Categories of Specified Businesses

The three categories of businesses we examined for this report are small  disadvantaged, minority-owned, and women-owned. This share of  advertising contract obligations going to these businesses over fiscal  years 2013 through 2017 was consistent with the share of total federal  contracting obligations going to these businesses (also on average 13  percent over this period). Federal advertising contract obligations to all three categories of specified  businesses generally increased between fiscal years 2013 and 2017,  although some years showed decreases. Over Half of Federal Advertising Contract Obligations to Minority- Owned Businesses Went to Those Owned by Hispanic-Americans

Among the different types of minority-owned businesses, those classified  as being owned by Hispanic-Americans received the most obligations  (just over half) from federal advertising contracts over fiscal years 2013  through 2017. DOD, DHS, and HHS Directed the Most Advertising Contract Obligations to Specified Businesses, though Other Agencies Directed Greater Percentages of These Obligations to the Businesses

		DOD, DHS, and HHS Were Responsible for Nearly Three-Fourths of Federal Advertising Obligations to Specified Businesses

The departments of Defense (DOD), Homeland Security (DHS), and  Health and Human Service (HHS) were responsible for 73 percent of the  $570 million of federal advertising contract obligations that went to  specified businesses over fiscal years 2013 through 2017. Much of the increase in these obligations from year to year is associated  with increases in obligations by DOD, DHS, and HHS. Together they obligated about $3.4  billion for these types of contracts over the 5-year period, which  represents 79 percent of the federal government’s obligations. Additionally, the  National Aeronautics and Space Administration directed 98 percent of its  approximately $21 million in advertising contract obligations to these  businesses from 2013 through 2017. SBA provided technical comments, which we incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology

Our objectives were to identify and analyze (1) the amount federal  agencies have obligated on advertising contracts over the 5 most recent  fiscal years (2013 through 2017) and the amount going to small  disadvantaged businesses (SDB) and those owned by minorities and  women; and (2) the agencies that have directed the most advertising  contract obligations to these businesses and how this has changed over  time. To address both objectives, we analyzed data from the Federal  Procurement Data System-Next Generation (FPDS-NG) database for  fiscal years 2013 through 2017. Within the minority-owned business  category, we also analyzed the amounts of obligations going to  businesses owned by Asian-Pacific-, Subcontinent-Asian-, Black-,  Hispanic-, and Native-Americans, and “other minority” owned businesses.
Why GAO Did This Study

The federal government spends close to $1 billion annually for advertising activities that, among other things, inform the public about programs and services. The government seeks to provide procurement opportunities for these services to businesses such as SDBs and those owned by minorities and women. SDBs are those primarily owned by one or more socially and economically disadvantaged individuals.
GAO was asked to analyze federal advertising obligations to these types of businesses. This report discusses (1) the amount federal agencies have obligated towards advertising contracts over the most recent 5 fiscal years (2013 through 2017) and the amount going to SDBs and businesses owned by minorities and women; and (2) the agencies that have directed the most advertising contract obligations to these businesses and how this has changed over time.
GAO analyzed data on advertising contracts from the Federal Procurement Data System – Next Generation database for fiscal years 2013 through 2017. GAO also interviewed Small Business Administration officials.
The Small Business Administration provided technical comments on this report, which GAO incorporated as appropriate.

What GAO Found

Federal advertising contract obligations to small disadvantaged businesses (SDB) and businesses of all sizes owned by minorities and women (specified businesses) generally increased from fiscal years 2013 through 2017, and constituted 13 percent of all advertising obligations over this period. This figure is consistent with the percentage of all federal contract obligations to these businesses over this period. Overall, advertising contract obligations to all three categories of businesses increased between fiscal years 2013 and 2017, as shown in the figure below. Within the minority-owned business category, which includes businesses owned by Asian-Pacific-, Subcontinent-Asian-, Black-, Hispanic-, and Native-Americans, over half of the obligations went to those owned by Hispanic-Americans.
Three agencies—the departments of Defense (DOD), Health and Human Services, and Homeland Security—were responsible for nearly three-quarters of advertising contract obligations to the three categories of businesses from fiscal years 2013 through 2017. These agencies were associated with much of the increase in these obligations to specified businesses over the 5-year period. Although some agencies obligated higher shares of their advertising contract obligations to these businesses, they generally obligated fewer dollars than DOD and the two other agencies. For example, the National Aeronautics and Space Administration directed 98 percent of its obligations to these businesses, but the agency's total advertising contract obligations were $21 million over the 5-year period. DOD obligated $2.6 billion for these contracts over the same period.