Democrats Call on Government to Increase Minority Advertising Contracts

Today, leading Senate and House Democrats urged federal agencies to take an active role in increasing the amount of federal advertising contracts awarded to disadvantaged and minority-owned businesses. Their action comes in response to a report by the Government Accountability Office [GAO], to be released today, concluding that federal agencies are falling short of the standards set by an executive order [E.O. 13170], issued in 2000, calling on the government to “aggressively” reach out to minority and underserved firms.

Senate Majority Leader Harry Reid [D-Nev.], Small Business and Entrepreneurship Committee Chairman John Kerry [D-Mass.], senior Senate Judiciary Committee member Chuck Schumer [D-N.Y.], and Congressional Black Caucus Chair, Rep. Carolyn Kilpatrick [D-Mich., pictured] today sent letters to the Departments of Defense and the Treasury expressing concern for their poor record of awarding contracts to minority and disadvantaged businesses. They also asked the agencies to outline specific steps they are taking to increase contracts with minority advertising firms.

The Defense Department awarded minority advertising firms only 1.8 percent of contract dollars and paid them, on average, nearly 84 percent less per contract than majority firms. The Treasury Department awarded minority advertising firms only 1.9 percent of contract dollars and paid them, on average, nearly 47 percent less per contract than majority firms.

The GAO also reviewed the records of three other agencies, which all spent more advertising dollars with minority firms: Health and Human Services Department [24.6 percent], Interior Department [6.4 percent], and NASA [88.9 percent].

“I am deeply concerned that the Departments of Defense and Treasury are denying minority advertising firms the opportunity to work with the federal government,” said Sen. Reid. “That they may even be discouraging hiring minority firms and paying them nearly 84 percent less than majority firms is even more disturbing. We will continue to aggressively monitor these and other federal agencies to make sure that our government meets our own standards of contracting with minority firms.”

“This report shines a spotlight on the federal government’s failure to make equal opportunity a reality, not just rhetoric,” Sen. Kerry noted. “The Defense and Treasury Departments are woefully behind the curve. Awarding less than two percent of advertising contract dollars to minority-owned and disadvantaged firms is unacceptable, and this report must be a wake-up call. My committee will keep up the pressure and stay on top of this until these agencies drastically improve their contracting practices.”

“The federal government is supposed to be doing everything it can to help minority businesses, yet the Departments of Defense and the Treasury are penny-pinching and falling far short of federal goals,” said Sen. Schumer. “These standards were established to foster minority business growth and to make sure that federal advertising is crafted by a diverse community of talented entrepreneurs. These departments need to do an about-face and take whatever steps are necessary to ensure that minority-owned advertising businesses are getting the fair shake that they need and deserve.”

“Despite an executive order, federal agencies are not providing minority business owners -- who pay taxes, provide jobs, and help strengthen our economy -- with equal opportunities in the federal contracting process,” declared Congresswoman Kirkpatrick. “Failure to promote inclusion and fairness in contracting is not only an egregious disservice to America’s families, but it is also a mockery of the promise upon which our country was founded.

“We must continue to advocate for the underserved and underrepresented, and encourage our government to lead by example. Diversity is America’s strength. By expanding access, we improve our ability to compete in the global marketplace, ensure that all people have the chance to achieve their potential, and enhance efforts to build a united America.”

The report, which was requested by Sens. Reid, Kerry and Schumer, will be released by GAO sometime today.

Sources: Federal Register, U.S. Senate Committee on Small Business and Entrepreneurship
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