As Senators negotiate the DATA Act, here’s what we hope they’re thinking about…


UPDATE, August 3, 2013: As predicted below, at its July 31 business meeting the Senate HSGAC did not consider the DATA Act. However, Chairman Tom Carper and Ranking Member Tom Coburn agreed to continue working on a consensus draft and to consider that draft at the committee’s next business meeting, scheduled for September 2013.



The Senate Homeland Security and Governmental Affairs Committtee (HSGAC) has announced that it will consider the Digital Accountability and Transparency Act (DATA Act) during its business meeting tomorrow.
The DATA Act will transform federal spending from inaccessible documents into open data. Introduced last May in the House by Reps. Darrell Issa (R-CA) and Elijah Cummings (D-MD) and in the Senate by Sens. Mark Warner (D-VA) and Rob Portman (R-OH), it requires the Treasury Department to set government-wide data standards for the government’s financial, assistance, and procurement information, making the complicated maze of federal spending reports and databases fully searchable for the first time. The DATA Act also expands the current USASpending.gov portal. Today USASpending.gov only includes summaries of grants and contracts (and even those are woefully inaccurate). The DATA Act will expand USASpending.gov to include internal spending as well, and push it toward more granular detail.
Our Coalition supports the DATA Act because it’s good for democracy and good for business. Government-wide data standards for federal spending would allow tech companies to create new platforms to deliver actionable intelligence, deploy Big Data analytics to illuminate waste and fraud, and automate compliance to save money for grantees, contractors, and agencies. We demonstrated those technologies last May at the DATA Demo Day on Capitol Hill.
The HSGAC’s announcement doesn’t mean it will actually vote! Congressional committees often schedule bills for consideration in order to help motivate members and staffers to work on them, then postpone consideration until later, to give everyone time to agree on the same draft. Unanimous committee votes look better and take less time.
But the announcement does mean that the HSGAC’s leaders, Chairman Tom Carper and Ranking Member Tom Coburn, intend to bring the DATA Act through their committee. Sen. Carper wouldn’t put it on the calendar, even temporarily, unless he thought it had support. If a vote doesn’t happen tomorrow, it will happen soon – perhaps at the committee’s next business meeting in September.
As Sen. Carper, Sen. Coburn, the DATA Act’s sponsors, and their staffs iron out remaining differences, we hope they’ll reinforce the current bill’s strengths, fix its weaknesses, and plan for future action to handle the transparency challenges that the bill doesn’t reach.
What are those strengths, weaknesses, and out-of-scope challenges? These:
STRENGTHS
The current bill creates a strong foundation for data transparency in federal spending.
Government-wide data standards. The DATA Act is unequivocal. Treasury must set standards for all federal financial, assistance, and procurement data, and the standards apply to the whole executive branch.
Full life cycle of federal spending. The bill directs Treasury to set standards that electronically express each stage of federal spending – Congressional appropriation, budget allocation, obligation, disbursement, award, subaward. Each stage must then be electronically disclosed on USASpending.gov. This is a quantum leap beyond the current system, which only publishes awards, and only a summary of those, and usually inaccurate.
Mandatory application. The bill requires all executive branch agencies to incorporate Treasury’s data standards into their existing reporting processes. Previous federal efforts toward financial data standardization have been voluntary, which is why none of them have worked. As Comptroller General Gene Dodaro put it earlier this summer, “Without legislation … it won’t happen.”
Stakeholder consultation. The bill requires Treasury to consult public and private stakeholders as it sets data standards. This requirement will allow our agencies, grantees and contractors, and the reporting industry – including our Coalition – to have a role in the implementation of the DATA Act.
WEAKNESSES
The current bill could stand a little improvement.
Checkbook-level disclosure! There is no clear requirement for USASpending.gov to publish payment-by-payment detail. The bill does list Treasury’s payments system as one of the source systems for USASpending.gov – so one can argue, and our Coalition certainly does!, that the DATA Act will eventually result in the publication of each payment. Plus, Fiscal Assistant Secretary Dick Gregg has promised that Treasury intends to publish payments, someday, even without a legislative mandate.
But Congress should not pass up an opportunity to send a clear message: every payment, unless it’s classified or to an individual, should be published, available for scrutiny, and matched to agency, program, award, and recipient. State governments, New York City, and many other governments publish their payments. We should too. Taxpayers deserve granular detail.
Nonproprietary data standards! The bill requires Treasury to set two kinds of data standards: identifiers and markup languages. Treasury must select nonproprietary markup languages – not owned by any vendor – if possible. There is no parallel requirement for identifiers – and there should be.
Geospatial data on spending! The DATA Act could adjust current grant and contract reporting requirements to include the place of performance – which would allow citizens, watchdog groups, and federal managers to map the geographic impact of federal spending, using software like Esri’s. Without reliable place-of-performance data, current maps of federal spending look as though Washington is showering all its borrowed dollars on state capitals (which is where state agencies, which receive the bulk of federal grants, usually have their mailing addresses).
Recovery Board and Recovery Operations Center! The current bill transforms the Recovery Operations Center (ROC) – run by the Recovery Accountability and Transparency Board (Recovery Board) and originally developed to analyze data submitted by recipients of stimulus money – into a government-wide accountability portal for federal spending, to be used by inspectors general to illuminate waste, fraud, and abuse. The ROC is the only reliable government-wide spending accountability portal. Today, it only contains stimulus spending data (and, recently, data on Hurricane Sandy relief spending). Inspectors general using the ROC to find shady grantees and contractors have saved the federal government tens of millions of dollars, according to the Board’s status reports – far more than what the ROC costs to operate. So it’s a great idea to authorize the Recovery Board to unleash the ROC to analyze spending government-wide. In fact, it would be pretty silly not to do that, since we’ve already paid to set the ROC up and it’ll sit almost idle unless Congress expands its role.
But the current bill does not replace the provisions in the American Recovery and Reinvestment Act of 2009 (ARRA) that govern the Recovery Board. This leaves the Recovery Board and its ROC in an uncertain limbo, partially governed by ARRA, which was supposed to be temporary, and partially by DATA. Congress should confirm the roles of the Recovery Board and ROC, give the Recovery Board a new charter, and drop the word “Recovery” from its name.
Recipient reporting! The original 2011 DATA Act imposed a new recipient reporting requirement on all grantees and contractors, modeled after the stimulus-only reporting requirement that allowed the Recovery Board to oversee federal stimulus grants and contracts so effectively. To alleviate concerns from grantees and contractors about the costs of compliance, the current bill merely creates a pilot project, to be run by the Recovery Board, aimed at consolidating existing recipient reporting requirements. To make sure this pilot project succeeds, Congress should be as clear as possible about its intentions. Grantees and contractors, in the future, should be able to report to one entity – not dozens of separate agencies. Data standards should allow tech companies – including both the members of our Coalition and their competitors – to construct interfaces that handle the reports automatically. Congress should also exempt the project from the ill-named Paperwork Reduction Act.
Subaward reporting! Existing law requires grantees and contractors that award sub-grants and sub-contracts to report them to the Office of Management and Budget (OMB). OMB does not enforce this requirement. Unsurprisingly, most subawards go unreported. The current bill does not address this weakness in federal spending transparency. 
Data publication! The introduced version could direct USASpending.gov to follow current best practices in data publication. For instance, USASpending.gov should assigning persistent uniform resource locators for information related to a particular element, such as agency, program, award, or recipient.
Open Data Policy! The introduced version doesn’t mention President Obama’s Open Data Policy. The President’s goals for all federal data and the goals of the DATA Act are the same. The bill should say so.
BEYOND THE SCOPE
Even with improvements, the DATA Act won’t address every challenge to data transparency in federal spending – including these:
Legislative and Judicial Branches. The DATA Act is limited to executive branch spending; it doesn’t cover the (much smaller) legislative or judicial branches.
Coordination with financial regulators. The introduced version does not take advantage of the fact that Treasury’s separate Office of Financial Research is charged with setting data standards for all U.S. financial regulatory reporting. If Treasury’s Financial Management Service (FMS) – which likely will be assigned to do DATA Act work – and the OFR worked together toward interoperability between federal spending reporting and financial regulatory reporting, interesting synergies could result. Imagine being able to associate a particular company’s filings as a government contractor with its filings as a regulated entity – automatically.
GSA’s SAM. The bill leaves alone the General Services Administration’s flawed System for Awards Management (SAM), which has become a black hole for spending transparency (and IT procurement dollars).
WHAT’S NEXT
The DATA Act will be marked up by the Senate HSGAC tomorrow or in September. Since the House Oversight Committee has already passed the bill, the next step will be passage by both chambers of Congress. In the House, Majority Leader Eric Cantor has vowed to bring the bill through to passage. We believe it’ll pass the House unanimously – again. Senate leadership haven’t said anything about the DATA Act, but bipartisan support in the Senate HSGAC should carry a good deal of weight.
Want to know more – or get involved with the DATA Act’s passage and implementation?
On September 10th, our Coalition will host Data Transparency 2013, the first federal open data policy conference, at the Ronald Reagan Building in downtown DC. One of the focuses of Data Transparency 2013 will be opening up federal spending. The Congressional sponsors of the DATA Act and the executive branch officials poised to take charge of implementation will all speak. (In fact, Data Transparency 2013 will be the first time they’ll all be at the same event.)
Join us in September, meet the leaders in open data, and help transform federal spending from inaccessible documents into open data.