Many of us in a position to be asked do not look forward to the inevitable questions that run along the lines of “did Organization X ever get any federal money?” or “how much do the feds contract out in industry Z?” The problem is that there will seldom be a simple, client-pleasing answer like “oh yes, $52,453,000.75 in fiscal year 2006, according to this single, comprehensive, and authoritative government database.” We have to be familiar with a variety of sources, their fundamental strengths and weaknesses, and the ways in which we will have to qualify our answers.

One of the inherent challenges is to educate your client about what qualifies as “federal money.” There are federal contracts of all shapes and sizes, loans, grants, and other forms of assistance. What’s more, contracts result in subcontracts and grant money can pass through one recipient on it way to another and another; little of this sub-award activity is tracked centrally.

Several central federal databases for contracts and awards information exist, and they can be accessed free of charge, but none of them is perfect.

Federal Procurement Data System-Next Generation

The Federal Procurement Data System-Next Generation, or FPDS-NG, is the federal government’s primary database for recording contract awards. It is managed by the General Services Administration (GSA). You must register to use it, but it is free. Because FPDS-NG is the central government file on awarded contracts, many researchers need to consult it. However, FPDS-NG does not include information on all contracts. A few of the limitations:

• Many Department of Defense (DoD) contracts are not in the database. FPDS is starting to include DoD data, but the integration process is not complete. In addition, the DoD data is subject to a 90-day delay before it appears in the database. (Other agencies reports are available “near real-time,” according to FPDS documentation.) Classified information does not appear at all.
• Not all government entities are included in FPDS. The website provides a list of Agencies Submitting Data to FPDS-NG.
• Data in FPDS has been documented to be incomplete and inaccurate. Part of the problem is human error at the point of data input. (Many Government Accountability Office (GAO) reports have covered this problem. The September 2006 report Improvements Needed to the Federal Procurement Data System-Next Generation provides helpful background information.)
• Use of the system requires of bit of study and practice. As one FPDS help screen puts it: “Please note that the ideal users of the Ad Hoc Reports feature have both knowledge of the FPDS-NG data fields and understand how to use an advanced reporting tool.”

Federal Assistance Awards Data System

The Federal Assistance Awards Data System is the federal government’s central file for information on domestic assistance, the grants, loans, and other awards enumerated in the Catalog of Federal Domestic Assistance. FAADS is managed by the Census Bureau. FAADS is not technically a database, but rather a file of quarterly compilations reporting awards data. It is free and requires no registration. The Census Bureau provides a clear summary of some of the limitations of FAADS in its FAADS Users’ Guide “Systems Limitations” section. Some limitations to keep in mind when using FAADS:

• As stated in the Users’ Guide: “Reporting in FAADS is based on the geographic location of the initial recipient. This may be different from the location of the funded project and could also be different from the location of secondary recipients or the prime beneficiaries.”
• The only information directly retrievable is summary data. To get detailed information by recipient, you must download a zipped spreadsheet file.
• Reports from some agencies may not comply with FAADS standards. To its credit, the FAADS system provides an agency-by-agency compliance report. The current report is for the second quarter of fiscal year 2006.
• Beyond the agency compliance report provided by FAADS each quarter, the system—as with FPDS-NG—has been documented to have incomplete or inaccurate data due to the same uneven quality of agency reporting. Problems are described in detail the February 2006 GAO report Rural Economic Development: More Assurance Is Needed That Grant Funding Information Is Accurately Reported, pages 24-31.
• As with using FPDS-NG, the more you study the documentation and the more you know about federal funding mechanisms, the better. The Users’ Guide explains: “Funding amounts for loan guarantees, insurance, and other forms of contingent liabilities do not in all cases represent an actual flow of Federal funds. The user needs to understand the type of financial assistance (e.g., grant, cooperative agreement, direct loan) provided by a specific Federal award so that the amount of Federal funding reported is not misinterpreted.”

FAADS is one of the sources that feed into the Consolidated Federal Funds Report, or CFFR. According to the site, the CFFR reports on “federal expenditures or obligations for the following categories: grants, salaries and wages, procurement contracts, direct payments for individuals, other direct payments, direct loans, guaranteed or insured loans, and insurance.” The CFFR is useful for learning what types and levels of federal assistance go to specific geographic areas. However, you should approach CFFR data with the same level of caution used for the FPDS-NG and the FAADS.

New Resources: FederalSpending.gov and FedSpending.org

In 2006, political pressure resulting from increasing congressional use and public awareness of appropriations earmarks– allocations for specific pet projects–resulted in calls for greater transparency in federal spending. (The precise definition of “earmark” is unsettled. For background information, see the Harvard Law budget policy seminar briefing paper “Earmarks in the Federal Budget Process” and the Congressional Research Service (CRS) Memorandum “Earmarks in Appropriations Acts”.)

With “transparency” as the buzzword of the day, Congress passed the Federal Funding and Accountability Act (with enrollment corrections in S.Con.Res. 114) in September 2006. It became Public Law 109-282. The law is also referred to as FFATA or Coburn-Obama, after its Senate sponsors.

FFATA calls for the Office of Management and Budget to establish a single, public, free, searchable website tracking all federal grants, loans, and contracts. Will this be our salvation? The CRS report on the Federal Funding and Accountability Act provides excellent background information on the legislation and on the challenges facing developers of the proposed system. The system will be drawing data from FPDS and FAADS, those same systems documented to have data that is incomplete and of uneven quality. Better training for agency staff, better systems, and increased scrutiny, however, could bring improvements to data quality.

OMB met its first mandated FFATA deadline by launching the FederalSpending.gov website in February 2007. The site does not carry any data yet; it only serves as a collection point for citizen input on the future system. The implementation schedule calls for launch of the database by January 1, 2008, and the addition of sub-award data by January 1, 2009. Because sub-award data has not previously been tracked centrally by the federal government, FFATA calls for a pilot program to allow federal agencies time to develop a system for subgrants and subcontracts.

What about earmarks? Controversy over appropriations earmarks was the catapult for FFATA, but the FFATA legislation does not describe a mechanism for tracking earmarks. Instead, OMB has released a separate public website on earmarks.

Shortly after FFATA became law, the public interest group OMB Watch launched its own version of what the FFATA system could look like, calling it FedSpending.org. FedSpending.org depends on the same central databases provided by the federal government, FAADS and FPDS (via Eagle Eye Publishers), but it is much easier to use than the government systems. As an added benefit, the procurement data that OMB Watch obtained via Eagle Eye is supplemented with DoD data to compensate for DoD information not yet incorporated into FPDS-NG. In February, OMB Watch released an API to allow other developers to use its FedSpending.org data. For an explanation of the differences between FedSpending.org and the proposed FederalSpending.gov, see the OMB Watch screencast on the topic.

The OMB Watch database is a great site for now, while we wait for the development of the FFATA database. Can OMB provide us with that single, authoritative, flexible-but-easy-to-use federal spending database that we desire? In his column “Of Silk Purses and Sows’ Earmarks”, the Brookings Institution’s Andrew Reamer provides a reality check but holds out a bit of hope:

Senator Coburn is determined to hold OMB’s feet to the fire in public hearings. Senator Obama believes that the web-enabled, vocal right-left political constituency that fought for the bill will howl if the web site’s incomplete or inaccurate, and the FAADS/FPDS systems have not had a whistle-blowing constituency like that before…If Obama and Coburn are correct, they’ll have an audience that won’t be shy about keeping the pressure on.