HHS awards $74M for public education campaign, with 100% of funds going to a single contractor

Contract Overview

Contract Amount: $73,993,660 ($74.0M)

Contractor: True North Communications Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2015-07-16

End Date: 2017-07-15

Contract Duration: 730 days

Daily Burn Rate: $101.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: IGF::OT::IGF EXTENSION #2 OF FULL AND OPEN PUBLIC EDUCATION CAMPAIGN - GENERAL MARKET YOUTH

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10001

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $74.0 million to TRUE NORTH COMMUNICATIONS INC for work described as: IGF::OT::IGF EXTENSION #2 OF FULL AND OPEN PUBLIC EDUCATION CAMPAIGN - GENERAL MARKET YOUTH Key points: 1. The contract was awarded using full and open competition, but only one bid was received. 2. The contract type is Time and Materials, which can pose risks if not managed closely. 3. The contract duration is two years, with a total value of $74 million. 4. The contractor, True North Communications Inc., has a track record of securing federal contracts. 5. The contract is for a public education campaign, indicating a focus on outreach and awareness. 6. The contract was awarded to a New York-based company, potentially impacting local economic development.

Value Assessment

Rating: fair

The contract's value of $74 million over two years averages $37 million annually. Benchmarking this against similar public education campaigns is challenging without more specific details on the campaign's scope and objectives. However, the Time and Materials pricing structure warrants careful monitoring to ensure costs remain aligned with the value delivered. The single bid received also raises questions about whether the pricing reflects competitive market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition. However, only one bid was received from True North Communications Inc. While the process was open, the lack of multiple bidders suggests potential issues with market interest, solicitation clarity, or contractor capacity. This limited competition may have impacted the government's ability to secure the most favorable pricing.

Taxpayer Impact: The single bid received means taxpayers may not have benefited from the cost savings typically achieved through robust competition, potentially leading to higher overall expenditure for the campaign.

Public Impact

The primary beneficiaries are the public, who will receive information through the education campaign. The services delivered include advertising and communication strategies to raise public awareness. The geographic impact is likely national, given the nature of a public education campaign. The contract supports the workforce within the advertising and communications sector, specifically at True North Communications Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Risk of cost overruns due to Time and Materials pricing without sufficient competition.
Potential for limited innovation or reach due to a single bidder.
Lack of transparency in pricing due to the absence of competitive bids.

Positive Signals

Contract awarded through a formal full and open competition process.
The contractor is a US-based entity.
The contract aims to serve a public good through an education campaign.

Sector Analysis

The advertising and public relations industry is a significant sector within the broader professional services market. Federal spending in this area supports government outreach and public awareness initiatives. This contract for a public education campaign fits within the 'Advertising Agencies' (NAICS 541810) category. Comparable spending benchmarks would depend on the specific goals and scale of the campaign, but $37 million annually is a substantial investment for a single campaign.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no indication of subcontracting plans for small businesses within the provided data. The focus on a single, potentially larger, advertising firm may limit opportunities for small businesses to participate in this specific federal initiative.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' contracting officers and potentially the Food and Drug Administration's program managers. Transparency is limited by the single bid. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Public Health Campaigns
Health Communication Services
Advertising and Marketing Services
Federal Public Awareness Initiatives

Risk Flags

Single Bidder
Time and Materials Contract Type
Lack of Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $74.0 million to TRUE NORTH COMMUNICATIONS INC. IGF::OT::IGF EXTENSION #2 OF FULL AND OPEN PUBLIC EDUCATION CAMPAIGN - GENERAL MARKET YOUTH

Who is the contractor on this award?

The obligated recipient is TRUE NORTH COMMUNICATIONS INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Food and Drug Administration).

What is the total obligated amount?

The obligated amount is $74.0 million.

What is the period of performance?

Start: 2015-07-16. End: 2017-07-15.

What is the track record of True North Communications Inc. with federal contracts, particularly those involving public education campaigns?

True North Communications Inc. has a history of receiving federal contracts. While specific details on past public education campaigns are not provided in this data snippet, their award for this $74 million contract suggests they possess the capabilities and experience required for such initiatives. Further investigation into their contract history, performance reviews, and any past issues or successes would provide a more comprehensive understanding of their reliability and effectiveness in delivering government-funded public awareness programs. Analyzing their portfolio of previous work could reveal their expertise in specific communication channels and target demographics relevant to public health or education.

How does the $74 million contract value compare to similar federal public education campaigns?

Direct comparison of the $74 million contract value for this public education campaign to similar federal initiatives is difficult without knowing the specific objectives, scope, and duration of the campaign. Federal public health and education campaigns can vary widely in cost based on their target audience, geographic reach, communication channels used (e.g., TV, digital, print), and the complexity of the message. However, $37 million per year is a significant investment, suggesting a large-scale, potentially national campaign. Benchmarking would require identifying campaigns with similar goals, such as smoking cessation, vaccination drives, or consumer safety awareness, and analyzing their budgets and outcomes.

What are the primary risks associated with the Time and Materials (T&M) contract type in this context?

The primary risk with a Time and Materials (T&M) contract, especially for a large sum like $74 million, is the potential for cost overruns if not managed diligently. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours and materials used, plus a fee. Without strong oversight, robust reporting requirements, and clear task definitions, contractors may not be incentivized to control costs efficiently. In this case, with only one bid received, the government has less leverage to negotiate favorable rates, increasing the risk that the final cost could exceed initial estimates or be higher than if multiple competitive bids were present.

What does the fact that only one bid was received under 'full and open competition' imply about the market for this type of service?

Receiving only one bid under a 'full and open competition' solicitation can imply several things about the market for this type of service. It might suggest that the solicitation requirements were highly specialized, potentially limiting the number of qualified bidders. Alternatively, the perceived value or profitability of the contract may not have been attractive enough to draw multiple competitors, or perhaps the timeline for bidding was too short. It could also indicate a consolidation within the advertising agency sector, where only a few large firms possess the capacity or expertise for such a large-scale federal campaign. This lack of competition raises concerns about price discovery and potentially limits the government's options.

What are the potential implications for program effectiveness given the single bidder scenario?

The single bidder scenario for this $74 million public education campaign could have implications for program effectiveness. While the awarded contractor, True North Communications Inc., presumably met the government's requirements, the absence of competition means there was no direct comparison of different strategic approaches or creative executions. This could potentially limit the range of innovative ideas or diverse perspectives that might have emerged from a more competitive bidding process. The government relied solely on the proposal submitted by True North Communications Inc. to achieve its campaign objectives. Without competitive pressure, there's also a reduced incentive for the contractor to continuously optimize campaign performance beyond the minimum requirements.

How has federal spending in the 'Advertising Agencies' (NAICS 541810) sector trended in recent years, and how does this contract fit?

Federal spending in the 'Advertising Agencies' (NAICS 541810) sector has fluctuated over recent years, often influenced by administration priorities and the need for public outreach on various initiatives, such as public health, national security, or economic programs. This $74 million contract for a public education campaign represents a significant single award within this sector. It aligns with the government's use of advertising agencies to disseminate information and influence public behavior or awareness. To understand its place in the broader trend, one would need to compare its value against the total annual federal spending for NAICS 541810 and analyze the specific objectives of the campaign in relation to other government communication efforts.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

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

Address: 100 W 33RD ST, NEW YORK, NY, 10001

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

Financial Breakdown

Contract Ceiling: $73,993,660

Exercised Options: $73,993,660

Current Obligation: $73,993,660

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSF223201210039I

IDV Type: IDC

Timeline