen specific public identification of the contracted party could endanger the mission, contractor, or recipients of the acquired goods or services. The contracting officer must include a written determination in the contract file of a decision applicable to authority under [FAR §4.605(c)(2)(iii)]."

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

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."

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.