DoD awards $82.3M for media and furnishings, with DDB Chicago Inc. securing a significant portion

Contract Overview

Contract Amount: $82,322,225 ($82.3M)

Contractor: DDB Chicago Inc.

Awarding Agency: Department of Defense

Start Date: 2023-11-16

End Date: 2024-11-15

Contract Duration: 365 days

Daily Burn Rate: $225.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: FY24 NATIONAL MEDIA AND TALENT & FURNISHINGS TASK ORDER

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60601

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $82.3 million to DDB CHICAGO INC. for work described as: FY24 NATIONAL MEDIA AND TALENT & FURNISHINGS TASK ORDER Key points: 1. Value for money assessed against industry benchmarks for advertising and creative services. 2. Competition dynamics indicate a robust bidding process for this significant federal contract. 3. Risk indicators are being monitored for performance and delivery against contract terms. 4. Performance context is crucial given the broad scope of media and furnishings. 5. Sector positioning places this contract within the advertising and professional services industry.

Value Assessment

Rating: good

The contract's value of $82.3 million for media and furnishings appears reasonable within the context of large-scale federal advertising and procurement. Benchmarking against similar large-scale government contracts for advertising campaigns and logistical support suggests that the pricing structure, particularly if it includes fixed fees and cost reimbursements, is competitive. However, a detailed analysis of the cost-plus-fixed-fee (CPFF) structure would be necessary to fully ascertain the value proposition and ensure efficient use of taxpayer funds, especially considering potential variations in service delivery and material costs.

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 bids. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive environment. This approach is generally favored for ensuring the government receives the best possible value by leveraging market competition.

Taxpayer Impact: Full and open competition maximizes the potential for competitive pricing, which directly benefits taxpayers by driving down costs and encouraging innovative solutions from a wider pool of contractors.

Public Impact

The Department of Defense benefits from enhanced media presence and improved operational environments through furnished facilities. Services delivered include national media campaigns and the provision of furnishings for various military installations. Geographic impact is likely nationwide, supporting various branches and locations within the DoD. Workforce implications may include support for military personnel and potentially civilian staff through improved facilities and communication.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns in a Cost Plus Fixed Fee contract if not closely managed.
Ensuring consistent quality across diverse media and furnishing requirements.
Timely delivery of furnishings to meet operational needs.
Effectiveness of national media campaigns in achieving DoD objectives.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Contract duration allows for sustained support and potential economies of scale.
DDB Chicago Inc. has experience in large-scale advertising and procurement.

Sector Analysis

This contract falls within the advertising and professional services sector, specifically focusing on media buys, creative services, and logistical support for furnishings. The federal government is a significant consumer of these services, often requiring large-scale campaigns and procurement to support its vast operations and public outreach. Benchmarks for similar contracts would typically involve analyzing the cost of media placements across various platforms and the procurement costs for office and operational furnishings.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside criterion (ss: false, sb: false). While DDB Chicago Inc. is the prime contractor, there may be opportunities for small businesses to participate as subcontractors, particularly in specialized areas of media production or furnishing supply. The extent of small business subcontracting will be a key factor in assessing the broader economic impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting officers and program managers. Accountability measures will be tied to performance metrics outlined in the contract, including delivery schedules, quality standards, and campaign effectiveness. Transparency is facilitated through federal procurement databases, though detailed performance reports may not always be publicly available.

Related Government Programs

Department of Defense Advertising and Public Relations Services
Federal Government Office Furniture Procurement
National Media Campaign Contracts
Logistical Support Services for Government Agencies

Risk Flags

Potential for cost creep in CPFF contracts.
Ensuring effective media campaign ROI.
Supply chain and delivery risks for furnishings.
Quality control across diverse service and product requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $82.3 million to DDB CHICAGO INC.. FY24 NATIONAL MEDIA AND TALENT & FURNISHINGS TASK ORDER

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 $82.3 million.

What is the period of performance?

Start: 2023-11-16. End: 2024-11-15.

What is DDB Chicago Inc.'s track record with federal contracts, particularly within the Department of Defense?

DDB Chicago Inc. has a history of working with federal agencies, including the Department of Defense. While specific details of past DoD contracts are not provided in this data snippet, their ability to secure a contract of this magnitude suggests prior experience and a demonstrated capability to meet federal requirements. A deeper dive into their contract history would reveal the types of services previously rendered, their performance ratings on those contracts, and the overall value of their federal portfolio. This information is crucial for assessing their reliability and expertise in handling complex government projects like national media campaigns and furnishing procurements.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar federal services?

The Cost Plus Fixed Fee (CPFF) contract type is common for services where the scope of work can be defined but the exact costs are uncertain, such as research and development or complex service contracts. In this case, it allows the contractor to be reimbursed for allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if the scope changes, but it carries a higher risk of cost overruns if not meticulously managed. For advertising and furnishings, FFP might be preferred for standardized items or well-defined campaigns, while CPFF allows for adaptation to evolving media landscapes or unforeseen logistical challenges. The government's oversight is critical to ensure costs remain reasonable and the fixed fee is justified.

What are the key performance indicators (KPIs) likely used to evaluate the success of this contract?

Key performance indicators for this contract would likely encompass both media campaign effectiveness and furnishing delivery. For media, KPIs could include reach, frequency, engagement rates, message recall, and ultimately, the achievement of specific DoD communication objectives (e.g., recruitment, public awareness). For furnishings, KPIs would focus on on-time delivery, adherence to specifications, quality of materials, and successful installation. The 'fixed fee' component of the CPFF contract suggests that meeting these KPIs will be crucial for the contractor to achieve their profit targets, and failure to do so could impact future contract awards.

What is the historical spending trend for similar media and furnishings contracts within the Department of Defense?

Historical spending on media and furnishings within the Department of Defense can fluctuate significantly based on strategic priorities, operational tempo, and budget allocations. Large-scale media campaigns, often tied to recruitment or public information initiatives, can represent substantial annual expenditures. Similarly, furnishing requirements for new facilities, renovations, or troop housing contribute to ongoing spending. Analyzing past years' data would reveal whether this $82.3 million award represents an increase, decrease, or stable level of investment compared to previous periods. Understanding these trends helps contextualize the current award and identify potential shifts in DoD's procurement strategies for these categories.

What are the potential risks associated with managing a contract that combines media services and physical goods (furnishings)?

Managing a contract that spans both intangible media services and tangible furnishings presents unique risks. For media, risks include the effectiveness of advertising placements, brand reputation management, and adapting to rapidly changing digital landscapes. For furnishings, risks involve supply chain disruptions, quality control of manufactured goods, logistical challenges in delivery and installation, and potential obsolescence. Integrating these two distinct service areas under one contract requires robust project management to ensure seamless coordination, consistent quality, and timely execution across both domains. The contractor must demonstrate expertise in both advertising strategy and procurement/logistics.

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 PLUS FIXED FEE (U)

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: $82,322,225

Exercised Options: $82,322,225

Current Obligation: $82,322,225

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $71,254,582

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