Department of the Army awarded $27.4M for creative development and brand campaigns to DDB Chicago Inc

Contract Overview

Contract Amount: $27,425,611 ($27.4M)

Contractor: DDB Chicago Inc.

Awarding Agency: Department of Defense

Start Date: 2021-12-19

End Date: 2022-12-18

Contract Duration: 364 days

Daily Burn Rate: $75.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: FY22 CREATIVE DEVELOPMENT & PRODUCTION. BRAND CAMPAIGN CPFF

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60601

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $27.4 million to DDB CHICAGO INC. for work described as: FY22 CREATIVE DEVELOPMENT & PRODUCTION. BRAND CAMPAIGN CPFF Key points: 1. The contract utilized a Cost Plus Fixed Fee (CPFF) pricing structure, which can lead to cost overruns if not carefully managed. 2. Awarded via full and open competition, suggesting a robust market for these services. 3. The duration of 364 days indicates a focused, project-based need for creative services. 4. The contract falls under the Advertising Agencies NAICS code, placing it within the broader marketing and communications sector. 5. The single delivery order suggests a specific campaign or project rather than an ongoing service requirement.

Value Assessment

Rating: fair

The contract's value of $27.4 million for a one-year period for creative development and brand campaigns appears to be within a reasonable range for large-scale federal advertising efforts. However, without specific deliverables or campaign scope, a precise value-for-money assessment is challenging. The CPFF structure introduces potential for costs to exceed initial estimates, necessitating close oversight. Benchmarking against similar large-scale federal brand campaigns would provide further context on pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but this method generally fosters competitive pricing and encourages contractors to offer their best value. The open competition suggests that the Department of the Army sought a wide range of creative solutions and competitive proposals.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down costs and ensures the government receives high-quality services at a fair price. It also promotes transparency and reduces the risk of favoritism.

Public Impact

The Department of the Army benefits from enhanced brand awareness and public perception through targeted creative development and production. The contract supports the delivery of marketing and advertising services crucial for communicating military initiatives and recruitment efforts. The primary geographic impact is likely within the United States, supporting national-level brand campaigns. The contract supports the creative services workforce, including advertising professionals, designers, and production specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contracts can incentivize higher spending by the contractor as profit is tied to costs.
Lack of specific performance metrics makes it difficult to assess the effectiveness of the creative output.
The broad nature of 'creative development and production' could lead to scope creep if not tightly managed.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
The contract is for a defined period, suggesting a clear project scope.
The contractor, DDB Chicago Inc., is a well-established advertising agency with experience.

Sector Analysis

The advertising and marketing industry is a significant sector supporting government communications. Federal agencies, particularly large ones like the Department of Defense, rely on specialized agencies for brand building, public relations, and recruitment campaigns. Spending in this sector often fluctuates based on agency needs for public outreach, policy promotion, and talent acquisition. Comparable spending benchmarks would involve analyzing other large federal advertising contracts awarded to major agencies.

Small Business Impact

This contract was awarded to DDB Chicago Inc. and there is no indication of a small business set-aside. Therefore, the direct impact on small businesses through this specific award is likely minimal. However, the prime contractor may engage small businesses as subcontractors for specialized services, though this is not explicitly stated in the provided data. Further analysis of subcontracting plans would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Performance monitoring, invoice review, and adherence to contract terms are key oversight functions. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Advertising and Public Relations
Federal Brand Campaign Contracts
Creative Services Procurement
Marketing and Communications Services

Risk Flags

Potential for cost overruns due to CPFF structure
Lack of specific performance metrics for creative output
Scope creep risk in undefined creative development

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.4 million to DDB CHICAGO INC.. FY22 CREATIVE DEVELOPMENT & PRODUCTION. BRAND CAMPAIGN CPFF

Who is the contractor on this award?

The obligated recipient is DDB CHICAGO INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $27.4 million.

What is the period of performance?

Start: 2021-12-19. End: 2022-12-18.

What specific creative services were delivered under this contract?

The contract data indicates 'CREATIVE DEVELOPMENT & PRODUCTION. BRAND CAMPAIGN CPFF' as the purpose. This broadly covers the creation of advertising concepts, design, copywriting, and production of various media (e.g., digital ads, print, video) for brand campaigns. However, the specific deliverables, target audiences, and campaign objectives are not detailed in the provided summary. A deeper dive into the contract statement of work (SOW) would be necessary to understand the precise nature of the creative output and its intended impact for the Department of the Army.

How does the $27.4 million cost compare to similar federal brand campaign contracts?

Benchmarking this $27.4 million contract against similar federal brand campaign contracts requires access to a broader dataset of comparable awards. Large-scale federal advertising campaigns can vary significantly in cost based on scope, duration, media channels, and the specific agency's needs. For instance, a multi-year, multi-channel campaign for a major agency like the Department of Defense could easily reach tens of millions of dollars. Without specific details on the campaign's reach and objectives, it's difficult to definitively state if this represents excellent or questionable value. However, the CPFF structure warrants scrutiny for potential cost efficiencies compared to fixed-price contracts if scope is well-defined.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for creative services?

The primary risk with a CPFF contract for creative services is the potential for cost overruns. Since the contractor is reimbursed for allowable costs plus a fixed fee representing profit, there can be less incentive to control costs compared to fixed-price contracts. If the scope of creative development is not meticulously defined and managed, the contractor may incur higher costs than anticipated, leading to a higher final contract price. This necessitates robust oversight from the government to ensure costs are reasonable and allocable, and that the fixed fee remains appropriate for the work performed. Scope creep is a significant concern that can inflate costs under this structure.

What is the track record of DDB Chicago Inc. in performing federal contracts?

DDB Chicago Inc. is a well-established advertising agency with a significant history of commercial work. While specific details on their federal contract performance history are not provided in this summary, their selection for a large Department of the Army contract suggests they possess the necessary qualifications and experience. Federal agencies typically conduct thorough vetting of potential contractors, including reviewing past performance. Further investigation into federal procurement databases could reveal the extent and nature of their previous government engagements and performance ratings.

What does the 'Advertising Agencies' NAICS code (541810) imply about this spending?

The North American Industry Classification System (NAICS) code 541810, 'Advertising Agencies,' signifies that this contract is for services related to planning and executing advertising campaigns. This includes activities such as market research, media buying, creative strategy development, copywriting, graphic design, and production of advertising materials across various media. Spending under this code by federal agencies is typically for promoting public awareness, recruitment, public health initiatives, or other communication objectives. It places this contract within the broader professional services sector focused on marketing and communications.

How does the duration of 364 days impact the assessment of this contract?

A contract duration of 364 days, essentially one year, suggests a focused and project-specific need for creative development and brand campaign services. This timeframe is typical for discrete marketing initiatives or annual campaign cycles. It implies that the Department of the Army likely had a defined objective for this period, rather than an ongoing, indefinite need for creative support. This duration allows for planning, execution, and initial evaluation of the campaign's impact within a manageable timeframe, potentially reducing the risk of long-term cost commitments if the campaign's effectiveness is not sustained.

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: W9124D16R0046

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 225 N MICHIGAN AVE FL 10, CHICAGO, IL, 60601

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

Financial Breakdown

Contract Ceiling: $27,425,611

Exercised Options: $27,425,611

Current Obligation: $27,425,611

Actual Outlays: $4,700,793

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $8,637,369

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9124D19D0001

IDV Type: IDC

Timeline