News Column

Data Blind Spot

April 2004, HISPANIC BUSINESS Magazine

Patricia Guadalupe

The federal government has no shortage of programs and initiatives for Hispanic outreach. Year after year, these programs show incremental progress in helping Hispanics gain access to jobs, contracting opportunities, and business financing

But unfortunately, federal agencies don't collect much data by ethnicity. They provide the numbers required by law, such as those on the 8(a) business development program, and the Hispanic hiring initiatives at the Office of Personnel Management, but generalized government-wide statistics offer little clue about obstacles to parity.

The latest numbers indicate uneven progress toward full parity. Despite increased spending in nearly every federal agency, Hispanics continue to lag in procurement. As a result, public policy discussions on Hispanics and procurement suffer from an information blind spot, relying on anecdotal evidence or analysis of specific programs.

Ethnic group Number of contractors % of new contractors
African American 742 8.01%
Asian & Pacific Islander 647 6.99%
Hispanic 636 6.87%
Native American 533 5.75%
Total 9,260 100%
Source: Federal Data Procurement Data System

The one major exception to the rule is the behemoth Department of Defense (DOD), which collects procurement data by ethnicity because of Section 1207 of the National Defense Authorization Act of 1987. That act established a goal of awarding 5 percent of contracts and subcontracts to small disadvantaged businesses with program performance tracking that included the collection of procurement data related to ethnicity. For FY2002, the DOD reported that 6.87 percent of its new contractors were Hispanic.

But the DOD, like all other federal agencies, collects only the contracting information required by law. At most agencies, the ethnicity of contracting firms is not "statutory information."

And even within programs designed to increase supplier diversity, those charged with implementing the policy take a broad view.

"My job is to provide opportunities for everyone [under our criteria], not for specific groups," says Tracy Pinson, director of the Army's Office of Small Disadvantaged Business Utilization. "It's good for us to have access to that information and data [by ethnicity], but it's not something that I specifically focus on."

Meanwhile, even at those agencies that do track such data, like the DOD, problems remain.

A recent report by the congressional General Accounting Office (GAO) found that while the Defense Department has achieved or exceeded its 5 percent goal of awarding contracts and subcontracts to small disadvantaged businesses every year since 1992, the mentor-protégé program's contributions cannot be fully determined. "DOD has not been able to attribute this success to the program," the report states.

The report attributed this lack to incomplete tracking of the contributions by small disadvantaged businesses that were protégés. Tracking the progress of former protégés was not established until FY2000, and it will take a year to gather and analyze the data.

But such tracking remains controversial. Even legislators who support gathering procurement data by ethnicity warn that it should not detract from what they consider the greater issue.

"I believe that collecting such data can be a helpful tool as long as it does not divert much-needed attention away from the real issue – the failure of the federal government to contract with minority-owned businesses overall," says Congresswoman Nydia Velázquez, ranking Democrat on the House Small Business Committee.

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