ARMY REISSUES REQUEST FOR PROPOSALS FOR $200 MILLION AD CONTRACT

For the First Time, Government Account Is Guaranteed for Two Years

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WASHINGTON (AdAge.com) -- After a series of starts and stops, the U.S. Army, which is having recruitment problems in light of the war in Iraq, has reissued its request for proposals for its up to $1 billion ad contract -- the government’s largest ever.

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After abruptly canceling a long-running review, leaving six ad agencies that were chasing the account in the lurch after each spent millions pitching the business, the Army is now giving agencies a new incentive to pitch: It intends to make the contract, for the first time, a two-year award.

Three one-year renewals
The Army contract will offer the winning agency a guarantee of a two-year contract with up to three one-year renewals. The proposal says the contract will start Sept. 30.

Virtually all government ad contracts up to now have been for one year with annual renewals for up to five years, and its rae for government contracts not to be renewed annually. (It's not clear if the Army's two-year contract will set a precedent for other government ad contracts, such as the White House's anti-drug account.)

A month after awarding its current agency, Publicis Groupe's Leo Burnett USA, a six-month extension of the ad account that anticipated a boost in annual Army ad spending from $200 million to $250 million in a six-month period, the request for proposals anticipates spending to return to the $200 million annual level for the new contract.

Non-measured media activities
The $200 million annual spending includes a large outlay for non-measured media activities and also covers Army Reserve advertising.

The contract has had a troubled history: 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 said it would launch a new review.

A spokesman for a consumer group that oversees government acquisitions has criticized the Army for its actions on the review. Because of the extensions, Burnett will end up having nearly 18 extra months on its Army contract.

Recruitment shortfalls
The delays comes as the Army continues to have trouble recruiting. While it made its June recruiting goal, the Army has regularly missed monthly goals and is running at 86% of its fiscal-year goal. How much Burnett’s "Army of One" ad campaign has to do with the misses is hard to measure amid daily news reports of military and civilian deaths in Iraq. One part of the current Army campaign tells parents that sending their children to the Army is the right and patriotic thing to do.

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