Treasury's $28.4M Advertising Contract with True North Communications: A Decade of Firm Fixed Price Services
Contract Overview
Contract Amount: $28,383,875 ($28.4M)
Contractor: True North Communications Inc
Awarding Agency: Department of the Treasury
Start Date: 2005-12-01
End Date: 2012-06-06
Contract Duration: 2,379 days
Daily Burn Rate: $11.9K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: ADVERTISING SERVICES
Place of Performance
Location: NEW YORK, NEW YORK County, NEW YORK, 10001
State: New York Government Spending
Plain-Language Summary
Department of the Treasury obligated $28.4 million to TRUE NORTH COMMUNICATIONS INC for work described as: ADVERTISING SERVICES Key points: 1. Significant contract value over $28 million awarded to a single vendor. 2. Competition was competitive, indicated by 'COMPETITIVE DELIVERY ORDER' type. 3. Risk appears moderate given the long duration and firm fixed price structure. 4. Sector is advertising services, a common area for government procurement.
Value Assessment
Rating: good
The contract utilized a firm fixed price structure, which is generally favorable for the government in managing costs for well-defined services like advertising. The total award value of $28.4 million over approximately 7 years suggests a consistent, albeit substantial, investment in advertising.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded as a 'COMPETITIVE DELIVERY ORDER', indicating that full and open competition was utilized. This method allows for the widest possible range of vendors to bid, promoting price discovery and potentially leading to better value for the government.
Taxpayer Impact: The competitive nature of the award suggests that taxpayers likely benefited from a fair market price for the advertising services rendered.
Public Impact
Taxpayer funds were used for advertising services by the Bureau of the Fiscal Service. The contract spanned over seven years, indicating a long-term need for these services. The vendor, True North Communications Inc., is based in New York.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (7 years) could lead to potential cost inefficiencies if market conditions change significantly.
- Lack of specific performance metrics or outcome data makes it difficult to assess effectiveness.
- Firm fixed price might disincentivize innovation or cost-saving measures by the contractor over time.
Positive Signals
- Awarded through competitive procedures, suggesting potential for good value.
- Firm fixed price contract type provides cost certainty for the government.
- Long-term engagement may foster expertise and efficiency in advertising delivery.
Sector Analysis
The advertising services sector is dynamic, with significant variation in pricing based on agency needs, campaign scope, and vendor expertise. Government contracts in this area often focus on public awareness, outreach, and information dissemination, requiring specialized marketing and communication skills.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors or prime contractors. Further analysis would be needed to determine the extent of small business participation in this contract.
Oversight & Accountability
The contract was awarded by the Bureau of the Fiscal Service within the Department of the Treasury. Oversight would typically involve contract officers monitoring performance, adherence to terms, and financial expenditures to ensure accountability.
Related Government Programs
- Department of the Treasury Contracting
- Bureau of the Fiscal Service Programs
Risk Flags
- Long contract duration may not reflect current market rates.
- Lack of specific performance metrics hinders effectiveness assessment.
- Potential for contractor complacency over a 7-year fixed-price agreement.
- No clear indication of small business participation.
Tags
department-of-the-treasury, ny, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $28.4 million to TRUE NORTH COMMUNICATIONS INC. ADVERTISING SERVICES
Who is the contractor on this award?
The obligated recipient is TRUE NORTH COMMUNICATIONS INC.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).
What is the total obligated amount?
The obligated amount is $28.4 million.
What is the period of performance?
Start: 2005-12-01. End: 2012-06-06.
What was the specific nature and impact of the advertising services provided under this contract?
The provided data lacks specifics on the advertising campaigns executed. Without details on the objectives, target audiences, and channels used, it's impossible to assess the direct impact or effectiveness of the services. Future analysis should seek campaign reports and performance metrics to understand the value derived from the $28.4 million expenditure.
Were there any performance issues or contract modifications that impacted the final cost or delivery?
The data indicates a firm fixed price contract over a long duration (2005-2012). While this structure offers cost certainty, it's crucial to examine contract modifications, if any, for scope changes or adjustments that might have affected the overall value or delivery. The absence of reported issues suggests a stable execution, but a deeper dive into contract history is warranted.
How does the per-unit cost of this advertising service compare to similar government contracts or industry benchmarks?
A direct per-unit cost benchmark is not feasible without knowing the specific units of service (e.g., ad placements, campaign reach, creative development hours). However, the total award of $28.4 million over seven years for advertising services by a federal agency warrants comparison with other large-scale government advertising procurements and private sector agency retainers to gauge overall cost-effectiveness.
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: THE Interpublic Group of Companies Inc (UEI: 006985790)
Address: 150 E 42ND ST, NEW YORK, NY, 90
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $28,383,875
Exercised Options: $28,383,875
Current Obligation: $28,383,875
Parent Contract
Parent Award PIID: GS23F0037K
IDV Type: FSS
Timeline
Start Date: 2005-12-01
Current End Date: 2012-06-06
Potential End Date: 2012-06-06 00:00:00
Last Modified: 2013-11-29
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