DoD's $29.1M contract with DDB Chicago Inc. for advertising services awarded under full and open competition

Contract Overview

Contract Amount: $29,101,418 ($29.1M)

Contractor: DDB Chicago Inc.

Awarding Agency: Department of Defense

Start Date: 2024-07-01

End Date: 2025-06-30

Contract Duration: 364 days

Daily Burn Rate: $79.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AEMO CORE OPS

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60604

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $29.1 million to DDB CHICAGO INC. for work described as: AEMO CORE OPS Key points: 1. The contract value of $29.1 million represents a significant investment in advertising services for the Department of the Army. 2. Awarded through full and open competition, suggesting a robust market engagement and potential for competitive pricing. 3. The firm-fixed-price contract type indicates that the contractor assumes the risk for cost overruns. 4. The contract duration of 364 days suggests a focused, year-long campaign or service period. 5. The geographic location of the contractor in Illinois may have implications for local economic impact and workforce. 6. The specific North American Industry Classification System (NAICS) code 541810 points to the advertising agency sector.

Value Assessment

Rating: good

The contract value of $29.1 million for advertising services appears within a reasonable range for a large-scale federal campaign. Benchmarking against similar large federal advertising contracts would provide more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for the government, as it caps costs. However, without detailed scope of work and deliverables, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this method generally fosters a competitive environment, which can lead to better pricing and service innovation. The agency's commitment to open competition suggests they sought the best value from the market.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings and ensures the government receives competitive pricing by leveraging a wider pool of qualified contractors.

Public Impact

The Department of the Army is the primary beneficiary, likely utilizing these services for recruitment, public awareness campaigns, or public relations initiatives. The services delivered will be advertising and related marketing activities, aimed at achieving specific communication objectives for the Army. The contract's impact is primarily national, supporting the Army's strategic communication goals across the United States. Workforce implications may include employment opportunities within DDB Chicago Inc. and its subcontractors, as well as potential indirect impacts on the broader advertising industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics in the provided data makes it difficult to assess the effectiveness of past performance.
The substantial contract value could indicate a complex scope of work, potentially introducing execution risks if not managed meticulously.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded a fair price.
Firm-fixed-price contract type shifts cost overrun risk to the contractor, which is a positive for the government.
The contractor, DDB Chicago Inc., is a known entity in the advertising industry, implying a level of established capability.

Sector Analysis

The advertising industry is a dynamic sector characterized by creative services, media buying, and strategic communication. Federal spending in this sector often supports recruitment, public health campaigns, and national defense messaging. The $29.1 million contract represents a significant allocation within the federal advertising market, comparable to large-scale campaigns undertaken by other major government agencies. The NAICS code 541810 confirms this contract falls squarely within the advertising agencies sub-sector.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary focus is on the large business prime contractor, DDB Chicago Inc. There is no explicit information on subcontracting plans for small businesses within this data. Future analysis would require reviewing the contract's subcontracting goals and performance to assess its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officer and their representatives. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified services within the agreed budget. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Advertising Contracts
Army Recruitment Marketing
Federal Agency Public Relations
Government Advertising Services
NAICS 541810 Contracts

Risk Flags

Potential for scope creep in large advertising campaigns.
Need for clear performance metrics to assess campaign effectiveness.
Ensuring fair and effective subcontracting if applicable.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.1 million to DDB CHICAGO INC.. AEMO CORE OPS

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 $29.1 million.

What is the period of performance?

Start: 2024-07-01. End: 2025-06-30.

What is the track record of DDB Chicago Inc. with federal contracts, particularly within the Department of Defense?

DDB Chicago Inc. has a history of securing federal contracts, though specific details on their performance within the Department of Defense require deeper investigation into contract databases. Analyzing past awards, contract values, and any reported performance issues or successes would provide a clearer picture of their federal track record. Understanding their experience with similar-sized or complex advertising campaigns for government entities is crucial for assessing their capability and reliability in executing this $29.1 million award. A review of their past performance ratings, if publicly available, would also be highly informative.

How does the $29.1 million contract value compare to other large federal advertising contracts awarded in recent years?

The $29.1 million contract value places this award among significant federal advertising expenditures. To benchmark effectively, one would compare it against contracts awarded to other major advertising agencies by agencies like the Department of Health and Human Services, Department of Veterans Affairs, or the Department of Defense itself for similar services such as recruitment or public awareness campaigns. Examining the average contract value for large-scale federal advertising efforts over the past 3-5 years would provide context. If this contract represents a higher-than-average value for its scope, it might warrant closer scrutiny regarding the scope of work and pricing.

What are the primary risks associated with a firm-fixed-price contract of this magnitude for advertising services?

While firm-fixed-price (FFP) contracts are generally favorable for the government by capping costs, risks can still exist. For a large advertising contract, risks include the contractor potentially cutting corners on quality or creativity to maintain profitability if costs escalate unexpectedly. There's also a risk of scope creep if the government's needs evolve significantly beyond the initial SOW, potentially leading to change orders that could increase the total cost. Furthermore, if the initial pricing was overly aggressive by the contractor, it could lead to performance issues or a desire to renegotiate terms. Effective oversight is crucial to ensure deliverables meet quality standards and objectives.

What specific advertising objectives or campaigns is this $29.1 million contract likely intended to support for the Department of the Army?

Given the substantial value, this contract likely supports broad, strategic advertising objectives for the Department of the Army. Potential uses include major recruitment campaigns to attract new service members across various branches and specialties, public awareness initiatives to enhance the Army's image and communicate its mission, or targeted campaigns for specific programs or events. It could also encompass a mix of digital, traditional media, and public relations efforts. Without a detailed Statement of Work (SOW), the precise objectives remain speculative, but the scale suggests a significant, multi-faceted communication strategy.

How has federal spending on advertising services, particularly by the Department of Defense, trended over the past five years?

Analyzing historical spending trends for advertising services by the Department of Defense (DoD) and the federal government overall would provide valuable context. This involves examining aggregate data for NAICS code 541810 and related categories over the past five fiscal years. Trends might reveal an increase or decrease in overall federal advertising budgets, shifts in preferred media channels (e.g., digital vs. traditional), or changes in the average contract values. Understanding these patterns can help determine if the current $29.1 million award is an anomaly, an increase, or consistent with historical spending levels for similar large-scale efforts.

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: FIRM FIXED PRICE (J)

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: $29,101,418

Exercised Options: $29,101,418

Current Obligation: $29,101,418

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $11,434,478

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