July 21, 2006

Study on Minority Advertising to Determine Equality on Federal Outreach for Minorities

Despite an executive order and a bill enacted into law by Congress designed to aggressively take steps to direct resources towards minority owned media, historically the federal government has not allocated a proportionally fair amount of resources to promote federal programs directed towards minorities in minority owned and minority consumed media. A study on minority advertising requested of the General Accounting Office (GAO) would determine the effectiveness of the current administration in addressing this issue.

Executive Order 13170, signed in October 2000, directs federal agencies to expand all contracting opportunities for small disadvantaged businesses and minority business enterprises

Three years later, in a congressional hearing that took place January 7th, 2003, Congress recognized that “minority business concerns are of vital importance to job growth and the economic strength of the United States but have faced historic exclusion and underutilization in Federal advertising procurement”.

Thereby, Congress enacted into law resolution H.R. 132 which states that “all departments and agencies within the executive branch with procurement authority should take all necessary steps, as permitted by law, to increase contracting for Federal advertising between the Federal Government and minority business concerns”

This piece of legislation had little effect since the GAO, which is the administrative agency in charge of keeping all the records regarding federal spending did not know how much money was being spent in minority owned media outlets.

The NAHP pursued this issue vigorously, but no legislator seemed to push for a thorough study by the GAO regarding how much money was being spent in minority owned media outlets.

Finally, on May 16th 2006, Senator Kerry requested the GAO a study on Minority Advertising Contracts in an effort to ensure minority firms are getting their fair share of federal advertising contracts.

Unfortunately for minority owned media businesses, the GAO reply to the request was that it would take years to determine the how much money every single federal agency had spent in media and in minority media. So, the GAO agreed to conduct the study in only key federal agencies. The study is expected to be completed by late 2006.

Leaders of the Hispanic media consider this study on minority advertising a step towards equality but insist that there is still much to be done. “We will continue to push for equality. The Hispanic community of this country deserves it,” said Eddie Escobedo, Chair of the board of Directors of the National Hispanic Press Foundation (NAHPF).

”The federal government should lead, not trail, corporate America in the effort to include minority media outlets and advertising agencies,” said Lupita Colmenero, President of the board of Directors of NAHP.

It is not the first time that minorities fight for equality in the federal advertising. Congresswoman Carolyn Kilpatrick, form Michigan, has also expressed her disappointment with the federal government’s advertising track record back in the Clinton administration.

“The federal government has not directly contracted with a minority-owned agency, even for campaigns for issues that affect minorities disproportionately”, she said back then.

The GAO, acting on a request from Congresswoman Kilpatrick and Congressman Robert Menendez, released a report in 2000 detailing the federal government’s poor record of compliance with federal policy favoring the use of minority-owned and small businesses in the placement of federal advertising campaigns.

The report, commissioned by Kilpatrick and Menendez in 1999, showed that total federal advertising contract obligations increased from $139 million in fiscal year 1994 to $368 million in fiscal year 1998. During the same time, obligations to small disadvantaged businesses peaked at $3 million or 3.1% of obligations in fiscal year 1995, and declined to 1.2 million or 0.3% in fiscal year 1998, with 66% going to women-owned businesses. In 1998, some 91 percent of the total federal advertising budget was allocated to large agencies, none of which are owned by women or minorities.

“We are waiting for the GAO office to release the new study on minority advertising now in 2006, so that we can compare the numbers with the ones released on 2000 and determine whether or not we are making real progress on this issue,” said Eddie Escobedo.

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