DoD awards $22M+ for R&I Task Order to DDB Chicago Inc. under Full and Open Competition

Contract Overview

Contract Amount: $21,983,666 ($22.0M)

Contractor: DDB Chicago Inc.

Awarding Agency: Department of Defense

Start Date: 2024-02-25

End Date: 2025-05-29

Contract Duration: 459 days

Daily Burn Rate: $47.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: FY24 RESEARCH & INNOVATION TASK ORDER DIRECT LABOR & ASSOCIATED ODE

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60604

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $22.0 million to DDB CHICAGO INC. for work described as: FY24 RESEARCH & INNOVATION TASK ORDER DIRECT LABOR & ASSOCIATED ODE Key points: 1. Significant award value of over $22 million for research and innovation. 2. DDB Chicago Inc. secured the contract through full and open competition. 3. Potential risk associated with cost-plus-fixed-fee contract type if not managed closely. 4. The contract falls within the Advertising Agencies sector, potentially impacting broader marketing efforts.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if the fixed fee is not carefully negotiated and the government does not maintain strong oversight of direct labor and associated costs. Benchmarking against similar R&I contracts is difficult without more specific service details.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically allows multiple bidders to compete, driving potentially better pricing and value for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and prevent price gouging.

Public Impact

Taxpayers benefit from a competitive bidding process for research and innovation services. The award to DDB Chicago Inc. may influence future advertising and marketing strategies within the Department of Defense. Transparency in the use of direct labor and associated overhead costs is crucial for accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Potential for cost overruns if not managed effectively
Limited visibility into specific R&I deliverables

Positive Signals

Full and open competition ensures broad market participation
Award to established vendor DDB Chicago Inc.
Clear contract duration and start date

Sector Analysis

This contract falls under the Advertising Agencies sector (NAICS 541810). Spending in this sector for government services can vary widely depending on the specific needs for research, innovation, and creative services. Benchmarks are difficult without knowing the exact nature of the R&I work.

Small Business Impact

The contract was awarded to DDB Chicago Inc. and there is no indication that small businesses were involved as subcontractors or partners in this specific task order. Further analysis would be needed to determine if small business participation was sought or achieved.

Oversight & Accountability

Oversight will be critical for the Cost Plus Fixed Fee structure to ensure that direct labor and associated overhead costs are reasonable and directly tied to the research and innovation objectives. The Department of the Army's contracting officers will need to monitor performance closely.

Related Government Programs

Advertising Agencies
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Cost Plus Fixed Fee contract type
Potential for cost overruns
Lack of specific R&I deliverable details
Limited small business participation indicated

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.0 million to DDB CHICAGO INC.. FY24 RESEARCH & INNOVATION TASK ORDER DIRECT LABOR & ASSOCIATED ODE

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 $22.0 million.

What is the period of performance?

Start: 2024-02-25. End: 2025-05-29.

What specific research and innovation outcomes are expected from this $22M+ contract, and how will their value be measured?

The specific research and innovation outcomes are not detailed in the provided data. Measuring value will depend on clearly defined deliverables, milestones, and performance metrics established within the contract's statement of work. The Department of Defense will need to track progress against these objectives to assess the return on investment for the $22,198,366.16 awarded.

What are the primary risks associated with a Cost Plus Fixed Fee contract for R&I services, and how can they be mitigated?

The primary risk is potential cost overruns if the fixed fee is too high or if the government does not adequately oversee the direct labor and associated overhead costs. Mitigation strategies include rigorous negotiation of the fixed fee, detailed cost tracking, regular performance reviews, and clear scope management to prevent scope creep. Strong government oversight is paramount.

How effective is full and open competition in ensuring cost-effectiveness for specialized R&I services like those potentially provided by DDB Chicago Inc.?

Full and open competition is generally effective in promoting cost-effectiveness by allowing multiple vendors to bid, fostering price competition. However, for highly specialized R&I services, the effectiveness depends on the clarity of the solicitation and the ability of diverse vendors to accurately estimate costs and propose innovative solutions. The government must ensure the solicitation attracts qualified bidders.

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: $21,983,666

Exercised Options: $21,983,666

Current Obligation: $21,983,666

Actual Outlays: $3,248,084

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $12,872,588

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