The five  agencies’ focus on ongoing efforts was consistent with SBA’s and OMB’s  views that several provisions of the order duplicated program  requirements under existing legislation. Specific to advertising, Treasury  officials indicated that the agency was building on existing relationships  with trade associations in order to identify advertising contracting for  SDBs. Some Agencies Planned New Activities to Direct Federal Advertising Contracts to 8(a)s, SDBs, or Minority-Owned Businesses

Although agency officials at all five agencies indicated that their current  small business programs broadly addressed procuring services from 8(a)s,  SDBs, and minority-owned businesses, including advertising-related  services, three of the five agencies we reviewed—HHS, Treasury, and  Interior—planned new activities to increase federal advertising  contracting opportunities for these businesses. Advertising Obligations and Contract Actions Awarded to 8(a), Small Disadvantaged, and Minority-Owned Businesses Varied across Agencies

Overall, from fiscal years 2001 through 2005, 8(a), small disadvantaged,  and minority-owned businesses received about 5 percent of the $4.3 billion  in advertising-related obligations awarded by DOD, Interior, HHS,  Treasury, and NASA. These businesses accounted for 12 percent of the  contract actions that the five agencies awarded, but the percentages the  agencies awarded varied substantially. For example, Treasury awarded  less than 2 percent of its advertising-related dollars to 8(a)s, SDBs, and  minority-owned businesses over the 5-year period, while HHS awarded  about 25 percent to these business types. Advertising dollars also varied  from one year to the next at individual agencies, sometimes significantly,  primarily because of large advertising campaigns that the respective  agencies undertook to publicize new programs or promote their mission  (e.g., public health). The extent to which agencies’ yearly increases in  overall advertising obligations affected obligations to 8(a), small  disadvantaged, and minority-owned firms also varied. Appendix I: Scope and Methodology

In this report, we describe (1) strategies that the Departments of Defense  (DOD), Interior, Health and Human Services (HHS), Treasury, and  National Aeronautics and Space Administration (NASA) used to address  section 4 of Executive Order 13170, and (2) the total obligations, the  number of contract actions, and the percentage of total obligations  represented by these contract actions that each of the five agencies  awarded to businesses in the Small Business Administration’s (SBA) 8(a)  and federal small disadvantaged business (SDB) programs and to minority- owned businesses for advertising-related services.
Why GAO Did This Study

In 2005, federal spending on advertising exceeded $1 billion. Five agencies--DOD, Treasury, HHS, Interior, and NASA--together made up over 90 percent of this spending from 2001 to 2005. Executive Order 13170, signed in October 2000, directs agencies to take an aggressive role in ensuring substantial participation in federal advertising contracts by businesses in the Small Business Administration's (SBA) 8(a) and small disadvantaged business (SDB) programs and minority-owned businesses. This report describes (1) strategies DOD, HHS, Treasury, Interior, and NASA used to address Executive Order 13170, and (2) the total obligations, number of contract actions, and percentage of total obligations represented by these actions that each agency awarded to 8(a)s, SDBs, and minority-owned businesses for advertising services. In conducting this study, GAO analyzed agency contracting data and executive order implementation plans and interviewed agency procurement officials.

What GAO Found

Because much of Executive Order 13170 was consistent with existing legislation, the five agencies we reviewed generally addressed the order's emphasis on advertising contracts by continuing existing programs designed to identify potential contracting opportunities with all types of small businesses. The five agencies' focus on ongoing efforts was consistent with SBA's and the Office of Management and Budget's (OMB) views that several provisions of the order paralleled procurement program requirements under the Small Business Act. Three agencies--HHS, Treasury, and Interior--also planned additional activities that targeted the agency's contracting efforts for advertising services. For example, one of Treasury's additional activities was to work with trade associations to identify opportunities for SDBs in advertising. From fiscal years 2001 through 2005, 8(a), SDB, and minority-owned businesses received about 5 percent of the $4.3 billion in advertising-related obligations of DOD, Treasury, HHS, Interior, and NASA and 12 percent of the contract actions that these agencies awarded; the percentages varied substantially among each of the five agencies. For example, Treasury awarded less than 2 percent of its advertising-related dollars to 8(a)s, SDBs, and minority-owned businesses collectively over the 5-year period, while NASA awarded about 89 percent to these types of businesses. Overall advertising obligations also varied from one year to the next at individual agencies, sometimes significantly. Year-to-year increases were driven by large campaigns that the respective agencies undertook to publicize new programs or promote their mission (e.g., public health). Agencies varied in the extent to which year-to-year increases in overall advertising obligations had a similar effect on obligations to 8(a), small disadvantaged, and minority-owned firms.