DATA Act: Open for Business?

by Stephanie Meloni, Senior Analyst

On April 10, 2014, the Senate (unanimously!) passed the Digital Accountability and Transparency Act (DATA Act). The bill would require the government to standardize and publish financial management, procurement, and related data in electronic formats that can be easily accessed by the public. Open data will give our industry new insights into federal spending, and potentially new business opportunities. The House is expected to vote on the bill later this month, where it is expected to pass quickly.

The DATA Act will be the most powerful transparency mandate since the passage of the Freedom of Information Act in 1966. The goal of the bill is to publish the executive branch’s entire spending portfolio as standardized open data.  The DATA Act will be used to provide visibility into wasteful spending and duplicative programs.

Expect implementation of the law to be slow.

One of the requirements agencies will need to comply with will be adoption of a common data standard and reporting format, which is something that does not currently exist. Contractors will have the new requirement to report subcontractor award data in addition to the current requirement of prime award information. The government will need to figure out how the new information will be reported – a new process could certainly cause headaches as changes occur. Currently, only award information for contracts over $25K are required to be reported; the new bill would require posting of “checkbook-level payments” and the payments will need to be linked to the appropriate program, grant, or contract. (Classified information will be continue to be exempted.)

The Department of the Treasury and the White House’s Office of Management and Budget will share joint control over the challenging task of plan implementation, and one of their first responsibilities will be to work with stakeholders and policymakers to set government-wide, comprehensive data standards for reporting. We may not see full enactment of the law for about four years after the DATA Act is passed. Treasury and the White House will have one year to issue the data standards, and then government agencies will have two years to adopt the standards. The last step in policy compliance will be for USASpending.gov to publish the information.

Passage and implementation of the DATA Act will allow the Market Intelligence team at immixGroup to provide clients with more comprehensive research.  The better quality and common format of the data will make it possible to perform comparative analysis as well as to identify trends to uncover opportunities among agencies and programs. For IT companies, the DATA Act should provide opportunities in the areas of data and business intelligence analytics (including Big Data analytics), compliance tools, and automation and interoperability solutions.

Implementation of the DATA Act will be a complicated process as both agencies and government contractors adapt their processes and systems for compliance. We will be following the bill and yet-to-be-written rules closely as they are finalized and enacted. Here’s hoping deadlines don’t slip further – this is an important act that will be extremely useful for both government and industry as we navigate our current fiscal environment.