DoD's $24.7M advertising contract with Campbell-Ewald Company awarded under full and open competition

Contract Overview

Contract Amount: $24,715,548 ($24.7M)

Contractor: Campbell-Ewald Company

Awarding Agency: Department of Defense

Start Date: 2012-05-21

End Date: 2013-05-19

Contract Duration: 363 days

Daily Burn Rate: $68.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OPTION PERIOD 3 - BASIC ADVERTISING

Place of Performance

Location: WARREN, MACOMB County, MICHIGAN, 48093

State: Michigan Government Spending

Plain-Language Summary

Department of Defense obligated $24.7 million to CAMPBELL-EWALD COMPANY for work described as: OPTION PERIOD 3 - BASIC ADVERTISING Key points: 1. Contract value represents a significant investment in advertising services for the Department of Defense. 2. The firm fixed-price contract type suggests predictable costs for the government. 3. Awarded in 2012, the contract has seen multiple option periods, indicating sustained need. 4. The North American Industry Classification System (NAICS) code 541810 points to specialized advertising agency services. 5. The contract's duration and option periods suggest a long-term relationship for advertising needs. 6. The absence of small business set-asides may limit opportunities for smaller firms in this specific award.

Value Assessment

Rating: fair

The total award amount of $24.7 million over its potential duration is substantial for advertising services. Benchmarking this against similar large-scale government advertising contracts is difficult without more granular data on the scope of services. However, the firm fixed-price nature provides cost certainty. The value proposition hinges on the effectiveness of the advertising campaigns executed, which is not directly quantifiable from the award data alone. Further analysis would require examining campaign performance metrics and comparing them to industry standards for similar objectives.

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 offers. The record shows 4 bids were received, suggesting a moderate level of competition for this significant advertising contract. While multiple bidders participated, the exact number of bids can sometimes be a limited indicator of true market competition, especially for specialized services like large-scale government advertising campaigns.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and service quality. The presence of multiple bidders suggests that the government likely received a range of proposals, potentially driving down costs compared to a sole-source or limited competition scenario.

Public Impact

The Department of Defense is the primary beneficiary, receiving advertising and marketing services. The contract supports the delivery of public information and recruitment campaigns for military services. The geographic impact is national, aiming to reach potential recruits and inform the public across the United States. The contract supports jobs within the advertising and marketing sector, specifically at Campbell-Ewald Company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency on specific campaign performance metrics makes it difficult to assess true value for money.
The significant contract value raises questions about potential for cost overruns if not managed tightly.
Limited data on the competitive landscape beyond the number of bids received.
The long duration of the contract could lead to vendor lock-in if not periodically re-evaluated.

Positive Signals

Awarded through full and open competition, suggesting a fair and accessible process.
Firm fixed-price contract type provides cost predictability for the government.
Multiple option periods indicate sustained government need and potential for long-term strategic partnership.
Campbell-Ewald Company's established presence suggests experience in handling large-scale government contracts.

Sector Analysis

The advertising industry is a dynamic sector encompassing a wide range of services from creative development to media buying. Government contracts for advertising are crucial for public outreach, recruitment, and information dissemination. This contract falls within the broader professional, scientific, and technical services sector, specifically advertising agencies (NAICS 541810). Comparable spending benchmarks would involve analyzing other large federal advertising contracts, such as those for public health campaigns or other military branch recruitment efforts, to gauge the scale and pricing of this award within the government market.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting goals for small businesses mandated in the award data. This means that opportunities for small businesses to directly participate in this specific contract are limited unless they are subcontractors to the prime contractor, Campbell-Ewald Company. The absence of set-asides in this particular award does not reflect the overall small business utilization across the Department of Defense, but it does indicate that this specific procurement was not designed to directly boost small business prime contracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Department of Defense contracting officials. Accountability measures are typically embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported concerning the contract's execution or performance.

Related Government Programs

Department of Defense Advertising and Public Affairs
Military Recruitment Advertising
Federal Government Marketing Services
General Services Administration (GSA) Advertising and Public Relations Schedules

Risk Flags

Potential for cost overruns if not managed tightly despite FFP.
Lack of detailed performance metrics makes value assessment difficult.
Limited visibility into the full competitive landscape beyond bid count.
Contract duration may lead to vendor lock-in concerns.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.7 million to CAMPBELL-EWALD COMPANY. OPTION PERIOD 3 - BASIC ADVERTISING

Who is the contractor on this award?

The obligated recipient is CAMPBELL-EWALD COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $24.7 million.

What is the period of performance?

Start: 2012-05-21. End: 2013-05-19.

What specific advertising services were included under this contract, and how were they measured for effectiveness?

The provided data does not detail the specific advertising services rendered beyond the general classification of 'Advertising Agencies.' These services could encompass strategy development, creative content production (e.g., video, print, digital ads), media planning and buying, market research, and campaign analysis. Effectiveness is typically measured through Key Performance Indicators (KPIs) defined in the contract's Statement of Work (SOW). Common KPIs for advertising contracts include reach, frequency, engagement rates, lead generation (e.g., website visits, inquiries), brand awareness metrics, and ultimately, recruitment numbers or public opinion shifts. Without access to the SOW and performance reports, a precise evaluation of effectiveness is not possible.

How does the $24.7 million total award value compare to other large federal advertising contracts?

The $24.7 million total award value for this Department of Defense contract is substantial, placing it among significant federal advertising procurements. For context, large-scale public health campaigns (e.g., anti-smoking, vaccination drives) or major military branch recruitment efforts often involve similar or larger contract values. For instance, contracts for national advertising campaigns by agencies like the Department of Health and Human Services or sustained recruitment efforts by the Army or Air Force can range from tens to hundreds of millions of dollars over their lifecycles. This DoD contract, awarded to Campbell-Ewald, appears to be in the upper tier of federal advertising spending, reflecting the scale of the agency's communication needs.

What is the track record of Campbell-Ewald Company with federal contracts, particularly within the Department of Defense?

Campbell-Ewald Company has a significant history of working with the federal government, including extensive experience with the Department of Defense. As indicated by this contract awarded in 2012 and potentially extended through option periods, they have been a long-term provider of advertising services. Their portfolio often includes major campaigns for military branches, focusing on recruitment and public relations. A review of federal procurement data would likely reveal numerous other awards to Campbell-Ewald for similar services across different agencies and defense components, underscoring their established presence and capability in serving government clients.

Given the firm fixed-price contract type, what are the primary risks associated with this award?

While a firm fixed-price (FFP) contract type is generally favorable for cost control, risks can still exist. For the government, the primary risk is that the contractor may cut corners on quality or scope to maintain profitability if costs escalate unexpectedly due to unforeseen market changes or execution challenges. Conversely, if the contractor significantly underestimates costs, they might seek to renegotiate or deliver subpar performance. For Campbell-Ewald, the risk lies in accurately estimating all costs associated with delivering the advertising services over the contract's duration. Unexpected increases in media costs, production expenses, or labor rates not accounted for in the initial bid could erode profit margins. Effective oversight is crucial to ensure the contractor meets all performance requirements despite the FFP structure.

How has federal spending on advertising agencies evolved, and where does this contract fit historically?

Federal spending on advertising agencies has historically been significant, particularly for agencies with large public outreach and recruitment mandates like the Department of Defense. Spending fluctuates based on national priorities, budget allocations, and the perceived need for public information campaigns. Contracts for advertising services, often categorized under NAICS code 541810, represent a consistent but variable portion of the federal services budget. This $24.7 million contract awarded in 2012 fits within a pattern of substantial, long-term engagements for major federal advertising needs. Historical data would show similar large-value contracts awarded to various agencies and defense branches over the years, reflecting the ongoing requirement for professional advertising support.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018908RZ039

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Interpublic Group of Companies Inc (UEI: 006985790)

Address: 30400 VAN DYKE AVE, WARREN, MI, 10

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $24,715,548

Exercised Options: $24,715,548

Current Obligation: $24,715,548

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018909DZ040

IDV Type: IDC

Timeline