Third Annual DATA Act Summit: A critical tipping point reached, but big challenges remain to be solved in 2017


The DATA Act, the nation’s first open data law, hit two major milestones this May. Not only did it celebrate its two-year anniversary since being signed into law by President Obama on May 9th, 2014, but we are now seeing federal agencies, the White House, Congress, and the private sector embracing the law’s vision for government-wide spending transparency as a very real inevitability.

The Data Coalition’s third annual DATA Act Summit provided evidence of this critical tipping point. But the Summit also highlighted a number of challenges that must be solved in 2017 if the law’s full vision is to be ultimately realized.

On May 28th, over 450 attendees spent an entire day eagerly exploring the value of standardizing and publishing federal spending information as open data. The Summit’s conversations were technically informative, yet reached far beyond Washington, as #DATAActSummit trended nationally on Twitter throughout the day. Video of Summit sessions is now available.

So who’s paying attention? Who are the stakeholders? Judging by the Summit’s participants, everybody.

Nearly every federal agency showed up to learn about what the law requires and how internal managers can benefit. Technology companies exhibited their latest solutions to republish, analyze, and automate federal data, once the DATA Act’s standards are put in place. Transparency advocates were excited by the prospect of more accurate, more complete spending information. And grantees and contractors explored how the law can automate their compliance. It was a significant day.

Here’s what we learned.

  1. Why the DATA Act is historic

First, we got a long-term perspective on the law. Hudson Hollister, an early DATA Act co-author and Data Coalition founder, joined the Summit’s policy partners, the Association of Government Accountants (AGA) and the American Council for Technology and Industry Advisory Council (ACT-IAC), on stage to summarize why the law’s data standardization and publication provisions matter (see slide 7).

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Executive Director Hudson Hollister on stage addressing DATA Act Summit audience

In an attempt to respond to a number of differing information reporting requirements, our federal government has developed divergent systems. First, to track Congressional appropriations, the federal government built cash-based systems. Second, to comply with the CFO Act of 1990, which required private-sector-style financial statements and audits, agencies installed accrual-based systems. Finally, to respond to mandates like the Federal Funding Accountability and Transparency Act, which focuses on which grantees and contractors get taxpayers’ money, agencies built systems to track awards. The end result: three different kinds of systems, and no way to get a complete picture of federal spending.

The data standards established by the DATA Act – with the first complete structure announced by the Treasury Department in April – cut straight through these incompatible systems to provide a clear picture of how federal funds are handled and where they go.

If agencies follow the DATA Act and start submitting standardized spending data to the Treasury Department by the May 2017 deadline, the federal government will produce a single, unified open data set covering all spending – the most valuable open data set in the world.

  1. How open data visualizations have produced a DATA Act tipping point

If a unified open data set for federal spending is produced, what will it look like and how will we use it? At the DATA Act Summit, a member of Congress answered that question.

The first session of the Summit brought House Oversight Subcommittee on Government Operations Chairman Mark Meadows (R-NC) together on stage with Bryce Pippert, a principal at  Booz Allen Hamilton, to demonstrate a prototype software system built to visualize information made available by the DATA Act. Video of Meadows’ and Pipperts’ demo is now available.

Meadows and Pippert showed the audience how siloed spending data can finally be merged to give a 360-degree picture of agencies’ spending. With such tools, agency leadership and Congress will soon have the ability to track agency spending activity against budgets, drill down into specific programs to see where funds are going, and merge outside data sets to see how federal funding is impacting the economy at the local level. This is no longer an abstract notion – it’s what’s possible now, as soon as federal spending data sets are available.

(The system Meadows and Pippert demonstrated used a specially-built sample data set, not a real one, because official DATA Act reporting will not start until May 2017.)

DATA Act Summit – Final Program Slides

Screen shot from Booz Allen Hamilton’s DATA Act Solution

Meadows’ and Pipperts’ demo focused on how federal agencies and Congress will be able to use spending information, once it’s expressed as a unified data set. To show how the public will eventually access the information, Treasury DATA Act product manager Kaitlin Devine demonstrated Treasury’s open beta revamp of the government’s main public spendint transparency portal, USAspending.gov. Treasury is asking for the public’s input this summer to make this site as useful as possible, with Verision 2 of Openbeta.USASpending.gov being released shortly. As Devine exclaimed, “not everyone who cares about this data is inside the beltway!” Video of Devine’s presentation is available here.

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Screen shot of the Department of Treasury’s OpenBeta.USAspending.gov

As OMB Controller Dave Mader observed, “we will now have something that this country’s never had before” when the full federal spending data set is created. To those who have been closely involved with the law, these demonstrations confirmed that we are on the right track.

Visualizations provide a clear idea of the benefits the DATA Act can provide – to agencies, to Congress, and to the public. Visualizations can help motivate everyone to do the hard work of producing the standardized data set.

  1. What happens in 2017 will determine success

2017 will be the critical year for DATA Act implementation, for three reasons. First, the new Presidential administration might embrace the DATA Act or decide it’s not a priority. Second, as standardized DATA Act reporting begins in May 2017, Treasury and OMB must start deciding whether to retire the legacy reporting requirements that the DATA Act is supposed to replace. Third, the standardized spending data will only be valuable if it’s used alongside other data sets.

The DATA Act’s two main Congressional champions, Sen. Mark Warner (VA-D) and Congressman Darrell Issa (R-CA), came together for the first time in years to examine how their law is doing. (Video of the Warner/Issa reunion is now public.)

Both Warner and Issa expressed concern that the next President might let implementation drop and focus on other priorities. Issa explained what has to happen:

“The DATA Act may or may not be on the president’s agenda, but it is a tool that’s going to allow the next president to be successful. But only if somebody walks into the first briefing for each Cabinet officer and says, ‘we’re on our way toward being able to give you dramatically better information. Congress is behind it. It’s being funded. And it needs to be one of your highest priorities.’ ”

Otherwise, we may just default back to business as usual.

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Senator Mark Warner and Rep. Darrell Issa on stage at DATA Act Summit 2016

The second threat to the DATA Act’s success is a challenge shared by many good-government reforms. Will DATA Act reporting become the main method of reporting spending information – or will agencies see it as yet another compliance activity?

As Coalition executive director Hudson Hollister implored in his opening address, the DATA Act must replace, and not merely augment, legacy reporting requirements. Currently agencies report financial accounting and payment information to the Treasury, budgets to OMB, and procurement to the General Services Administration (GSA). If these outdated reporting systems continue to persist even after DATA Act reporting is underway, agencies might not invest enough effort into making sure DATA Act data is correct. In 2017, OMB and Treasury will need to plan the ultimate retirement of duplicative reporting.

Finally, in looking toward the possibilities to come, OMB’s Dave Mader struck a cord by asking if the law’s vision can be carried further: “Once we have the spending data out there…will we be able to bring other data sets together?” Assuming the law’s successful implementation, will the government and the public be ready to actually use the newly accessible information to discern patterns and make decisions?

The inspector general community seems ready. A panel of IGs detailed the many ways they analyze seemingly disparate data sets to root out fraud, waste, and abuse (see slides 57-72). The DATA Act will provide readily-standardized spending data that doesn’t require so much translation before being analyzed, making IGs’ analytics work much easier.

In fact, the Housing and Urban Development (HUD) Inspector General, David Montoya, ventured a bolder prediction: in the future the public will start to fulfill more of the government’s audit role as federal data becomes increasingly standardized and open. Standardization makes data ready for analysis by the government’s primary stakeholder: the public.

But we must remember that we also need leaders to seize upon these opportunities. Merely having access to better information isn’t going to produce better decisions. We need leaders to take ownership, set an example, and use data to make tough calls.

  1. Award spending transparency is at risk

In his plenary address, Hudson Hollister explained how the government’s continued use of the proprietary Data Universal Numbering System (DUNS Number) to identify grantees and contractors compromises the ability for spending data to be truly open. The federal government has long contracted with Dun & Bradstreet, Inc., to register contractors and grantees. Therefore a license is required to reuse information associated with the DUNS Number.

The proprietary nature of the DUNS Number prevents the public – and sometimes federal agencies – from freely downloading and analyzing federal award information. Unless the DUNS Number is retired, award data can’t be considered open data. (Video of the plenary address is available here.)

In a 2016 public comment letter, the Data Coalition laid out the case for why a transparent process for evaluating a new identifier solution is necessary. When questioned at the Summit, OMB promised to conduct a public alternatives analysis to evaluate alternate identification codes, such as the Legal Entity Identifier (LEI).

The DUNS Number isn’t the only challenge to the future transparency of award data.

To supplement the open data data agencies must report about contracts and grants, the DATA Act envisions that reports submitted by the contractors and grantees will eventually be transformed into open data too. If contractor and grantee reports are searchable alongside agency reports, the two categories of information can be checked against one another for quality.

To that end, the DATA Act mandates that OMB test standardized reporting by grantees and contractors (see Sec. 5 of the law).

Currently, OMB has established a pilot program at the U.S. Department of Health and Human Services (HHS) that is evaluating how to synthesize and standardize grantee reporting. With the design of the pilot up and running (see slides 39-53), the HHS DATA Act Program Manager Mike Peckham told the Summit audience that the race is on to implement the pilot’s test models. (Learn more at the HHS DATA Act website).

While the grantee-reporting testing is in motion, the Government Accountability Office (GAO) has told Congress that OMB has failed to set up a comparable pilot for contractor reporting (see page 21 of GAO’s recent report). As a bipartisan group of Senators recently wrote, OMB needs to run a matching contractor pilot in order to meet the law’s vision of synthesizing information reported by both grantees and contractors. And so far OMB is not following the law.

Unless the federal government moves away from the proprietary DUNS Number, and unless OMB sets up a contractor reporting pilot program to match the grantee reporting program, the future of award spending transparency is in jeopardy.

  1. To borrow the GAO’s favorite turn of phrase, “progress has been made; work remains to be done.”

Starting next year, the DATA Act is going to deliver the most valuable open data set in the world: the U.S. government’s spending, ready to be scrutinized by everybody. Agencies will use the data to manage themselves better; Congress will visualize patterns to make smarter decisions; the public will explore what’s happening to taxpayers’ money. The technology is already in place: a data structure that brings together appropriations, accounting, and awards, together with visualization platforms that make sense of it.

The whole project could fail next year – if the next President ignores it, if agencies view it as a duplicative compliance exercise, or if the data set doesn’t get early, enthusiastic use. And grant and contract spending faces special problems: the government must escape from the DUNS Number and create a contractor reporting pilot from nothing.

But in the projects and passion of our Summit participants, the vision Rep. Issa and Sen. Warner glimpsed when they introduced the DATA Act, five years ago today, is clearer than ever. Thanks to the support of our members, we will fight to make it real.

If you were unable to join you can browse photos from the day’s events here, the presentation slides here, and the videos here.