This bill amends 31 U.S.C. 1105(a) by adding a new paragraph that requires executive agencies to report their expenditures on all contracts for advertising services, and specifically on contracts for the advertising services of socially and economically disadvantaged small business concerns (as defined in 8(a)(4) of the Small Business Act) and of women- and minority-owned businesses. The information collected covers both the prior fiscal year’s actual expenditures and the estimated expenditures for the fiscal year for which the budget is submitted.
The amendment applies beginning with fiscal year 2027 and continues in subsequent years.
At a Glance
What It Does
Adds a new paragraph to 31 U.S.C. 1105(a) requiring each executive agency to report advertising contract expenditures for the prior year and the upcoming budget year, including totals and breakdowns by SDVOBs and women- and minority-owned businesses (defined by 8(a)(4)).
Who It Affects
Executive-branch agencies that issue advertising contracts, their procurement and budget offices, and the advertising contractors that fall into the targeted groups (SDVOBs, women-owned, and minority-owned firms).
Why It Matters
It increases transparency of federal advertising spending and creates a data baseline to assess equity in contracting across demographic groups, potentially informing policy and oversight.
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What This Bill Actually Does
The bill revises the reporting framework for federal advertising expenditures by inserting a new requirement into the annual report that executive agencies submit under 31 U.S.C. 1105(a). Agencies must disclose, for each reporting period, the total expenditures on all advertising contracts and the subset of those expenditures that involve advertising services performed by socially and economically disadvantaged small business concerns (as defined in 8(a)(4) of the Small Business Act) and by women- and minority-owned businesses.
In practical terms, agencies will need to compile two layers of data: (1) actual expenditures from the previous fiscal year, and (2) estimated expenditures for the fiscal year for which the budget is being prepared.
The required categories for advertising expenditures rely on definitions tied to the Small Business Act’s 8(a)(4) program, ensuring consistency in who is counted as disadvantaged or woman- or minority-owned. By including both overall advertising contracts and those awarded to targeted groups, the bill aims to illuminate how federal ad spending is distributed across different business communities and to facilitate accountability and potential policy adjustments based on that distribution.The reporting obligation is prospective, applying to fiscal year 2027 and each year thereafter, which means agencies will need to implement or adapt data collection and classification procedures now to prepare for the first full-year report under the amended statute.
The measure does not create new procurement rules beyond reporting, but it does impose data-collection and reporting responsibilities that can affect budgeting and compliance workflows across the executive branch.
The Five Things You Need to Know
The bill adds a new paragraph (40) to 31 U.S.C. 1105(a) requiring reporting of advertising contract expenditures by each executive agency.
For each agency, the report must include expenditures for all advertising contracts and for the advertising services of SDVOBs and of women- and minority-owned businesses (as defined in 8(a)(4)).
The report must cover actual expenditures for the prior fiscal year and estimated expenditures for the budget year under consideration.
The amendment applies starting with fiscal year 2027 and continues annually thereafter.
Definitions for the targeted contractor categories rely on the 8(a)(4) provisions of the Small Business Act.
Section-by-Section Breakdown
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Short title
This section designates the act’s formal citation as the Federal Government Advertising Equity Accountability Act, enabling consistent reference in subsequent reporting and oversight.
Reporting on expenditures for contracts for advertising services
This section adds a new paragraph (40) to 31 U.S.C. 1105(a) requiring each executive agency to report two sets of expenditures: (A) annual spending on all advertising contracts, and (B) spending on the advertising services of socially and economically disadvantaged small business concerns (8(a)(4)) and of women- and minority-owned businesses. For each category, agencies must present both actual expenditures for the prior year and estimated expenditures for the budget year being submitted. The definitions for the targeted groups come from the Small Business Act’s 8(a)(4) provisions and feed into how contracts are classified in the report.
Application date
The amendment’s reporting requirement applies to the report submitted under section 1105(a) for fiscal year 2027 and each subsequent fiscal year, setting a clear starting point and ongoing cadence for data collection and disclosure.
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Who Benefits
- Chief financial and procurement officers in executive agencies, who gain clearer visibility into ad spend and contract categorization.
- Socially and economically disadvantaged small business concerns (including SDVOBs) and women- and minority-owned advertising firms, which stand to benefit from increased transparency and potential visibility in federal advertising opportunities.
- Oversight and audit bodies such as the GAO and inspectors general, which obtain robust data to assess equity and efficiency in federal procurement.
- Policy researchers and policymakers analyzing federal advertising practices and equity in contracting.
Who Bears the Cost
- Executive agencies will incur costs to collect, validate, and report advertising expenditure data, including potential system upgrades or process changes.
- Budget and accounting offices must integrate these new reporting requirements into existing annual submission workflows.
- Advertising contractors may face heightened scrutiny of their incumbents’ eligibility and classifications if their contracts involve targeted groups.
Key Issues
The Core Tension
The central tension is between expanding transparency in federal advertising spending to advance equity and imposing a new administrative and data-management burden on agencies, with the risk that inconsistent data collection could obscure real trends.
The bill’s transparency goal raises practical questions about data quality, consistency, and use. Agencies will need to harmonize classification of contracts across disparate systems and ensure that the 8(a)(4) and related definitions are applied consistently.
There is a risk that data gathered for reporting purposes could be misinterpreted without clear standards for how to compare totals across agencies with different contracting practices. Additionally, while the act focuses on reporting, the data could influence future policy or procurement decisions, so data quality and governance will be crucial.
Finally, the new requirements will add to compliance costs, particularly for agencies with large advertising portfolios or limited data infrastructure.
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