DoD's $47.4M Wunderman Thompson Advertising Contract: Full & Open Competition

Contract Overview

Contract Amount: $47,403,912 ($47.4M)

Contractor: Wunderman Thompson LLC

Awarding Agency: Department of Defense

Start Date: 2008-12-09

End Date: 2012-09-30

Contract Duration: 1,391 days

Daily Burn Rate: $34.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO 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 $47.4 million to WUNDERMAN THOMPSON LLC for work described as: MCRC ADVERTISING SERVICES; OPTION ONE Key points: 1. Significant contract value of $47.4M for advertising services. 2. Awarded to Wunderman Thompson LLC under full and open competition. 3. Contract duration of 1391 days indicates a substantial, long-term need. 4. The 'COST NO FEE' pricing structure requires careful monitoring for value. 5. Sector: Advertising Agencies (NAICS 541810).

Value Assessment

Rating: fair

The 'COST NO FEE' pricing structure is unusual and requires close scrutiny to ensure fair value is obtained. Without a clear cost breakdown, it's difficult to benchmark against similar contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which generally promotes competitive pricing. However, the 'COST NO FEE' structure may limit price discovery and potentially obscure true costs.

Taxpayer Impact: Taxpayer funds are being used for advertising services. The effectiveness and efficiency of the spending will determine the ultimate taxpayer impact.

Public Impact

Public funds are allocated for advertising campaigns by the Department of Defense. The contract supports the Department of the Navy's communication and outreach efforts. Transparency in how these funds are utilized for advertising is crucial for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of cost transparency due to 'COST NO FEE' pricing.
Potential for inflated costs if not managed rigorously.
Difficulty in benchmarking value without detailed cost data.

Positive Signals

Awarded via full and open competition.
Long-term contract indicates a sustained requirement.
Managed by a reputable agency (Wunderman Thompson).

Sector Analysis

The advertising industry is competitive, with agencies offering a wide range of services. DoD spending in this sector is typical for public outreach and recruitment efforts. Benchmarks for similar government advertising contracts vary widely based on scope and duration.

Small Business Impact

The contract was awarded to Wunderman Thompson LLC, a large business. There is no indication of specific provisions or set-asides for small businesses within this award, suggesting limited direct impact on the small business sector for this specific contract.

Oversight & Accountability

Oversight would typically involve contract performance reviews, financial audits, and ensuring adherence to the terms of service. The 'COST NO FEE' structure necessitates particularly diligent oversight to ensure value for money.

Related Government Programs

Advertising Agencies
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Lack of cost transparency.
Ambiguous pricing structure ('COST NO FEE').
Potential for reduced competition if 'fee' is not clearly defined.
Difficulty in assessing contractor profit and value.
Requires enhanced oversight due to pricing model.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.4 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 $47.4 million.

What is the period of performance?

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

What specific advertising services are covered under this 'COST NO FEE' contract, and how is the agency's profit margin determined?

The 'COST NO FEE' structure implies that the contractor absorbs all costs associated with delivering the service and receives a pre-determined fee, which is the 'no fee' part. However, this phrasing is ambiguous. Typically, contracts specify a fee or profit margin. Without further details, it's unclear how Wunderman Thompson's profit is calculated or if it's truly zero, which is unlikely. This requires clarification to assess value.

How does the Department of Defense ensure that the 'COST NO FEE' structure does not lead to inflated indirect costs or reduced service quality?

The DoD must implement rigorous oversight mechanisms, including regular performance reviews, audits of the contractor's financial records (if permissible under the contract terms), and clear performance metrics. They should also compare the outcomes and value delivered against industry standards and potentially other government contracts, even if the pricing structure differs.

What is the strategic objective of this $47.4M advertising contract, and how is its effectiveness measured?

The strategic objective likely relates to enhancing public perception, supporting recruitment, or communicating key messages for the Department of the Navy. Effectiveness would be measured through key performance indicators (KPIs) such as campaign reach, engagement rates, message recall, brand sentiment analysis, and potentially impact on recruitment numbers or public opinion surveys, depending on the campaign goals.

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 NO FEE (S)

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: $47,403,912

Exercised Options: $47,403,912

Current Obligation: $47,403,912

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M0026408D0001

IDV Type: IDC

Timeline