Interior Department awards $45.6M media buying contract to Ogilvy & Mather for advertising services

Contract Overview

Contract Amount: $45,674,842 ($45.7M)

Contractor: Ogilvy & Mather

Awarding Agency: Department of the Interior

Start Date: 2003-07-15

End Date: 2004-09-30

Contract Duration: 443 days

Daily Burn Rate: $103.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10019

State: New York Government Spending

Plain-Language Summary

Department of the Interior obligated $45.7 million to OGILVY & MATHER for work described as: Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of 443 days indicates a medium-term engagement for media services. 3. The cost-plus-fixed-fee pricing structure allows for flexibility but requires careful oversight. 4. Ogilvy & Mather, a large agency, is likely to have the capacity for this scale of work. 5. The specific NAICS code 541830 points to a focus on media buying services. 6. The contract was awarded in 2003, providing historical context for current spending.

Value Assessment

Rating: fair

The contract value of $45.6 million over approximately 14 months represents a significant investment in media buying. Without specific benchmarks for similar government media campaigns or detailed cost breakdowns, a precise value-for-money assessment is challenging. However, the cost-plus-fixed-fee structure necessitates diligent monitoring to ensure costs remain reasonable and the fixed fee is justified by the services rendered. Comparing this to private sector media buys of similar scope would offer further insight, but such data is not readily available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of two bids suggests a moderate level of competition for this specific contract. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially lower costs for the government. The agency's decision to proceed with two offers implies that the submitted proposals met the required criteria.

Taxpayer Impact: A competitive process, even with two bidders, generally benefits taxpayers by encouraging more favorable pricing and service offerings compared to sole-source or limited competition scenarios.

Public Impact

The primary beneficiaries are the various programs and initiatives within the Department of the Interior that require public awareness and outreach. The services delivered include media planning, placement, and potentially creative development for advertising campaigns. The geographic impact is likely nationwide, as the Department of the Interior's mission spans across the United States. Workforce implications may include support for internal communications teams and potential engagement with external creative agencies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not managed tightly.
The fixed fee amount is not disclosed, making it difficult to assess its reasonableness.
Limited competition (two bidders) may have resulted in a higher price than if more bids were received.

Positive Signals

Awarded through full and open competition, indicating a fair process.
Ogilvy & Mather is a well-established agency with significant experience in media buying.
The contract duration suggests a sustained effort in achieving campaign objectives.

Sector Analysis

The media buying industry is a critical component of the broader advertising and marketing sector. This contract falls under the 'Media Buying Agencies' category (NAICS 541830). The market for government advertising services is substantial, with agencies frequently seeking external expertise to reach diverse audiences effectively. Comparable spending benchmarks are difficult to establish without more specific details on campaign objectives and scope, but government contracts for advertising and public relations services represent a significant portion of federal marketing expenditures.

Small Business Impact

The provided data indicates that small business participation was not a stated requirement or outcome for this contract (ss: false, sb: false). There is no information on subcontracting plans or actual performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Ogilvy & Mather voluntarily engaged small business subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Interior responsible for the advertising campaigns. The cost-plus-fixed-fee structure necessitates regular reviews of incurred costs and the contractor's performance against the fixed fee. Transparency would be enhanced through contract award databases and reporting requirements, though detailed campaign performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Advertising and Public Relations Services
Department of the Interior Public Outreach Programs
Government Media Planning and Placement Contracts

Risk Flags

Cost-plus-fixed-fee contract type requires diligent oversight to manage costs.
Limited number of bidders (2) may indicate potential for higher pricing than a more competitive scenario.
Contract awarded in 2003, historical data may not reflect current market rates or agency needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $45.7 million to OGILVY & MATHER. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is OGILVY & MATHER.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $45.7 million.

What is the period of performance?

Start: 2003-07-15. End: 2004-09-30.

What was the specific scope of work and the key performance indicators for this media buying contract?

The provided data does not detail the specific scope of work or key performance indicators (KPIs) for this contract. However, as a media buying contract for the Department of the Interior, the scope likely encompassed strategic planning, media channel selection (e.g., television, radio, print, digital), negotiation of ad placements, and campaign execution to support various departmental initiatives. KPIs would typically include reach, frequency, cost per thousand (CPM), click-through rates (for digital), and potentially measures of public awareness or engagement related to the campaigns. The cost-plus-fixed-fee structure implies that the contractor was reimbursed for allowable costs plus a predetermined fixed fee for their services.

How does the $45.6 million contract value compare to other federal media buying contracts awarded around the same period?

Comparing the $45.6 million contract value requires access to historical federal procurement data for similar media buying services awarded between 2003 and 2004. Without direct comparative data, it's difficult to definitively state whether this value was high, low, or average. However, $45.6 million over approximately 14 months is a substantial sum, suggesting a large-scale, potentially national, advertising effort. Federal agencies often engage in significant media buys for public awareness campaigns, recruitment, and information dissemination, making such figures plausible within the context of large government contracts.

What is the track record of Ogilvy & Mather in handling federal government contracts, particularly in media buying?

Ogilvy & Mather is a globally recognized advertising and marketing firm with a long history of serving both commercial and government clients. While specific details on their federal contract history are not provided in the abbreviated data, large, established agencies like Ogilvy typically have experience managing complex government procurements. Their track record would likely include successful campaigns for various agencies, demonstrating their capability in strategic media planning, execution, and reporting. A deeper dive into federal procurement databases (like FPDS or SAM.gov) would reveal the full extent and nature of their past government engagements.

What were the primary objectives of the advertising campaigns funded by this contract?

The primary objectives of the advertising campaigns funded by this contract are not explicitly stated in the provided data. However, given that the contract is with the Department of the Interior, the campaigns likely aimed to support the department's mission, which includes managing America's natural resources and cultural heritage. Potential objectives could include promoting conservation efforts, informing the public about national parks and public lands, raising awareness about environmental issues, supporting land management policies, or recruiting personnel. The specific goals would dictate the media channels used and the messaging.

What risks are associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?

Cost Plus Fixed Fee (CPFF) contracts, while offering flexibility, carry inherent risks, especially for a contract valued at $45.6 million. The primary risk for the government is that the contractor may not be sufficiently incentivized to control costs, as all allowable costs are reimbursed. The fixed fee, while intended to provide contractor profit, needs careful negotiation to ensure it is reasonable for the scope of work. Potential risks include scope creep, where the contractor performs work beyond the original agreement without adequate adjustment to the fee or contract terms, and challenges in accurately estimating all necessary costs upfront. Robust oversight, detailed cost accounting, and clear performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

How did the 'full and open competition' process ensure fair pricing and selection for this contract?

The 'full and open competition' process is designed to ensure fair pricing and selection by allowing any interested and qualified source to submit a bid. This broad solicitation increases the pool of potential bidders, fostering a competitive environment where companies vie to offer the best value. For this contract, the agency received two bids, indicating that at least two entities found the opportunity attractive enough to invest resources in preparing a proposal. The evaluation criteria, outlined in the solicitation, would then be used to assess the technical merit and price of each bid, leading to the selection of the offer that best meets the government's needs. While two bidders represent competition, a larger number typically yields more competitive pricing.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Advertising, Public Relations, and Related Services › Media Buying Agencies

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 309 W 49TH ST FL 12, NEW YORK, NY, 90

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Timeline