Solving defense supply chain visibility through governed data sharing

When every tier of the defense supply chain can share governed data with the people who need it, the result is a real-time operating picture that connects cost evidence, supplier status, and production commitments to program and portfolio decisions. That picture does not exist today, but the technology to enable it does.

Why the DoW can't see what its supply chain actually costs

The Department of War (DoW) cannot see its own supply chain. More than a dozen executive orders and directives since 2020, culminating in the August 2026 Supplier Cost and Pricing Transparency memorandum, now mandate actual cost data, critical supply chain mapping at every tier, and continuous performance visibility across a base of more than 200,000 suppliers.

Today, that visibility does not exist. Cost and pricing evidence moves through manual data calls and fragmented spreadsheets. Lower-tier supplier origins are largely unknown. Major acquisition programs slip an average of 3 years, and DoW audits have identified over half a billion dollars in questioned costs on sole-source contracts where the government lacked cost data to negotiate fair prices.

The answer is not to wire into every contractor's ERP system. It is to agree on what gets published and automate the publication.

Databricks provides the platform to do exactly this, a federated data exchange where every contractor governs its own data in place and publishes only versioned, quality-checked evidence to named recipients under terms both sides accept. Databricks enforces governance, ownership, access controls, CUI markings, lineage, and audit logging, and its OpenSharing protocol moves governed data across organizational boundaries. No central repository holds anyone's raw records. No single vendor controls the pipe. The government gets the validated evidence it needs; contractors can keep their source systems closed.

How federated data sharing replaces manual data calls

Databricks already powers data intelligence for the Defense Industrial Base and DoW. The platform and open-source standards this solution requires are live production systems today. Adding a governed data product for cost, pricing, and supply chain evidence to the War Data Platform (WDP) is an extension of what's already running, not a new build. Three facts make this a near-term, low-risk move rather than a multi-year transformation bet:

• The standards are open and proven. The data formats and sharing protocols underpinning this exchange were created by Databricks and contributed to the open-source community. They run at scale across commercial and public-sector environments today. Built-in governance enforces access control, sensitive-data classification, data quality monitoring, and complete audit lineage. Because the underlying formats are fully open-source, recipients consume published evidence without needing to adopt Databricks, eliminating vendor lock-in.
• The on-ramp scales to every tier. Large primes use Databricks to build automated pipelines from source systems into governed data products. Small and mid-tier suppliers submit via validated intake forms that produce the same governed data contracts. No new accounting systems or special data formats are required. Suppliers report using the cost and pricing information they already keep.
• The reporting obligation already exists. CSDR reporting, FlexFile submissions, DD Form 1921 cost summaries, and CADE compliance workflows are already contractual requirements. The proposed model automates the publication of data contractors that are already required to produce, replacing redundant manual data calls with a single governed export per contract.
• The accounting shift is already underway. The Department is moving from government-unique Cost Accounting Standards to GAAP-based accounting, and fixed-price contracts are becoming the default. Both changes require reliable cost data drawn from contractors' existing books and records. The exchange is the mechanism that makes GAAP-based reporting practical at scale, turning data that contractors already maintain into governed evidence the government can act on.

What each stakeholder gets from the exchange

For the DoW, the exchange creates a real-time operating picture connecting cost evidence, supplier status, and production commitments to program and portfolio decisions. Acquisition leaders gain the continuous visibility that executive orders and multiple directives have demanded but that manual processes have never delivered.

For the Defense Industrial Base, the exchange replaces dozens of redundant data calls per program with a single publication path. Built-in access controls and CUI markings travel with the data, so contractors publish evidence once and know exactly who can see it and under what terms.

For the lower-tier supply base, the exchange provides a low-friction entry point. Small and mid-tier suppliers submit through validated intake forms that produce the same governed data contracts as large primes. No complex platform deployment or new accounting system is required. Contractual benefits offered by the government to a prime flow down through the supply chain, ensuring small manufacturers are not squeezed by upstream sole-source suppliers.

For the taxpayer, the exchange produces traceable cost and pricing evidence that allows the Department to negotiate from actual data rather than relying on historical price comparisons that can mask excess pricing.

Why centralized platforms and direct ERP connections fail at scale

The two most common counterproposals, direct ERP connectivity and a centralized proprietary platform, both fail at scale. Direct connections across 200,000 suppliers create an integration bottleneck and enlarge the attack surface. A central proprietary platform concentrates CUI into one high-value target and creates vendor lock-in. It also requires automated access to contractor systems, which no contractor will accept without express contractual authorization and applicable security protections. The federated model avoids this entirely: data shared through the exchange is used only for the pricing action for which it was requested. The federated model avoids both failure modes while keeping underlying protocols open-source.

How to launch a pilot exchange

The policy mandate is settled and reporting obligations exist. Databricks and its open-source standards are production-ready today. What remains is the decision to define the first two data contracts and launch a pilot.

The first step is straightforward: define two data contracts, one for cost and pricing and one for supplier and production status, and stand up a pilot exchange with a small number of primes on a single program. Progress should be measured in months, not years. To explore what that looks like on Databricks, contact our public sector team.

FAQ

How can the DoW get cost transparency across 200,000+ defense suppliers?
A federated data exchange lets each contractor publish validated cost and pricing evidence from existing books and records to named government recipients through open-source sharing protocols. No central repository holds raw records, no new accounting systems are required, and no automated access to contractor systems occurs without express contractual authorization.

What does the shift from CAS to GAAP mean for defense data sharing?
Moving from government-unique Cost Accounting Standards to GAAP-based accounting means contractors can report using the records they already keep. A governed data exchange automates this publication, replacing manual data calls with a single export per contract. No special data formats are required.

What is a federated data exchange for defense?
A federated data exchange lets each defense contractor govern and store its own data while publishing only versioned, quality-checked evidence to named government recipients through open-source sharing protocols.

Does this require contractors to adopt Databricks?
No. The underlying data formats and sharing protocols are fully open-source. Recipients consume published evidence using any compatible tool, eliminating vendor lock-in.

How does this affect small and mid-tier suppliers?
Small and mid-tier suppliers submit via validated intake forms that produce the same governed data contracts as large primes. No complex platform deployment is required. Contractual benefits offered to primes flow down through the supply chain.

How long does a pilot take to stand up?
The first milestone requires defining two data contracts (cost/pricing and supplier/production status) and onboarding a small number of primes on a single program. Progress should be measured in months, not years.