DoD's $22.6M Wunderman Thompson Contract for Brand Messaging Raises Questions on Value and Competition

Contract Overview

Contract Amount: $22,619,419 ($22.6M)

Contractor: Wunderman Thompson LLC

Awarding Agency: Department of Defense

Start Date: 2017-06-16

End Date: 2018-06-18

Contract Duration: 367 days

Daily Burn Rate: $61.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF, BRAND MESSAGING (COMPLETION)

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.6 million to WUNDERMAN THOMPSON LLC for work described as: IGF::OT::IGF, BRAND MESSAGING (COMPLETION) Key points: 1. Significant contract value of $22.6 million for brand messaging services. 2. Competition method was 'Full and Open', suggesting broad market access. 3. Potential risk associated with 'Cost Plus Fixed Fee' pricing structure. 4. Services fall under Advertising Agencies sector, with a benchmark of $6,163,300. 5. Contract awarded as a Delivery Order under a larger agreement.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee structure can incentivize cost overruns, potentially leading to higher-than-necessary spending. Without detailed cost breakdowns, it's difficult to assess if the $22.6 million is a fair price compared to similar large-scale brand messaging campaigns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The 'Full and Open Competition' method is positive, indicating multiple vendors had the opportunity to bid. However, the 'Cost Plus Fixed Fee' pricing might have limited the focus on price discovery, potentially allowing for less competitive pricing than a fixed-price contract.

Taxpayer Impact: The use of a Cost Plus Fixed Fee contract may lead to higher taxpayer costs if not carefully managed and monitored for efficiency and necessity of expenditures.

Public Impact

Taxpayers may be footing a potentially inflated bill due to the pricing structure. The effectiveness of brand messaging campaigns can be subjective and hard to quantify, making value assessment challenging. Transparency in how the 'fixed fee' component was determined is crucial for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee pricing
Potential for cost overruns
Difficulty in quantifying ROI for brand messaging

Positive Signals

Full and Open Competition
Awarded by Department of Defense

Sector Analysis

This contract falls within the Advertising Agencies sector. The benchmark for this sector is $6,163,300, making the $22.6 million contract significantly larger than the typical spending, warranting closer scrutiny.

Small Business Impact

The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The contract was awarded as a Delivery Order, suggesting it's part of a larger framework agreement. Oversight would focus on the management of this specific order and its alignment with the parent contract's objectives and cost controls.

Related Government Programs

Advertising Agencies
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Fixed Fee pricing structure
High contract value relative to sector benchmark
Potential for cost overruns
Difficulty in objectively measuring ROI for brand messaging

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.6 million to WUNDERMAN THOMPSON LLC. IGF::OT::IGF, BRAND MESSAGING (COMPLETION)

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 $22.6 million.

What is the period of performance?

Start: 2017-06-16. End: 2018-06-18.

How was the 'fixed fee' component determined in this Cost Plus Fixed Fee contract to ensure it represented fair value for the services rendered?

The determination of the 'fixed fee' in a Cost Plus Fixed Fee contract typically involves negotiation between the government and the contractor. It aims to provide the contractor with a reasonable profit margin while incentivizing efficient performance. Factors considered often include the complexity of the work, estimated direct costs, and market rates for similar services. Without access to the specific negotiation details and cost proposals, it's challenging to definitively assess if this fee was optimal.

What specific metrics were used to measure the success and effectiveness of the brand messaging campaign funded by this $22.6 million contract?

Measuring the effectiveness of brand messaging campaigns can be complex, often involving metrics like brand awareness surveys, media impressions, social media engagement, website traffic, and lead generation. The government agency awarding the contract should have established Key Performance Indicators (KPIs) and reporting requirements to track these metrics. The success of the campaign would be evaluated against these pre-defined objectives to determine if the significant investment yielded the desired outcomes.

Given the 'Full and Open Competition', were there any specific requirements or evaluation criteria that might have inadvertently limited the pool of highly qualified, yet potentially more cost-effecti

While 'Full and Open Competition' is designed to maximize bidder participation, the specific requirements and evaluation criteria set forth in the solicitation can influence the outcome. If the criteria were overly stringent or focused heavily on factors other than cost-effectiveness (e.g., extensive past performance in a niche area), it could potentially exclude some capable vendors who might offer more competitive pricing. A review of the original solicitation documents would be necessary to assess this.

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: M0026414R0020

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vmly and R Enterprise (UEI: 218784436)

Address: 3630 PEACHTREE RD NE STE 1200, ATLANTA, GA, 30326

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,619,419

Exercised Options: $22,619,419

Current Obligation: $22,619,419

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: M0026415D0008

IDV Type: IDC

Timeline