HHS awarded $346M for national tobacco campaign, with Plowshare Group Inc. as prime contractor

Contract Overview

Contract Amount: $346,479,693 ($346.5M)

Contractor: Plowshare Group, Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2015-09-29

End Date: 2021-09-28

Contract Duration: 2,191 days

Daily Burn Rate: $158.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF NATIONAL TOBACCO CAMPAIGN

Place of Performance

Location: STAMFORD, FAIRFIELD County, CONNECTICUT, 06902

State: Connecticut Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $346.5 million to PLOWSHARE GROUP, INC for work described as: IGF::OT::IGF NATIONAL TOBACCO CAMPAIGN Key points: 1. The contract value of $346 million over six years suggests a significant investment in public health messaging. 2. The 'Other Services Related to Advertising' (NAICS 541890) code indicates a broad scope of work, potentially encompassing creative development, media placement, and campaign evaluation. 3. The use of a 'Cost Plus Fixed Fee' (CPFF) contract type can incentivize contractor efficiency while ensuring a defined profit margin. 4. The contract duration of 2191 days (approximately 6 years) points to a long-term public health initiative. 5. The absence of small business set-aside flags suggests the primary contractor was not a small business, and subcontracting opportunities for small businesses are not explicitly mandated by this contract. 6. The contract was awarded under 'Full and Open Competition', indicating a competitive bidding process. 7. The prime contractor, Plowshare Group, Inc., has secured a substantial award, highlighting their capacity to manage large-scale public health campaigns.

Value Assessment

Rating: good

The total award of $346 million over six years averages to approximately $57.7 million per year. This level of spending is substantial for a national public health campaign, reflecting the scale and importance of addressing tobacco use. Benchmarking against other large federal advertising and public health campaigns would be necessary for a precise value-for-money assessment, but the duration and scope suggest a comprehensive effort. The CPFF contract type allows for cost reimbursement plus a fixed fee, which can be effective for complex projects where costs are difficult to estimate upfront, though it requires diligent oversight to manage expenditures.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition', indicating that all responsible sources were permitted to submit a bid. The presence of two bids ('no': 2) suggests a competitive process, though the number of bidders is on the lower side for a contract of this magnitude. A higher number of bidders typically leads to more robust price discovery and potentially better value for the government. However, the specific nature of large-scale public health campaigns might limit the pool of highly qualified and experienced contractors.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, generally provides a better opportunity for taxpayers to receive competitive pricing compared to sole-source or limited competition awards. This process aims to ensure that the selected contractor offers the best value proposition.

Public Impact

The primary beneficiaries are the public, particularly populations targeted by anti-tobacco messaging, aiming to reduce smoking rates and improve health outcomes. The services delivered likely include the development and execution of a national media campaign, public awareness initiatives, and potentially cessation support resources. The geographic impact is national, aiming to reach diverse populations across the United States. Workforce implications could include employment opportunities within the prime contractor's organization and its subcontractors, as well as within advertising, media, and public health sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The limited number of bidders (2) in a full and open competition could indicate potential barriers to entry for smaller or less experienced firms.
The 'Cost Plus Fixed Fee' contract type requires careful monitoring to ensure costs remain reasonable and do not escalate unnecessarily.
The broad scope of 'Other Services Related to Advertising' might lead to challenges in precisely defining and measuring campaign effectiveness and return on investment.

Positive Signals

The award was made under 'Full and Open Competition', suggesting a fair and transparent procurement process.
The substantial funding allocated indicates a strong commitment from the agency to address a significant public health issue.
The long contract duration (6 years) allows for sustained effort and potential long-term impact on public health behaviors.

Sector Analysis

This contract falls within the advertising and public relations services sector (NAICS 541890). The market for large-scale public health campaigns is specialized, often requiring agencies with expertise in behavior change communication, media planning, and extensive reach. Federal spending in this area is driven by public health priorities, such as smoking cessation, disease prevention, and health promotion. Comparable spending benchmarks would involve looking at other major federal health campaigns, such as those for HIV/AIDS awareness, obesity prevention, or opioid crisis response, which can also involve tens to hundreds of millions of dollars over several years.

Small Business Impact

The contract data indicates that small business set-asides were not utilized ('sb': false, 'ss': false). This suggests that the primary contract was not specifically reserved for small businesses. While the prime contractor, Plowshare Group, Inc., is not flagged as a small business, there may be opportunities for small businesses to participate as subcontractors. However, without specific subcontracting plans or goals detailed in the award, the extent of small business involvement remains unclear. The absence of explicit set-asides means that the focus was on selecting the best overall offer, rather than prioritizing small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS). As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure that costs are reasonable and allocable to the contract. Performance reviews, regular reporting from the contractor, and potentially site visits would be standard oversight mechanisms. The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract, ensuring accountability.

Related Government Programs

National Public Health Campaigns
Health Communication Services
Advertising and Marketing Services
Centers for Disease Control and Prevention Contracts
Department of Health and Human Services Initiatives

Risk Flags

Limited Competition
Cost Overrun Risk
Effectiveness Measurement Challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $346.5 million to PLOWSHARE GROUP, INC. IGF::OT::IGF NATIONAL TOBACCO CAMPAIGN

Who is the contractor on this award?

The obligated recipient is PLOWSHARE GROUP, INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $346.5 million.

What is the period of performance?

Start: 2015-09-29. End: 2021-09-28.

What is the track record of Plowshare Group, Inc. in managing large federal health campaigns?

Information regarding Plowshare Group, Inc.'s specific track record with large federal health campaigns is not detailed in the provided data. However, securing a $346 million contract from the CDC for a national tobacco campaign indicates a significant level of trust and demonstrated capability by the agency. To fully assess their track record, one would need to review past performance evaluations, other federal contracts awarded to the company, and their success in delivering similar public health initiatives. This would involve examining project scope, budget management, stakeholder engagement, and measurable outcomes from previous campaigns managed by Plowshare Group.

How does the $346 million contract value compare to similar national public health campaigns?

The $346 million contract value for a six-year national tobacco campaign is substantial and aligns with the scale of major federal public health initiatives. For instance, large-scale campaigns addressing issues like HIV/AIDS prevention, obesity, or the opioid crisis have historically commanded similar or even larger budgets over multi-year periods. The annual average of approximately $57.7 million is significant, reflecting the broad reach and intensive media efforts required for a national campaign. Benchmarking against specific campaigns, such as the CDC's 'Tips From Former Smokers' or other national health promotion efforts, would provide more precise comparisons regarding cost per capita reached or cost per outcome achieved.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for a public health campaign?

The primary risks associated with a CPFF contract for a public health campaign revolve around cost control and ensuring optimal value. While the fixed fee provides the contractor with a defined profit, the 'cost plus' element means the government reimburses allowable costs. This can incentivize the contractor to incur higher costs if oversight is not rigorous, potentially leading to budget overruns beyond the anticipated fixed fee. For a campaign focused on behavior change, defining and measuring 'allowable' costs related to creative development, media placement, and impact assessment can be complex. Effective risk mitigation requires robust government oversight, clear performance metrics, and detailed cost accounting procedures to ensure that taxpayer funds are used efficiently and effectively towards campaign objectives.

How effective has the CDC's investment in national tobacco campaigns been historically?

Historically, the CDC's investment in national tobacco campaigns has demonstrated significant effectiveness in reducing smoking rates and improving public health. Campaigns like 'Tips From Former Smokers' have been credited with motivating millions of smokers to attempt quitting and have been shown to be highly cost-effective in terms of life-years saved and healthcare costs averted. While specific outcomes for the IGF NATIONAL TOBACCO CAMPAIGN awarded to Plowshare Group are not detailed here, the sustained federal commitment to such campaigns underscores their perceived value and impact on public health goals. Evaluating effectiveness typically involves tracking smoking prevalence, quit attempts, calls to quitlines, and long-term health outcome data.

What is the typical duration for large federal public health advertising contracts?

Large federal public health advertising contracts, especially those involving national campaigns aimed at behavior change, typically have durations ranging from three to ten years. This extended timeframe is necessary to allow for campaign development, phased implementation, sustained messaging, and evaluation of long-term impact. A six-year duration, as seen in this contract (2191 days), is quite common for such initiatives. Shorter contracts might be insufficient to establish brand recognition, build trust, and achieve measurable shifts in public behavior. Longer durations also allow for adjustments to campaign strategies based on performance data and evolving public health landscapes.

What are the implications of awarding a large contract under 'Full and Open Competition' with only two bidders?

Awarding a large contract under 'Full and Open Competition' with only two bidders suggests that while the process was open, the pool of qualified and interested contractors may have been limited. This could be due to the specialized nature of the work, high barriers to entry (e.g., experience, bonding capacity), or the specific requirements of the solicitation. While two bidders indicate some level of competition, it is less than ideal for maximizing price discovery and ensuring the government receives the most competitive offers. It raises questions about whether the solicitation was structured in a way that inadvertently limited participation or if the market for such specialized services is inherently concentrated among a few large firms.

Industry Classification

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

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2015N16904

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Publicis Groupe S.A.

Address: 1 DOCK ST STE 209, STAMFORD, CT, 06902

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

Financial Breakdown

Contract Ceiling: $350,695,965

Exercised Options: $350,695,965

Current Obligation: $346,479,693

Actual Outlays: $174,882

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline