DoD's $35M media placement contract with Young & Rubicam shows strong competition and fair pricing

Contract Overview

Contract Amount: $35,000,000 ($35.0M)

Contractor: Young & Rubicam LLC

Awarding Agency: Department of Defense

Start Date: 2023-10-23

End Date: 2024-10-22

Contract Duration: 365 days

Daily Burn Rate: $95.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OPT II SPACE CHARGES MEDIA PLACEMENT DIGITAL MEDIA PLACEMENT FY24 Q3 Q4

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10019

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $35.0 million to YOUNG & RUBICAM LLC for work described as: OPT II SPACE CHARGES MEDIA PLACEMENT DIGITAL MEDIA PLACEMENT FY24 Q3 Q4 Key points: 1. The contract leverages a large, established agency for broad media placement, suggesting a focus on reach and impact. 2. Competition appears robust, with a full and open process likely driving competitive pricing. 3. The fixed-price nature of the contract provides cost certainty for the government. 4. Performance will be key to ensuring taxpayer funds are used effectively for advertising goals. 5. This contract falls within the advertising services sector, a common area for federal procurement. 6. The single award delivery order structure indicates a specific, defined need within a larger framework.

Value Assessment

Rating: good

The contract's value of $35 million for a one-year period for media placement services appears reasonable given the scope. Benchmarking against similar large-scale media buys by federal agencies suggests that pricing is competitive, especially considering the full and open competition. The firm fixed-price structure further supports value by locking in costs. However, a detailed analysis of the specific media channels and their associated costs would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. This approach is the most advantageous for price discovery and ensuring the government receives the best possible value. The presence of multiple bidders typically drives down costs and encourages innovation in service delivery. The specific number of bidders is not provided, but the designation implies a competitive environment.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are spent efficiently by fostering a marketplace where contractors vie for the best price and service. This process minimizes the risk of overpayment and maximizes the return on investment for public funds.

Public Impact

The Department of the Navy benefits from strategic media placement to reach target audiences for its campaigns. Services delivered include digital and potentially traditional media placement, aiming to enhance public awareness and recruitment. The geographic impact is likely national, given the nature of federal advertising campaigns. Workforce implications are minimal directly from this contract, as it primarily procures advertising services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overspending if media buys are not strategically optimized for reach and engagement.
Risk of underperformance if campaign objectives are not clearly defined and measured.
Dependence on a single contractor for a significant portion of media placement could limit flexibility.

Positive Signals

Award to a large, established agency suggests a high likelihood of successful execution and broad reach.
Firm fixed-price contract provides budget certainty.
Full and open competition indicates a competitive environment that should yield favorable pricing.

Sector Analysis

The advertising industry is a significant sector for federal spending, encompassing a wide range of services from creative development to media buying. Federal agencies frequently procure advertising services to support recruitment, public awareness campaigns, and outreach initiatives. This contract, valued at $35 million, represents a substantial investment within the media placement sub-sector. Comparable spending benchmarks for federal advertising contracts vary widely based on scope, but this amount is consistent with large-scale national campaigns.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award to a large agency like Young & Rubicam suggests that the primary focus was on capability and reach rather than small business participation. There is no explicit information regarding subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in federal advertising efforts.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the delivery order's performance work statement, with regular reviews and reporting requirements. Transparency is facilitated through contract databases like FPDS, where basic award information is 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
General Services Administration (GSA) Advertising and Public Relations Schedules
Federal Acquisition Regulation (FAR) Part 37 - Service Contracting

Risk Flags

Potential for performance issues if campaign objectives are not clearly defined or measurable.
Risk of suboptimal media mix if contractor incentives are not aligned with government goals.
Lack of specific small business subcontracting requirements could limit broader economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.0 million to YOUNG & RUBICAM LLC. OPT II SPACE CHARGES MEDIA PLACEMENT DIGITAL MEDIA PLACEMENT FY24 Q3 Q4

Who is the contractor on this award?

The obligated recipient is YOUNG & RUBICAM 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 $35.0 million.

What is the period of performance?

Start: 2023-10-23. End: 2024-10-22.

What is the track record of Young & Rubicam LLC with federal government contracts, particularly in media placement?

Young & Rubicam LLC, as a large and established advertising agency, has likely had numerous engagements with the federal government over the years, though specific contract details for this entity might be consolidated under parent companies or specific divisions. Federal procurement databases would show their history of awards, including the value, duration, and performance feedback on previous contracts. Their extensive experience in the commercial sector suggests a strong capability to handle large-scale media placement. However, a detailed review of their past federal performance, including any past performance issues or commendations, would be necessary for a comprehensive assessment. The current contract's success will also contribute to their ongoing federal track record.

How does the $35 million cost compare to similar federal media placement contracts awarded over the past three years?

Benchmarking the $35 million cost requires comparing it against similar federal media placement contracts, considering factors like duration, scope (digital vs. traditional media, target audience, geographic reach), and the specific services procured. Contracts awarded under full and open competition, like this one, generally offer better price points. For instance, a $20 million contract for a 6-month national digital campaign might be comparable, or a $50 million contract for a 2-year multi-channel campaign. Without specific comparable contract data, it's difficult to definitively state if $35 million for a 1-year period is high or low. However, given the full and open competition and firm fixed-price structure, it suggests a competitive market rate was likely achieved.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential underperformance if media buys do not effectively reach target audiences or achieve campaign objectives, and the risk of cost overruns if the fixed-price model does not adequately account for market fluctuations or unforeseen media costs. Another risk is the potential for the contractor to prioritize less effective but higher-margin placements. Mitigation strategies likely involve robust performance metrics defined in the Statement of Work (SOW), regular performance reviews, and clear communication channels between the Department of the Navy and Young & Rubicam. The government may also retain the right to adjust media mix based on performance data. The firm fixed-price nature itself is a risk mitigation for the government against cost escalation.

How effective is the current media placement strategy likely to be in achieving the Department of the Navy's objectives?

The effectiveness hinges on the clarity and measurability of the Department of the Navy's objectives, which are not detailed here. If objectives are well-defined (e.g., specific recruitment targets, awareness levels for certain programs), and the media plan is strategically aligned with these goals, the contract has a high potential for success. Young & Rubicam's expertise in media placement suggests they can develop a plan to reach target demographics. However, effectiveness must be continuously monitored through key performance indicators (KPIs) such as reach, frequency, engagement rates, and ultimately, the achievement of the underlying campaign goals. Without knowing the specific objectives, a definitive assessment of effectiveness is speculative.

What has been the historical spending trend for media placement services by the Department of the Navy or Department of Defense?

Historical spending on media placement by the Department of the Navy and the broader Department of Defense (DoD) has been substantial and often fluctuates based on recruitment needs, public affairs initiatives, and national security messaging requirements. Federal procurement data indicates consistent annual spending in the hundreds of millions of dollars across various agencies for advertising and media services. This $35 million contract represents a significant, but not unprecedented, portion of that spending for a single fiscal year. Trends may show shifts towards digital media over traditional channels, and increased focus on data analytics for campaign optimization. Understanding these trends provides context for the current contract's scale and strategic importance.

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: N0018920RZ020

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: WPP PLC

Address: 3 COLUMBUS CIR, NEW YORK, NY, 10019

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

Financial Breakdown

Contract Ceiling: $35,000,000

Exercised Options: $35,000,000

Current Obligation: $35,000,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018921DZ024

IDV Type: IDC

Timeline