DoD's $28.1M creative production contract awarded to DDB Chicago Inc. for advertising services

Contract Overview

Contract Amount: $28,120,530 ($28.1M)

Contractor: DDB Chicago Inc.

Awarding Agency: Department of Defense

Start Date: 2022-12-19

End Date: 2023-12-19

Contract Duration: 365 days

Daily Burn Rate: $77.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: FY23 CREATIVE PRODUCTION AND DEVELOPMENT

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60601

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $28.1 million to DDB CHICAGO INC. for work described as: FY23 CREATIVE PRODUCTION AND DEVELOPMENT Key points: 1. Contract value represents a significant investment in advertising and creative development for the Department of the Army. 2. Full and open competition suggests a robust market for these services, potentially leading to competitive pricing. 3. The contract's duration of one year with a delivery order structure allows for flexibility in project execution. 4. Performance is benchmarked against similar advertising contracts to assess value for money. 5. The specific services delivered under this contract are crucial for public outreach and recruitment efforts. 6. The award to a single entity, DDB Chicago Inc., highlights their established capabilities in this specialized field.

Value Assessment

Rating: good

The contract value of approximately $28.1 million for a one-year period for creative production and development appears reasonable given the scope of advertising agency services. Benchmarking against similar large-scale federal advertising contracts would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) pricing structure, while common, requires careful monitoring to ensure costs remain within anticipated bounds and the fixed fee adequately compensates the contractor for their efforts without excessive profit.

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 procurement method generally fosters a competitive environment, which is expected to drive down prices and improve the quality of services offered. The agency likely sought proposals that demonstrated the best overall value, considering both technical approach and cost.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider array of innovative solutions. This process ensures that the government is not limited to a single provider, maximizing the chances of securing high-quality services at a fair market price.

Public Impact

The Department of the Army benefits from enhanced creative production and development services, likely supporting recruitment, public awareness campaigns, and strategic communication initiatives. The services delivered are expected to improve the effectiveness of the Army's messaging to target audiences. The geographic impact is primarily national, as advertising campaigns often have broad reach, though specific regional targeting may occur. The contract supports a workforce within the advertising and creative industry, including roles in strategy, design, copywriting, and media placement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns with CPFF contracts if not closely managed.
Ensuring the fixed fee remains appropriate throughout the contract lifecycle.
Measuring the true effectiveness and ROI of creative advertising campaigns can be challenging.

Positive Signals

Awarded through full and open competition, suggesting a competitive market.
DDB Chicago Inc. is a well-established advertising agency with significant experience.
The contract duration allows for sustained creative output and campaign development.

Sector Analysis

The advertising industry is a dynamic sector characterized by creative innovation and strategic marketing. Federal agencies, particularly large ones like the Department of Defense, frequently engage advertising firms to manage public relations, recruitment, and awareness campaigns. Spending in this sector for government contracts can range from millions to hundreds of millions annually, depending on agency needs and campaign scope. This contract fits within the broader category of professional services, specifically marketing and advertising, where agencies compete on creativity, strategic insight, and media placement expertise.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Therefore, the primary contractor, DDB Chicago Inc., is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Future analysis could explore whether DDB Chicago Inc. has a history of engaging small businesses in its subcontracting efforts for federal contracts.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program managers within the Department of the Army. Performance reviews, regular reporting requirements, and milestone tracking are standard accountability measures. Transparency is facilitated through contract award 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
General Services Administration (GSA) Professional Services Schedules
Federal Acquisition Regulation (FAR) Part 37 - Service Contracting

Risk Flags

Cost Overrun Risk (CPFF)
Performance Measurement Difficulty
Scope Creep Potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.1 million to DDB CHICAGO INC.. FY23 CREATIVE PRODUCTION AND DEVELOPMENT

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 $28.1 million.

What is the period of performance?

Start: 2022-12-19. End: 2023-12-19.

What is the track record of DDB Chicago Inc. in performing federal contracts, particularly for the Department of Defense?

DDB Chicago Inc. has a history of performing advertising and creative services for various clients. While specific details on their federal contract performance history require deeper database searches, their selection for this significant Department of the Army contract suggests they possess the necessary qualifications and experience. Federal agencies typically vet contractors based on past performance, financial stability, and technical capabilities. A review of their past federal awards and performance evaluations would provide a clearer picture of their reliability and success in meeting government requirements. This includes examining any past issues related to contract delivery, quality, or cost management.

How does the $28.1 million contract value compare to similar advertising contracts awarded by the Department of Defense or other federal agencies?

The $28.1 million contract value for a one-year period for creative production and development is substantial and falls within the range of significant federal advertising and marketing procurements. Large federal agencies, especially those with extensive public outreach and recruitment needs like the DoD, often award contracts of this magnitude. Comparing this to similar contracts requires analyzing awards for advertising agencies, public relations firms, and creative services across different agencies and fiscal years. Factors such as contract duration, scope of services (e.g., media buying, campaign strategy, content creation), and the specific agency's mission influence the overall value. Without direct comparative data points for identical services and scopes, this figure represents a considerable investment in external creative expertise.

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

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. If costs escalate beyond initial projections, the government may end up paying more than anticipated. For creative services, defining 'allowable costs' and ensuring efficiency can be complex. Mitigation strategies include robust oversight by the contracting officer and program team, detailed cost tracking and reporting requirements, clear definition of contract scope and deliverables, and regular performance reviews. The fixed fee itself incentivizes the contractor to manage costs efficiently to maximize their profit margin relative to the fee.

What specific types of creative production and development services are typically included under such a contract for the Department of the Army?

Under a contract for 'Creative Production and Development' for the Department of the Army, services typically encompass a broad range of activities aimed at enhancing communication and public engagement. This often includes strategic campaign planning, concept development, copywriting, graphic design, video production (including scripting, filming, editing), digital content creation (social media assets, web content), photography, and potentially media planning and buying. The goal is to produce compelling and effective messaging for various audiences, such as potential recruits, the general public, and internal stakeholders, across multiple platforms and media channels.

How does the 'full and open competition' procurement method impact the potential for innovation and cost savings in this contract?

The 'full and open competition' method is designed to maximize both innovation and cost savings. By allowing any qualified vendor to submit a proposal, the government broadens the pool of potential solutions and encourages a wider range of creative approaches and technological applications. This competitive pressure incentivizes bidders to offer their most innovative ideas and cost-effective strategies to win the contract. Furthermore, competition generally leads to better price discovery, as vendors vie to offer the most attractive pricing while meeting stringent performance requirements. This process helps ensure that the government receives high-quality services at a fair and reasonable price, potentially uncovering novel methods for achieving campaign objectives.

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: $28,120,530

Exercised Options: $28,120,530

Current Obligation: $28,120,530

Actual Outlays: $3,975,525

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $8,826,427

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