U.S. ARMY EXTENDS LEO BURNETT AD CONTRACT

Agency Gets Six More Months; Account Review Still Expected

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WASHINGTON (AdAge.com) The U.S. Army, which has had major problems awarding a new advertising contract, bowed to the inevitable and extended its contract with its current agency, Leo Burnett, another six months, executives said last night.

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With the move, Burnett winds up with more than an extra year on an Army ad contract that was supposed to end last summer without getting competitive bids on the extension.

Leo Burnett, part of Publicis Groupe, created the "Army of One" campaign currently airing.

Recruiting shortfalls
The Army also said it would also sharply raise ad spending as it works to deal with recruiting shortfalls as well as the need to spend a bigger chunk of its yearly ad budget over the remaining six months of the year. The Army has been contracting its advertising account for $200 million a year, but Burnett's contract would be for up to $250 million in spending for the next six months.

Paul Boyce, an Army spokesman, said the increase reflected increased recruitment demands.

“As we face a global war on terrorism, the U.S. Army is increasing its communication and outreach to American citizens,” he said.

Need to increase advertising
Mr. Boyce said the $250 million authorization doesn’t mean the Army will actually spend that much but reflects expectations that the Army needs to devote a heavier part of its ad budget to actual advertising over the next three months.

The dollars in the Army contract includes media advertising in addition to sponsorship efforts. Mr. Boyce noted that the Army is seeking 80,000 active duty soldiers, a 30,000 increase in overall strength from previous levels.

Another review
The Army had originally sought a new agency early last year, but after twice delaying the decision announced it would relaunch the review because of “inconsistencies in the evaluation approach” and had been expected to issue a request for proposals this week. Mr. Boyce said that review will still be launched, but now has a Dec. 31 target date for its conclusion.

He also defended the Army’s decision to extend Leo Burnett's contract without competitive bidding, noting the government has the ability to do so in an “emergency.”

“Given the situation we face today and the needs to continue recruiting, while it was not an emergency, it was not a situation where the long-term” needs would have allowed delay, he said.

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