Legislation that would produce a searchable Internet database of federal contracts, grants and loans passed the Senate Thursday night, pleasing government oversight groups that believe it would prompt improvements to existing federal databases.

The 2006 Federal Funding Accountability and Transparency Act (S.2590) directs the Office of Management and Budget to ensure the operation of an online database accessible to the public at no cost.

Passage of the bill was delayed by holds from Sens. Ted Stevens, R-Alaska, and Robert Byrd, D-W.Va. They cited the need for more time to review the measure.

A similar bill co-sponsored by House Government Reform Committee Chairman Tom Davis, R-Va., and Rep. Roy Blunt, R-Mo., (H.R. 5060) passed the House on June 21, but that system would include only grant information, not contracts.

The Senate legislation calls for the database to host a Google-like search engine that would gather information from existing federal databases, including the Federal Procurement Data System, the Federal Assistance Award Data System and Grants.gov.

The Congressional Budget Office estimated that updating existing databases and adding a central search engine would cost about $4 million in fiscal 2007 and $5 million in fiscal 2008. Another $2 million in annual appropriations would be needed thereafter to cover maintenance costs.

According to government oversight organizations, the information available on the existing sites frequently is inaccurate and incomplete. In September 2005, the Government Accountability Office reported that an upgrade to the Federal Procurement Data System failed to improve data quality and user-friendliness.

"The current databases are woefully inaccurate," said Adam Hughes, director of federal fiscal policy for OMB Watch, a government watchdog group. "With the greater scrutiny from this new database, we're hoping that those [old] databases are improved."

Hughes said as public interest groups and journalists pore over information on contracts awarded to Halliburton and other major Defense Department contractors, the need for accurate information on the databases will increase.

"Nobody wants to be on a top 10 list [of poorly performing government contractors] so companies will apply pressure [to the agencies] to get the right data up there," Hughes said. "It's one thing to have access to the information but if the information stinks, it's no good."

Hughes said media outlets nationwide would likely use the database to report on federal contracts and grants awarded to local companies, and bloggers probably would use the data to draw attention to abuse of federal funds.

OMB Director Rob Portman praised the passage of the bill, saying, "Taxpayers benefit from having the necessary information to hold government accountable for results."

"OMB stands ready to work with federal agencies to establish a single, user-friendly Web site so the public can scrutinize how government is spending taxpayer dollars," Portman said.