Army Awards $147.7M Contract to DDB Chicago for Advertising Services

Contract Overview

Contract Amount: $147,718,765 ($147.7M)

Contractor: DDB Chicago Inc.

Awarding Agency: Department of Defense

Start Date: 2020-12-01

End Date: 2022-02-28

Contract Duration: 454 days

Daily Burn Rate: $325.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST NO FEE

Sector: Other

Official Description: NATIONAL MEDIA - ARMY AND ARNG

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60601

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $147.7 million to DDB CHICAGO INC. for work described as: NATIONAL MEDIA - ARMY AND ARNG Key points: 1. The contract value of $147.7 million represents a significant investment in advertising. 2. DDB Chicago Inc. secured this contract through full and open competition. 3. The contract duration of 454 days suggests a substantial, ongoing need for services. 4. The sector is advertising, a key component of public outreach and communication.

Value Assessment

Rating: fair

The contract type is 'COST NO FEE', which can make direct price comparisons difficult. Benchmarking against similar advertising contracts is necessary to fully assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition, indicating a robust price discovery process. This method generally leads to more competitive pricing.

Taxpayer Impact: Taxpayer funds are being used for advertising services, the effectiveness and necessity of which should be monitored.

Public Impact

Public awareness campaigns may be funded by this contract. Government messaging and recruitment efforts could be supported. The contract impacts the advertising industry by providing a large revenue stream.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed cost breakdown for 'COST NO FEE' contract.
Potential for scope creep in advertising campaigns.
Measuring the ROI of advertising can be challenging.

Positive Signals

Awarded through full and open competition.
Clear contract duration and delivery order structure.

Sector Analysis

The advertising sector is dynamic, with agencies competing for large government contracts. Benchmarks for similar national media advertising contracts would provide better context for this award.

Small Business Impact

The data does not indicate if small businesses were involved as subcontractors. Further analysis is needed to determine small business participation.

Oversight & Accountability

Oversight would focus on the execution of advertising campaigns, adherence to budget, and the effectiveness of the messaging. The 'COST NO FEE' structure requires careful monitoring of expenditures.

Related Government Programs

Advertising Agencies
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Cost transparency concerns with 'COST NO FEE' structure.
Difficulty in measuring advertising effectiveness and ROI.
Potential for contractor to not prioritize cost efficiency.
Lack of small business participation data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $147.7 million to DDB CHICAGO INC.. NATIONAL MEDIA - ARMY AND ARNG

Who is the contractor on this award?

The obligated recipient is DDB CHICAGO INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $147.7 million.

What is the period of performance?

Start: 2020-12-01. End: 2022-02-28.

What is the expected return on investment for this advertising spend?

The return on investment (ROI) for advertising is often measured by metrics like public awareness, engagement, or behavioral change. Without specific campaign goals and tracking mechanisms defined in the contract, quantifying the ROI is challenging. The 'COST NO FEE' structure necessitates a focus on performance metrics to ensure value.

What are the risks associated with a 'COST NO FEE' contract for advertising?

A 'COST NO FEE' contract carries risks related to cost control, as the government reimburses allowable costs without a fixed profit margin. This can lead to less incentive for the contractor to minimize expenses. Effective oversight is crucial to ensure costs are reasonable and allocable to the contract's objectives.

How does this contract contribute to the Army's overall communication strategy effectiveness?

This contract supports the Army's communication strategy by providing professional advertising services for national media. Its effectiveness hinges on the quality of creative content, strategic media placement, and alignment with broader recruitment and public relations goals. Measuring campaign reach and impact is key to assessing its contribution.

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: W9124D16R0046

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 225 N MICHIGAN AVE FL 10, CHICAGO, IL, 60601

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

Financial Breakdown

Contract Ceiling: $151,526,519

Exercised Options: $151,526,519

Current Obligation: $147,718,765

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9124D19D0001

IDV Type: IDC

Timeline