Government increasingly outsources business intelligence work

More agencies are turning to third-party data brokers to mitigate risks

Dun and Bradstreet has been supplying business intelligence to the federal government for the past two and a half decades, but in the past five years, the government has dramatically increased its use of the company’s data. The Homeland Security Department and the intelligence community in particular rely on D&B information for risk mitigation.

Federal officials sometimes use the data simply to validate a company’s address, for example, said Chris Corrie, an assistant vice president of D&B’s federal sector business development group. But the database offers additional information, such as whether the business is active and operational, pays taxes, has a high credit risk, or is registered with the secretary of state.

Lauren Jones, director of consulting at the market research firm Input, said local, state and federal government agencies need accurate third-party business intelligence such as that supplied by D&B, LexisNexis and Hoover’s. Some federal agencies ask Input, which collects information about government contracts and the information technology market, for information about vendors and IT spending.

Michael Caskin, an assistant vice president of D&B’s federal sector business development group, said the company provides corroborating evidence about a particular business from trusted third-party documentary sources, such as the secretary of state or payment histories from other organizations.

“So if there’s an entity that’s a trusted part of your supply chain, and then D&B tells you that company has just filed bankruptcy and ceased operations, and yet they’re still actively engaged in your system, that might be a red flag,” Caskin said. “It’s those fundamental uses of the information that has high interest in DHS.”

Corrie said agencies use the data to identify bad or questionable companies and locate good ones. “If you’re looking for a needle in a haystack, we’re reducing that haystack immediately by eliminating the businesses that have a solid track record and are well-known to us,” he said.

D&B, which was founded in 1841 as the Mercantile Agency in New York City, has about 4,700 employees worldwide and generates $1.5 billion in revenue annually. It paid little attention to the government sector until the 2001 terrorist attacks. After that event, federal agencies wanted better business intelligence.

Since then, the number of people working in the company’s government solutions group has nearly tripled.

Although the majority of the group’s members focus on the federal government, some pursue state and local government opportunities, said Caskin, a 17-year D&B veteran.

In the past several years, the group’s business has grown 30 percent to 35 percent annually, Caskin said. Growth will continue at that rate for the next 18 months before leveling off to 7 percent to 9 percent, he said.

Corrie said two factors are contributing to the increased government business. “We clearly were underpenetrated in terms of the federal government understanding what we could bring to the game and offer,” he said.

Second, demands for data have increased in government and the overall market, leading to dramatic growth in the past few years. The company is responding to that development.

Corrie and Caskin said most federal agencies use D&B’s data to find out more about a business they’re dealing with. Government agencies integrate that data into their information systems, they said.

Jones couldn’t confirm whether government is using more commercial business data, but she said that is likely because the federal government has a greater need to validate companies’ identities and operations. The Small Business Administration, the General Services Administration and the Defense Department, for example, need business intelligence about companies before they can make loans or award contracts.

Agencies usually need the most current data. Caskin said D&B spends about $250 million a year to maintain a database with the latest information. The company updates its database 1.5 million times a day, he said.

D&B wants to expand its state and local business in the next five years. Caskin said first responders might be able to use the company’s data to assess daytime populations in certain businesses’ locations and gain information about critical infrastructure and assets.

Jones said the government should become more proactive about using commercial data. “It’s much better to save taxpayers money upfront by operating more efficient business practices than it is to recover funds or money after an abuse or an incident of fraud has taken place,” she said.

Dun and Bradstreet wants to track all companies

Dun and Bradstreet uses a Data Universal Numbering System (DUNS) to assign every business a unique nine-character identification number. That number stays with the company from cradle to grave.

D&B has assigned 105 million DUNS numbers globally, but only 45 million are active. Of those 45 million, 20 million are assigned to U.S. companies.

Michael Caskin, an assistant vice president at the company’s federal sector business development group, said federal agencies use the DUNS numbers to track businesses or correlate disparate records.

The company will most likely issue more DUNS numbers in the coming years. Caskin said the company wants to expand its coverage in South America, Asia, Africa and the Middle East through a global network of partners that assist in the data collection process.

“Our goal is to have 100 percent coverage of the globe for all business entities that are operating,” Caskin said. “We have a ways to go, but I think we’re getting there and making a lot of progress.”

— Dibya Sarkar

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