DoD's $22.5M Advertising Contract Awarded to Wunderman Thompson LLC for 4 Years

Contract Overview

Contract Amount: $22,541,950 ($22.5M)

Contractor: Wunderman Thompson LLC

Awarding Agency: Department of Defense

Start Date: 2008-12-01

End Date: 2012-09-30

Contract Duration: 1,399 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: MCRC ADVERTISING SERVICES; OPTION ONE

Place of Performance

Location: ATLANTA, FULTON County, GEORGIA, 30328

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $22.5 million to WUNDERMAN THOMPSON LLC for work described as: MCRC ADVERTISING SERVICES; OPTION ONE Key points: 1. Contract value represents a significant investment in advertising services for the Department of the Navy. 2. The contract was awarded under full and open competition, suggesting a robust bidding process. 3. The Cost Plus Fixed Fee (CPFF) pricing structure requires careful monitoring to ensure cost control. 4. The duration of nearly four years allows for sustained campaign development and execution. 5. The contract's focus on advertising agencies (NAICS 541810) indicates a need for specialized marketing expertise. 6. The award to a single contractor, Wunderman Thompson LLC, warrants an examination of market concentration.

Value Assessment

Rating: fair

Benchmarking the value of this $22.5 million contract is challenging without specific deliverables or performance metrics. However, the Cost Plus Fixed Fee (CPFF) structure necessitates close oversight to ensure the fixed fee remains reasonable relative to the effort expended and that costs are controlled. Comparing this to other large-scale federal advertising contracts would provide better context on whether the overall price reflects market rates for similar services and scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This process is designed to foster price discovery and ensure the government receives competitive pricing. The number of bidders is not specified, but the open competition suggests a healthy level of interest from the advertising industry for this type of government contract.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for advertising services, potentially leading to more cost-effective campaigns and reduced waste.

Public Impact

The Department of the Navy benefits from professional advertising services to support its recruitment, public awareness, and outreach missions. The contract supports the delivery of various advertising campaigns, including media planning, creative development, and campaign execution. The geographic impact is likely nationwide, given the scope of the Department of the Navy's operations and recruitment needs. The contract supports jobs within the advertising and marketing sector, specifically at Wunderman Thompson LLC and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contracts can incentivize contractors to increase costs if not properly managed, potentially leading to overspending.
Lack of specific performance metrics in the provided data makes it difficult to assess the effectiveness and efficiency of the awarded services.
The concentration of a large contract with a single vendor could limit future competition or create dependency.

Positive Signals

Awarded through full and open competition, suggesting a fair and competitive selection process.
The contract duration of nearly four years allows for strategic planning and consistent execution of advertising efforts.
The selection of a specialized advertising agency indicates a commitment to professional marketing strategies.

Sector Analysis

The advertising industry is a dynamic sector encompassing creative development, media buying, and strategic planning. Federal agencies, particularly large ones like the Department of Defense, often engage specialized firms for their extensive marketing and communication needs. This contract falls within the broader professional services sector, with specific ties to marketing and advertising agencies. Comparable spending benchmarks would involve looking at other large federal contracts for advertising and public relations services across different agencies.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting requirements for small businesses mandated by this specific award. The primary contractor, Wunderman Thompson LLC, will likely manage the entire scope of work, with potential for smaller firms to be engaged as subcontractors at their discretion, rather than through a set-aside requirement.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Performance reviews, cost audits, and adherence to the Cost Plus Fixed Fee (CPFF) terms would be key oversight mechanisms. Transparency is generally maintained through contract award databases, though specific campaign details and performance reports may not always be publicly accessible.

Related Government Programs

Department of Defense Advertising and Public Relations
Federal Agency Marketing Services
Government Communications Contracts
Professional Services Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure requires diligent oversight to prevent cost overruns.
Contract duration is long, necessitating ongoing performance monitoring.
Lack of specific performance metrics in the award data makes ex-ante effectiveness assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.5 million to WUNDERMAN THOMPSON LLC. MCRC ADVERTISING SERVICES; OPTION ONE

Who is the contractor on this award?

The obligated recipient is WUNDERMAN THOMPSON LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.5 million.

What is the period of performance?

Start: 2008-12-01. End: 2012-09-30.

What is the track record of Wunderman Thompson LLC in performing federal contracts, particularly those with a Cost Plus Fixed Fee structure?

Wunderman Thompson LLC, a large global advertising and marketing agency, has experience with federal contracts. However, specific details on their track record with Cost Plus Fixed Fee (CPFF) contracts within the federal government, especially concerning cost control and efficiency, would require a deeper dive into contract performance databases and agency reports. Generally, CPFF contracts require robust oversight from the government to ensure the contractor manages costs effectively and that the fixed fee is commensurate with the effort. Without specific performance data for this contract or similar federal engagements, it's difficult to definitively assess their past performance in this specific pricing model.

How does the $22.5 million contract value compare to similar advertising contracts awarded by the Department of Defense or other federal agencies?

The $22.5 million contract value over approximately four years places this among significant federal advertising procurements. Large agencies like the Department of the Navy often require substantial marketing budgets for recruitment, public affairs, and branding initiatives. To benchmark effectively, one would compare this contract's total value and annual spend against other major advertising and public relations contracts awarded to large agencies by entities such as the Army, Air Force, or other cabinet-level departments. The nature of the services (e.g., media buys, creative production, strategic planning) and the duration are key factors in such comparisons. Without access to a comprehensive database of all comparable contracts, a precise benchmark is difficult, but this figure suggests a substantial investment.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advertising services, and how are they mitigated?

The primary risk with a CPFF contract is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. If not managed diligently, this structure can incentivize less cost-conscious behavior. Mitigation strategies include rigorous government oversight of all incurred costs, clear definitions of allowable expenses, regular audits, and a well-defined scope of work. The fixed fee itself acts as a ceiling for the contractor's profit, but the total cost can still escalate. Effective communication, detailed reporting requirements, and strong contract administration are crucial for mitigating these risks and ensuring the government receives value.

What is the expected impact of this contract on the Department of the Navy's ability to achieve its recruitment and public outreach goals?

This contract is expected to significantly enhance the Department of the Navy's ability to achieve its recruitment and public outreach goals by leveraging professional advertising expertise. The sustained, multi-year engagement allows for the development and execution of comprehensive, strategic campaigns designed to reach target demographics effectively. Professional advertising services can improve messaging clarity, broaden reach through optimized media placement, and enhance brand perception. The success of these goals will ultimately depend on the quality of the creative content, the effectiveness of the media strategy, and the alignment of the campaigns with the Navy's evolving objectives.

How has federal spending on advertising services evolved over the past decade, and where does this contract fit within that trend?

Federal spending on advertising services has generally remained a consistent, albeit significant, component of agency budgets, particularly for departments focused on recruitment (like Defense) and public information campaigns. Over the past decade, there has been a trend towards more data-driven and digitally focused advertising strategies. This $22.5 million contract, awarded in late 2008 for a period extending into 2012, reflects a substantial, long-term investment typical for major federal entities during that era. It fits within the trend of agencies utilizing large, experienced firms to manage complex, nationwide campaigns, likely incorporating a mix of traditional and emerging media channels relevant at the time.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Advertising, Public Relations, and Related Services › Advertising Agencies

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M0026407R0009

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: WPP PLC (UEI: 232931092)

Address: 10 GLENLAKE PKWY NE B, ATLANTA, GA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,541,950

Exercised Options: $22,541,950

Current Obligation: $22,541,950

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M0026408D0001

IDV Type: IDC

Timeline