DATA Act Becomes Law, Increased Transparency on Federal Spending to Follow

On May 9, President Obama quietly signed the Digital Accountability and Transparency Act of 2014 (DATA Act) into law. Congress and open government advocates across the political spectrum worked for years to refine and pass the spending transparency legislation. The new law, if properly implemented, will be a big win for everyone.

Reps. Darrell Issa (R-CA) and Elijah Cummings (D-MD) first introduced the DATA Act in June 2011. Though it has had bipartisan support from the beginning and was introduced in both the House and Senate, the legislation was not as easy to move as expected. It took three years and several revisions to pass this important law.

When the Senate passed an amended DATA Act (S. 994) on April 10, it set the stage for the end game. The House, which had passed an earlier and somewhat broader version of the bill back in November 2013, moved quickly to pass the Senate version and send it to the president's desk. With the administration's long-standing emphasis on open government and spending transparency, there was little doubt the bill would be signed.

What the Law Does

The DATA Act is an important and overdue step to improve oversight of federal government spending. Specifically, the law will require public agencies to disclose more information about federal spending and improve the quality of the data. The new law also requires the Treasury Department to work with the Office of Management and Budget (OMB) to establish government-wide data standards for spending information within a year. These standards should ensure greater consistency of reported data and make the information more machine-readable. As a result, reporters, researchers, and public interest groups should be better able to use and manipulate massive quantities of spending data, analyze trends, and spot potential problems.

The new law also requires the administration to launch a two-year pilot on consolidated reporting by recipients of federal funds, including both contracts and grants. Currently, agencies use different forms to collect various types of information from those who receive federal contracts or grants. The pilot will test using a single reporting system across multiple agencies. The hope is that such reporting can be made easier and more consistent.

The Treasury Department will oversee a new data analytics center to facilitate officials' efforts to identify possible fraud or improper payments. The money saved from such improved internal tools should outweigh the investments in improving the data.

The law also prioritizes improvements in spending data quality. Agency Inspectors General must regularly audit a statistically relevant sample of their agency's spending data and report on the quality of that information. The Government Accountability Office (GAO) will report on overall data quality trends and performance across all agencies.


Issa noted the legislation is essential to foster more accountability in federal spending. After the president signed the legislation, Issa said, "Government-wide structured data requirements may sound like technical jargon, but the real impact of this legislation on our lives will be more open, more effective government."

Hudson Hollister, executive director of the Data Transparency Coalition, a collaboration of mostly private-sector technology companies and a few public interest advocates that has consistently pushed for increased transparency and easier-to-use public data, looked forward to the potential benefits of the DATA Act's implementation. He said, "The DATA Act will unlock a new public resource that innovators, watchdogs, and citizens can mine for valuable and unprecedented insight into federal spending. America's tech sector already has the tools to deliver reliable, standardized, open data. Today's historic victory will put our nation's open data pioneers to work for the common good."

Matt Rumsey of the Sunlight Foundation noted, "Successfully implementing the bill is key." Rumsey went on to note the importance of ongoing support from the White House for the DATA Act to succeed.


As with all laws, the success of the DATA Act will depend on the executive and legislative branches making the necessary resources available for its enforcement. If fully and properly implemented, the DATA Act should provide the information necessary for the public and decision makers to have more robust and accurate discussions about appropriate contracting and procurement costs and the investments needed to ensure future growth and opportunity for all Americans.

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