By Robert Brodsky
December 7, 2010After years of policy delays, regulatory reviews and technology overhauls, the public now can finally view data on subcontractors and subgrantees on USASpending.gov. Previously, spending data were required only for prime contractors and grant recipients.
In late November, subaward information on government contracts began to appear on the site for the first time, opening a new window to how the government spends hundreds of billions of taxpayer dollars.
And starting last week, USASpending.gov began displaying subaward information associated with government grants of more than $25,000. In just the first week, agencies reported 930 subgrant awards -- in areas such as health, food and nutrition, and transportation -- worth a total of $750 million, according to the Office of Management and Budget.
"We expect this number to increase significantly over time, but it represents a critical milestone in our efforts providing the public with unprecedented transparency into how and where tax dollars are spent," wrote OMB Director Jacob "Jack" Lew in a blog post on Monday.
The subcontracting data collection is being phased in slowly to minimize the burden on agencies and contractors, according to the Obama administration.
From July through September, newly awarded subcontracts had to be reported only if the prime contract amount was $20 million or more. For the period Oct. 1, 2010 to Feb. 28, 2011, the threshold for reporting new subcontract awards has been lowered to $550,000 or more. And beginning on March 1, 2011, all subcontracts for prime contracts of $25,000 or more must be publicly reported.
The rule will be required for all commercial item contracts and actions below the $100,000 simplified acquisition threshold that meet the $25,000 threshold. That requirement, however, does not apply to classified solicitations and contracts with individuals. Companies with less than $300,000 in annual revenue also are exempt.
The subgrant information is not subject to a phase in and will be applied immediately to all grants of $25,000 or more.
Government watchdog groups welcomed the release of the data. "This data will shine a light on the type and amount of work that is being handed off by prime contractors to subs," said Scott Amey, general counsel for the Project on Government Oversight. "In the past, subcontracting data was a mystery because the deals were between private companies. But now we'll get a glimpse at those activities, which might result in enhanced competition, better products or services, and better deals for taxpayers."
POGO, which has its own database on contractor misconduct, is considering adding a feature on subcontractors, Amey said.
Similar to the data reported by recipients of funds under the 2009 American Recovery and Restoration Act, the new contracts-and-grants rule applies only to first-tier subawardees. In other words, the public will be able to track the spending through two levels -- the prime recipient and the subrecipient. If the grant or contract funding is diverted to a second or third level of sub-awardees, that information will not be available.
The prime recipient of a grant or contract will be responsible for reporting data on its first-tier subawardees to the Federal Funding Accountability and Transparency Act Sub-Award Reporting System. Agencies then will post the data on USASpending.gov.
The prime recipient will have until the end of the month of the award, plus one additional month, to fulfill the reporting requirement. For example, if a subaward is made on Oct. 15, then the prime recipient has until Nov. 30 to report the subaward information.
Efforts to release the subaward information met with significant delays and administrative hiccups.
In September 2006, President George W. Bush signed the Federal Funding Accountability and Transparency Act, which created USASpending.gov, a public database on all prime contract awards of more than $25,000. The bill was co-sponsored by then-Sen. Barack Obama, D-Ill.
The Transparency Act required federal agencies to begin posting subcontracting awards by the start of 2009. The Bush administration conducted a brief pilot program to test the collection of some high-dollar subcontracting awards. But the government terminated the pilot on Jan. 1, 2009.
The plan was revived in April when Chief Performance Officer Jeffrey Zients issued a memorandum directing agencies to begin preparing to collect subaward information. The requirements of the data collection then were detailed in a July Federal Register notice.
Lew blamed the delays on the Bush administration and a burdensome administrative process.
"The prior administration made little headway on this issue, so the team at OMB already was running behind the schedule for implementation set by the … Transparency Act," Lew wrote. "In addition, they needed to change regulations and reporting guidance; develop, test and deploy a new IT solution to capture data; and undertake extensive outreach to contractors and grantees so that they would be ready for the change."
By Robert Brodsky
December 7, 2010