DoD's $3M contract for advertising services awarded to Campbell-Ewald Company shows potential for cost savings

Contract Overview

Contract Amount: $30,000,000 ($30.0M)

Contractor: Campbell-Ewald Company

Awarding Agency: Department of Defense

Start Date: 2008-09-09

End Date: 2009-11-19

Contract Duration: 436 days

Daily Burn Rate: $68.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OPTION PERIOD 3 - SPACE CHARGES & MEDIA PLACEMENT

Place of Performance

Location: MILLINGTON, SHELBY County, TENNESSEE, 38054

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $30.0 million to CAMPBELL-EWALD COMPANY for work described as: OPTION PERIOD 3 - SPACE CHARGES & MEDIA PLACEMENT Key points: 1. The contract's firm-fixed-price structure provides cost certainty for the government. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (436 days) allows for sustained advertising efforts. 4. The contract is for space charges and media placement, a core advertising function. 5. The small business set-aside flag is false, indicating no specific preference for small businesses. 6. The contract was awarded by the Department of the Navy, a major component of the DoD.

Value Assessment

Rating: fair

The contract value of $3 million over approximately 14 months for advertising services, including media placement, appears to be within a reasonable range for a federal agency. However, without specific details on the scope of services, target audiences, and media channels, a precise value-for-money assessment is challenging. Benchmarking against similar contracts for advertising agencies of this size and scope would be necessary for a more definitive evaluation. The firm-fixed-price nature of the contract helps control costs, but the effectiveness of the media placement and creative services will ultimately determine the true value.

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 advertising services contract. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and the evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages a wider range of offers, potentially leading to more competitive pricing and better service quality.

Public Impact

The Department of the Navy benefits from professional advertising services to support its recruitment and public relations efforts. The contract facilitates the delivery of advertising campaigns across various media platforms. The geographic impact is likely national, given the scope of Navy recruitment and public information needs. The contract supports the workforce within the advertising industry, including media vendors and creative professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overspending if media placement is not optimized for reach and cost-effectiveness.
Risk of creative messaging not resonating with target audiences, leading to ineffective campaigns.
Dependence on a single contractor for a significant portion of advertising services could limit flexibility.

Positive Signals

Firm-fixed-price contract provides budget certainty.
Awarded through full and open competition, suggesting a fair process.
Contract duration allows for consistent campaign execution.

Sector Analysis

The advertising industry is a dynamic sector encompassing media planning, buying, creative development, and campaign management. Federal agencies, particularly those with large public outreach and recruitment needs like the Department of Defense, are significant clients. This contract for media placement and space charges falls within the core services offered by advertising agencies. Comparable spending benchmarks for federal advertising contracts vary widely based on scope, but this $3 million award over roughly 14 months represents a moderate investment for specific campaign objectives.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false. This indicates that the competition was open to all eligible businesses, regardless of size. While this maximizes the pool of potential bidders, it means that small businesses did not receive a preferential opportunity for this specific contract. There is no explicit information provided regarding subcontracting plans for small businesses, which would be a key factor in assessing their indirect involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, requiring the contractor to deliver specified services within the agreed budget. Transparency is facilitated by the public nature of federal contract awards, allowing for general review. The Inspector General's office for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense Advertising Contracts
Navy Recruitment Advertising
Federal Media Buying Services
Government Public Relations Campaigns

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Effectiveness of media placement and creative execution is critical for value.
Limited competition (2 bidders) may impact price discovery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.0 million to CAMPBELL-EWALD COMPANY. OPTION PERIOD 3 - SPACE CHARGES & MEDIA PLACEMENT

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 $30.0 million.

What is the period of performance?

Start: 2008-09-09. End: 2009-11-19.

What specific media channels and placements were included in this $3 million contract, and how were they selected?

The provided data does not specify the exact media channels or placements included in the $3 million contract. Typically, such contracts would detail allocations for digital advertising (social media, search engines, display networks), traditional media (television, radio, print), and outdoor advertising. The selection process would likely involve market research to identify the most effective channels for reaching the Department of the Navy's target audiences, considering factors like reach, frequency, cost-per-impression, and engagement metrics. A detailed statement of work or contract line item details would be required to understand the specific media mix and justification for its selection.

How does the $3 million contract value compare to similar advertising contracts awarded by the Department of the Navy or other DoD components for comparable services?

Benchmarking this $3 million contract requires comparing it to similar advertising services contracts awarded by the Department of the Navy or other DoD components. Factors such as contract duration (436 days), scope of services (space charges and media placement), and the number of bids received (2) are relevant. Without access to a comprehensive database of comparable federal contracts, a precise comparison is difficult. However, for a 14-month period, $3 million for media placement and space charges suggests a focused campaign rather than a broad, multi-year strategic effort. Larger, more comprehensive advertising contracts for major recruitment drives or public awareness campaigns could easily exceed tens of millions of dollars annually.

What was the track record of Campbell-Ewald Company in fulfilling previous federal advertising contracts prior to this award?

The provided data does not include information on Campbell-Ewald Company's prior track record with federal contracts. To assess their performance history, one would need to review their past federal contract awards, including their performance ratings, any past performance issues, and the types of services they have delivered. Agencies often use past performance as a key evaluation factor in source selection. A review of the Federal Procurement Data System (FPDS) or other contract databases would be necessary to gather this information and evaluate their reliability and effectiveness in fulfilling government requirements.

What are the key performance indicators (KPIs) used to measure the success of the advertising services provided under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. For advertising services, common KPIs include reach (percentage of target audience exposed to the ad), frequency (average number of times an individual is exposed), click-through rates (for digital ads), conversion rates (e.g., inquiries, applications), cost per acquisition (CPA), brand awareness metrics, and return on ad spend (ROAS). The Department of the Navy would have defined these KPIs in the contract's performance work statement (PWS) to objectively measure the effectiveness of Campbell-Ewald Company's media placement and advertising efforts.

Given the firm-fixed-price nature, what mechanisms are in place to ensure the contractor is delivering cost-effective media placements and not simply maximizing spend?

The firm-fixed-price (FFP) contract structure itself provides a primary mechanism for cost control, as the contractor is obligated to perform the specified work for a set price. However, to ensure cost-effectiveness beyond just meeting the price, the Department of the Navy would likely employ several oversight measures. These could include requiring detailed reporting on media expenditures, performance metrics (like CPM - cost per thousand impressions, CPC - cost per click), and justification for media choices. Regular performance reviews and discussions with the contractor about optimizing media buys based on real-time data would also be crucial. The government's ability to monitor campaign performance and provide feedback is key to ensuring value within the FFP framework.

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: N0014005R0038

Offers Received: 2

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, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $30,000,000

Exercised Options: $30,000,000

Current Obligation: $30,000,000

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0014006D0005

IDV Type: IDC

Timeline