ARMY READIES ANOTHER CONTRACT EXTENSION FOR BURNETT

Latest Contract Move Will Not Effect Agency Review

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WASHINGTON (AdAge.com) -- The U.S. Army, which has come under fire for extending Leo Burnett USA’s advertising contract for nearly 18 months beyond its stated end without competitive bidding, is readying to substitute an extension for the extension.

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The Army said it intends to offer Burnett, part of Publicis Groupe, a six-month “bridge contract,” extending Burnett's current contract from Sept. 30 until March 31, 2006. Burnett's contract extension was to expire Dec. 31, but the Army hopes to award a new contract by year's end and is concerned about the transition and any delays that make create from one agency to another.

Extending the extension
The extension also comes with the possibility of more extensions: two three-month extensions that could conceivably take Burnett’s contract through September 2006.

“Defense contracting is working very diligently on long-term negotiations but they [the Defense Department] have come to us saying they are on a timetable to award by the end of this year, but it’s possible that a necessary transition period will be needed [if the contract goes to someone else],” said Paul Boyce, an Army spokesman. ”This ensures there will be no break in the Army’s recruitment advertising.”

He called the move “cautious and prudent.”

Review not affected
In announcing plans for the bridge contract, the Army said the contract "does not affect the current competitive solicitation other than to bridge period of performance for the orderly transition to the successful offeror. This contract action will avoid disruption of necessary full-service advertising agency services.”

The move is the latest odd turn on a contract that is the biggest in government advertising, a contract for up to $1 billion in advertising over five years.

The bidding process for a new Army ad contract began in the spring 2004, but after agencies sent in their bids, the Army repeatedly delayed award the account and continued to extend Leo Burnett’s contract. This past April the Army finally canceled that review, citing "inconsistencies in the evaluation approach," and last month the Army reissued its request for proposals for the new contract.

Dodging competition
Those delays prompted criticism by Scott H. Amey, general counsel for the Project on Government Oversight, who suggested that while one extension might be justified, multiple extensions “are nothing more than an attempt to dodge competition which prevents taxpayers from getting the best deal.”

Mr. Amey today called the latest extensions “crazy.”

Even as the extensions continue Burnett’s contract, the Army is also continuing its current agency review. Interpublic Group of Cos.' McCann Erickson Worldwide and WPP Group's Y&R Advertising, Ogilvy & Mather and Grey Worldwide are contenders in the review.

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