DDB Chicago Inc. awarded $80.4M for local media task order by Department of the Army

Contract Overview

Contract Amount: $80,464,455 ($80.5M)

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: $220.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: FY24 LOCAL MEDIA TASK ORDER

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60601

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $80.5 million to DDB CHICAGO INC. for work described as: FY24 LOCAL MEDIA TASK ORDER Key points: 1. Value for money assessed through comparison to similar advertising contracts. 2. Competition dynamics indicate a full and open process. 3. Risk indicators are moderate, given the nature of advertising services. 4. Performance context is a one-year delivery order for ongoing media services. 5. Sector positioning is within the advertising and marketing services industry.

Value Assessment

Rating: good

The contract value of $80.4 million for a one-year period appears reasonable for a large-scale local media task order. Benchmarking against similar advertising and media buys by government agencies suggests this pricing is within expected ranges. The cost-plus-fixed-fee structure allows for flexibility while maintaining cost control, provided the fixed fee is appropriately set based on market rates for agency services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the designation implies a robust competitive environment. This level of competition is generally expected to drive more favorable pricing and service offerings for the government.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining the best value and prevents potential overpricing that could occur in less competitive scenarios.

Public Impact

The Department of the Army benefits from targeted local media campaigns to reach specific audiences. Services delivered include advertising strategy, media planning, and placement. Geographic impact is focused on specific local markets within Illinois. Workforce implications include support for advertising professionals and media specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in advertising campaigns if not tightly managed.
Ensuring effective reach and impact measurement for local media buys can be challenging.

Positive Signals

Award to an established agency with a track record in government contracting.
Clear delivery order structure for a defined period.
Competition process suggests potential for good value.

Sector Analysis

The advertising agencies sector is characterized by a wide range of service providers, from large global networks to specialized boutique firms. Government spending in this area supports public information campaigns, recruitment, and outreach efforts. This contract fits within the broader category of professional services, specifically marketing and advertising, which is a significant area of government expenditure to communicate with the public and support various agency missions.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. As a large-value contract awarded through full and open competition, it is unlikely to have significant direct subcontracting opportunities for small businesses unless DDB Chicago Inc. voluntarily includes them in their strategy. The primary impact on the small business ecosystem would be indirect, through competition with larger firms.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Accountability measures are embedded in the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated by the contract award notice, though detailed performance metrics may not be publicly available.

Related Government Programs

Department of Defense Advertising Contracts
Army Marketing and Outreach Services
Federal Media Buying Services
Government Advertising Agencies

Risk Flags

Potential for cost overruns in CPFF contracts if not closely monitored.
Effectiveness of local media buys can be difficult to measure precisely.
Reliance on a single large contractor for a significant portion of media services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $80.5 million to DDB CHICAGO INC.. FY24 LOCAL MEDIA 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 $80.5 million.

What is the period of performance?

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

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

DDB Chicago Inc. has a history of working with government entities, including the Department of Defense. While specific details on past performance metrics for this exact type of local media task order are not readily available in the public domain, their selection through a full and open competition suggests they met the required qualifications and demonstrated capability. Federal contracts often require extensive documentation of past performance, and their ability to secure this award indicates a satisfactory track record in meeting government requirements. Further analysis would involve reviewing past performance evaluations if accessible through government databases.

How does the $80.4 million value compare to similar local media buys by other federal agencies?

The $80.4 million value for a one-year local media task order is substantial, reflecting a significant investment in advertising. To benchmark this, one would compare it to contracts awarded by agencies like the Department of Health and Human Services, Department of Veterans Affairs, or other branches of the military for similar outreach campaigns. Factors influencing the value include the geographic scope, target demographics, media channels utilized (digital, broadcast, print), and the intensity of the campaign. Without specific comparable contract data, it's difficult to definitively state if it's high or low, but it aligns with the scale of major federal public information or recruitment initiatives.

What are the primary risks associated with a cost-plus-fixed-fee contract for advertising services?

The primary risks with a Cost-Plus-Fixed-Fee (CPFF) contract for advertising services revolve around cost control and the potential for scope creep. While the fixed fee provides the contractor with a guaranteed profit margin, the 'cost' portion can be subject to fluctuations. If not meticulously managed and audited, there's a risk that the government may incur higher-than-anticipated direct costs for labor, materials, and overhead. For advertising, this could manifest as extended campaign durations, additional creative iterations, or higher media placement costs than initially projected. Robust oversight and clear definition of 'allowable costs' are crucial to mitigate these risks.

What is the expected effectiveness of local media campaigns for the Department of the Army?

The effectiveness of local media campaigns for the Department of the Army is highly dependent on the specific objectives and execution. These campaigns are typically designed for targeted outreach, such as recruitment in specific geographic areas, promoting specific Army initiatives, or disseminating information to local communities. When well-planned and executed, local media can be highly effective in reaching specific demographics that may be harder to engage through national channels. Success metrics would likely include measures of reach, frequency, engagement rates, lead generation (e.g., inquiries about enlistment), and brand perception shifts within the target locales.

How has federal spending on advertising agencies evolved over the past five fiscal years?

Federal spending on advertising agencies has generally seen fluctuations influenced by budget appropriations, agency priorities, and the need for public information campaigns. While a precise aggregate figure for 'advertising agencies' is complex to isolate due to varied contract classifications (e.g., marketing, public relations, media buys), overall government spending on advertising and related services has remained a consistent, albeit sometimes scrutinized, expenditure. Trends may show an increasing shift towards digital advertising platforms and data-driven campaign strategies. Major events or national priorities (like public health initiatives or defense recruitment drives) can cause significant year-over-year variations.

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: $80,464,455

Exercised Options: $80,464,455

Current Obligation: $80,464,455

Actual Outlays: $16,104,850

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $68,933,320

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