DHS awarded $13.7M to The Advertising Council Inc. for advertising services over 10 years

Contract Overview

Contract Amount: $13,764,902 ($13.8M)

Contractor: THE Advertising Council Inc

Awarding Agency: Department of Homeland Security

Start Date: 2004-08-05

End Date: 2014-09-24

Contract Duration: 3,702 days

Daily Burn Rate: $3.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: ADVERTISING SERVICES

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10016

State: New York Government Spending

Plain-Language Summary

Department of Homeland Security obligated $13.8 million to THE ADVERTISING COUNCIL INC for work described as: ADVERTISING SERVICES Key points: 1. Contract awarded on a cost-plus fixed fee basis, which can lead to cost overruns if not managed carefully. 2. The contract spans a decade, indicating a long-term need for advertising services. 3. The sole contractor, The Advertising Council Inc., has held this contract for its entire duration. 4. The contract was not competed, raising questions about potential cost savings and market fairness. 5. Services provided fall under the 'Advertising Agencies' NAICS code. 6. The contract was awarded by the Office of Procurement Operations within DHS.

Value Assessment

Rating: questionable

Given the 10-year duration and lack of competition, it is difficult to benchmark the value for money without more detailed cost breakdowns. The cost-plus fixed fee structure necessitates robust oversight to ensure efficiency. Comparing this to similar long-term advertising contracts would be beneficial, but the sole-source nature limits direct comparisons for pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, meaning only one vendor, The Advertising Council Inc., was awarded the work. This lack of competition prevents market forces from driving down prices and limits the government's ability to explore alternative solutions or pricing structures offered by other qualified vendors.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the most cost-effective advertising services available, as there was no pressure for the contractor to offer competitive pricing.

Public Impact

The primary beneficiary is The Advertising Council Inc., which received a decade-long contract. The services delivered are advertising and related activities, supporting the Department of Homeland Security's public outreach and messaging. The geographic impact is primarily centered in New York, where the contractor is located. The contract supports a specific business within the advertising sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a 10-year contract raises concerns about sustained value and potential for price increases over time.
Cost-plus fixed fee contracts require diligent oversight to prevent contractor inefficiencies from inflating costs.
The sole-source nature limits opportunities for small businesses to compete for this significant advertising spend.

Positive Signals

The Advertising Council Inc. has a long-standing relationship with DHS, suggesting a level of established trust and understanding of agency needs.
The contract's long duration indicates a consistent and potentially reliable source of advertising services for the agency.

Sector Analysis

The advertising industry is a dynamic sector with numerous agencies capable of providing a wide range of services. This contract represents a significant, long-term commitment to a single provider within the advertising services market. Comparable spending benchmarks for long-term, sole-source advertising contracts are difficult to establish due to the unique nature of this award.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. The sole-source nature limits opportunities for small businesses to participate in this significant advertising expenditure, potentially excluding them from a substantial contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security's contracting officers and program managers. The cost-plus fixed fee structure necessitates rigorous monitoring of costs and performance to ensure accountability. Transparency regarding specific deliverables and cost justifications would be key to assessing accountability.

Related Government Programs

DHS Advertising Contracts
Federal Advertising Services
Long-Term Government Contracts
Sole-Source Procurements

Risk Flags

Sole-source award
Long contract duration (10 years)
Cost-plus fixed fee payment type

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $13.8 million to THE ADVERTISING COUNCIL INC. ADVERTISING SERVICES

Who is the contractor on this award?

The obligated recipient is THE ADVERTISING COUNCIL INC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $13.8 million.

What is the period of performance?

Start: 2004-08-05. End: 2014-09-24.

What is the track record of The Advertising Council Inc. in performing services for the Department of Homeland Security under this contract?

The Advertising Council Inc. has held this sole-source contract with the Department of Homeland Security since its inception in August 2004, continuing through September 2014. This decade-long tenure suggests a consistent, albeit non-competed, performance history. Without access to performance reviews or specific task order details, it's challenging to provide a granular assessment of their track record. However, the renewal and continuation of the contract over such an extended period imply a baseline level of satisfaction or necessity from the agency's perspective. Further investigation into any documented performance issues or commendations would be required for a comprehensive evaluation.

How does the value of this contract compare to similar advertising services procured by the federal government?

Direct value comparison is challenging due to the contract's unique characteristics: a 10-year duration and a sole-source award. Most federal advertising contracts are competed and have shorter base periods with option years. The total value of $13.7 million over a decade averages to approximately $1.37 million per year. This annual figure might be comparable to some agency-specific advertising buys. However, the lack of competition means this contract likely did not benefit from the price reductions typically achieved through competitive bidding. Benchmarking against other sole-source, long-term service contracts, rather than competed ones, might offer a more relevant, though still imperfect, comparison.

What are the primary risks associated with this sole-source, cost-plus fixed fee contract?

The primary risks stem from the contract's structure. The sole-source nature eliminates competitive pressure, potentially leading to higher costs than a competed contract and limiting the government's ability to explore innovative or more cost-effective solutions. The cost-plus fixed fee (CPFF) payment type carries inherent risks of cost escalation if the contractor's costs exceed projections; while the 'fixed fee' provides some certainty on profit, the 'cost-plus' aspect means the government bears the risk of increased direct costs. Without robust oversight and detailed cost tracking, there's a risk of inefficiency and overspending. Additionally, the long 10-year duration increases the risk of the services becoming outdated or misaligned with evolving agency needs without a mechanism for re-evaluation.

How effective has this contract been in meeting the Department of Homeland Security's advertising needs over its 10-year span?

Assessing the effectiveness is difficult without specific performance metrics and campaign outcomes tied to this contract. The contract's purpose is to provide advertising services, presumably to support DHS's mission-related communications, public awareness campaigns, or recruitment efforts. The fact that it was continuously awarded for 10 years suggests it met the agency's perceived needs during that period. However, the lack of competition and the CPFF structure mean that 'effectiveness' in terms of achieving specific communication goals at the best possible price is not guaranteed. A thorough evaluation would require analyzing the specific campaigns executed, their reach, impact, and alignment with DHS objectives, alongside a cost-benefit analysis.

What are the historical spending patterns for advertising services within the Department of Homeland Security?

This specific contract represents a significant portion of DHS's historical spending on advertising services, particularly given its 10-year duration and sole-source nature. While $13.7 million over a decade averages to about $1.37 million annually, DHS likely engages in other advertising procurements through different mechanisms, including competed contracts and task orders under larger vehicles. Understanding the broader pattern would require analyzing all DHS advertising expenditures across various contracts and fiscal years. This single contract highlights a long-term, non-competitive commitment to one provider, which may differ from the agency's overall strategy for procuring advertising services, which often favors competitive approaches for better value.

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: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 261 MADISON AVE FL 11, NEW YORK, NY, 90

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,764,902

Exercised Options: $13,764,902

Current Obligation: $13,764,902

Contract Characteristics

Multi-Year Contract: Yes

Timeline