A new report released this month has revealed that the federal government spent $14.9 billion on advertising contracts over the last 10 fiscal years to inform the public about various programs and services. However, despite the government’s mandate to provide contract opportunities to businesses owned by minorities, women, and other socially or economically disadvantaged groups, significant disparities persist.
The report found that contracts with those businesses represented about 14% of total federal advertising spending, amounting to $2.1 billion from fiscal years 2014 to 2023. Additionally, federal agencies allocated about $1.1 billion for COVID-related advertising contracts, with only 3.5%, or about $37 million, awarded to these disadvantaged businesses.
Additionally, the report does not specify the amount allocated to Black-owned media. Several previous reports suggest that Black-owned media received no more than $10 million of the total $14.9 billion spent.
In 2023, Congresswoman Eleanor Holmes Norton (D-D.C.) introduced a bill called the Federal Government Advertising Equity Accountability Act requiring federal agencies to detail their advertising spending with small, disadvantaged businesses and businesses owned by women and minorities in their annual budget justifications. Norton, along with Reps. Hank Johnson (D-Ga.), Barbara Lee (D-Calif.) and Val Demings (D-Fla.), co-led a letter to President Biden seeking answers about the inequity in federal advertising contracts awarded to minority- and women-owned media and advertising agencies compared to the rest of the industry.
A Government Accountability Office (GAO) study revealed that the federal government spent more than $5 billion on advertising over five years, with Black-owned businesses receiving only $51 million, or 1.02 percent of those funds. Black-owned newspapers and media companies received a small portion of the $51 million.
Jessica Lucas-Judy, director of Strategic Issues for GAO, clarified in an email to the Black Press: “Black American-owned businesses were awarded $256 million (21%) of the $1.2 billion in federal advertising contracts obligated to minority-owned businesses from FYs 2014 through 2023. When looking at the number of businesses, 148 Black-owned businesses were awarded advertising contracts during that time period. I double-checked with my team; the data from FPDS identified Black-owned businesses generally, rather than Black-owned newspapers/media outlets specifically. I think the only way to find the information you’re looking for would be to review each individual contract.”
The trend of underrepresentation in federal advertising contracts has been around for a while. In March 2016, Holmes Norton joined with the National Newspaper Publishers Association (NNPA) to call for a report on federal advertising contracts with minority-owned newspapers and media companies. The NNPA is the trade association of more than 250 African American-owned newspapers and media companies. The conglomerate comprises the 197-year-old Black Press of America.
Norton emphasized that the federal government, as the largest advertiser in the country, should ensure equal opportunities for news outlets and media companies owned by individuals of color, especially as African Americans and Hispanic Americans continue to grow in number in the United States.
“The federal government is the largest advertiser in the United States, and it has an obligation to ensure equitable access to its contracts for SDBs and businesses owned by minorities and women,” Norton stated. “The GAO’s findings demonstrate that there is still much progress to be made.”
In 2007, GAO had already investigated advertising spending by five agencies—the Departments of Defense, Treasury, Health and Human Services, the Interior, and NASA—and found that only 5% of the $4.3 billion available for advertising campaigns went to minority-owned businesses. Thirty-one members of Congress joined the call for accountability in the federal government’s advertising practices.
The latest GAO report, released June 27, 2024, highlighted those three agencies—the Departments of Defense, Health and Human Services (HHS), and Homeland Security—were responsible for more than half of advertising contract obligations to specified businesses from FYs 2014 through 2023, totaling about $1.3 billion. While these agencies obligated the most dollars to selected companies, other agencies had higher percentages of their obligations directed to these businesses. For instance, NASA allocated 99% of its advertising contract dollars to specified businesses, albeit a lower total dollar amount.
GAO officials reiterated the government’s requirement to provide procurement opportunities to small, disadvantaged businesses (SDBs) and businesses owned by minorities and women. “SDBs are businesses primarily owned by one or more socially and economically disadvantaged individuals,” GAO officials stated in the report.
Source: Washington Informer
