DoD's $93.8M advertising contract to Wunderman Thompson LLC awarded under full and open competition

Contract Overview

Contract Amount: $93,798,638 ($93.8M)

Contractor: Wunderman Thompson LLC

Awarding Agency: Department of Defense

Start Date: 2010-11-18

End Date: 2011-11-30

Contract Duration: 377 days

Daily Burn Rate: $248.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: MCRC ADV SERVICES - ODC

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $93.8 million to WUNDERMAN THOMPSON LLC for work described as: MCRC ADV SERVICES - ODC Key points: 1. The contract value represents a significant investment in advertising services for the Department of the Navy. 2. Full and open competition suggests a potentially competitive pricing environment. 3. The contract duration of 377 days indicates a medium-term engagement for advertising services. 4. The cost-plus-fixed-fee pricing structure may incentivize contractor efficiency while managing costs. 5. The award to a single contractor, Wunderman Thompson LLC, highlights their position in the federal advertising market. 6. The absence of small business set-aside flags suggests the primary contractor is not a small business.

Value Assessment

Rating: fair

Benchmarking the value of this $93.8 million contract is challenging without specific deliverables or performance metrics. However, for a nearly year-long advertising campaign for a major federal agency, the amount is substantial. Comparing it to other large-scale federal advertising contracts would be necessary for a more precise value assessment. The cost-plus-fixed-fee structure means the government pays the actual costs plus a predetermined fee, which can sometimes lead to higher overall costs if not managed tightly.

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. This process typically involves a solicitation where multiple advertising agencies could compete. The number of bidders is not specified, but the competitive nature of the process is intended to drive down prices and ensure the government receives the best value.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a marketplace where multiple firms vie for the contract, potentially leading to more cost-effective advertising solutions and preventing price gouging.

Public Impact

The primary beneficiaries are the Department of the Navy and its various branches, receiving advertising and marketing support. Services delivered include advertising campaigns, creative development, media planning, and potentially market research. The geographic impact is likely nationwide, focusing on recruitment and public awareness campaigns for the Navy. Workforce implications may include employment opportunities within Wunderman Thompson LLC and its subcontractors, as well as potential impacts on military recruitment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus-fixed-fee contracts if not rigorously monitored.
Lack of specific performance metrics makes it difficult to assess the true effectiveness and value for money.
The large contract value could indicate a significant reliance on a single vendor, potentially limiting future flexibility.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
The fixed fee component provides some cost certainty for the government.
The contractor, Wunderman Thompson LLC, is likely an established player with experience in large-scale advertising.

Sector Analysis

The advertising industry is a dynamic sector encompassing creative development, media buying, and strategic planning. Federal agencies, particularly those in defense and recruitment, often utilize advertising services to reach target audiences. This contract falls within the professional services category, specifically advertising agencies (NAICS code 541810). Comparable spending benchmarks would involve looking at other large federal advertising contracts, especially those for recruitment or public affairs.

Small Business Impact

The contract details indicate that this was not a small business set-aside, and the 'sb' field is false. This suggests that the primary contract was not specifically reserved for small businesses. While Wunderman Thompson LLC may be a large entity, there could be opportunities for small businesses to participate as subcontractors, depending on the scope of work and the prime contractor's subcontracting plan. Further analysis of subcontracting reports would be needed to determine the extent of small business involvement.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, including adherence to the scope of work, budget limitations, and delivery schedules. Transparency is generally facilitated through contract award databases like FPDS, though detailed performance reports may not always be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Advertising and Public Relations Contracts
Federal Agency Recruitment Advertising
Marketing and Media Services for Government Agencies
Navy Public Affairs Support Contracts

Risk Flags

Cost-Plus contract type requires diligent oversight to manage potential cost overruns.
Lack of specific performance metrics makes value assessment challenging.
Contract duration and value indicate significant reliance on a single vendor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $93.8 million to WUNDERMAN THOMPSON LLC. MCRC ADV SERVICES - ODC

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 $93.8 million.

What is the period of performance?

Start: 2010-11-18. End: 2011-11-30.

What specific advertising campaigns or initiatives did this contract support for the Department of the Navy?

The provided data does not specify the exact campaigns or initiatives supported by this $93.8 million contract. However, contracts of this magnitude for the Department of the Navy typically encompass a broad range of activities. These often include recruitment advertising aimed at attracting new service members across various branches (e.g., Navy, Marines), public awareness campaigns to inform the public about naval capabilities and missions, and internal communication efforts. The services likely involved creative development, media planning and buying across various platforms (digital, print, broadcast), market research, and performance tracking to optimize campaign effectiveness. Without access to the contract's statement of work or performance reports, the precise nature of the supported initiatives remains undisclosed in the summary data.

How does the $93.8 million contract value compare to typical federal advertising spending for a single agency over a similar period?

The $93.8 million contract value for advertising services awarded to Wunderman Thompson LLC by the Department of the Navy is substantial. Federal spending on advertising can vary significantly based on agency mission, recruitment needs, and public outreach goals. For a large entity like the Department of Defense, particularly the Navy, significant investments in advertising are common for recruitment and public relations. While specific benchmarks are difficult without knowing the exact period and scope, this figure suggests a major, comprehensive advertising effort. For context, other large federal agencies or departments with significant public-facing roles or recruitment mandates might have similar or even larger annual advertising budgets. However, this single contract represents a considerable portion of potential annual spending for a specific period, indicating a high level of investment in marketing and communication.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract of this size?

Cost Plus Fixed Fee (CPFF) contracts, like the one awarded to Wunderman Thompson LLC for $93.8 million, carry inherent risks for the government. The primary risk is that the contractor may have less incentive to control costs compared to fixed-price contracts, as the government agrees to pay all allowable costs plus a predetermined fee. If the contractor's cost estimation is inaccurate or if unforeseen expenses arise, the total cost to the government could exceed initial projections, even though the fee remains fixed. Effective oversight and rigorous auditing of incurred costs are crucial to mitigate this risk. Additionally, defining 'allowable costs' and ensuring they align with the contract's objectives requires careful management to prevent scope creep or unnecessary expenditures. The fixed fee itself, while providing some predictability, could also be seen as a profit margin that might be higher than necessary if the contractor's actual effort is less than anticipated.

What is the track record of Wunderman Thompson LLC in handling large federal advertising contracts?

Wunderman Thompson LLC is a well-established global advertising and marketing agency with a significant presence in the commercial sector. While the provided data confirms their award of this $93.8 million Department of the Navy contract, a comprehensive assessment of their federal track record would require examining their past performance on other government contracts. This would involve looking at contract history, client feedback, any past performance evaluations, and potentially any disputes or challenges encountered on previous federal engagements. Given the size and nature of this award, it suggests they possess the capacity and experience to manage large-scale federal advertising requirements. However, specific details about their historical performance within the federal space, beyond this single award, are not detailed in the provided summary data.

How does the 'Advertising Agencies' NAICS code (541810) typically align with federal spending patterns?

The 'Advertising Agencies' NAICS code (541810) encompasses establishments primarily engaged in creating advertising campaigns and placing such advertising in periodicals, newspapers, radio and television, or other media. Federal spending under this code is common across various agencies that require public outreach, recruitment, and public relations services. Departments like Defense (for recruitment and public awareness), Health and Human Services (for public health campaigns), and Transportation (for safety initiatives) frequently utilize these services. Spending patterns within this sector can fluctuate based on government priorities, budget allocations, and the specific needs for communication. Contracts can range from small, project-specific campaigns to large, multi-year, multi-million dollar engagements like the one awarded to Wunderman Thompson LLC, reflecting the diverse communication needs of the federal government.

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: 3630 PEACHTREE RD NE STE 1200, ATLANTA, GA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $93,798,638

Exercised Options: $93,798,638

Current Obligation: $93,798,638

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M0026408D0001

IDV Type: IDC

Timeline