The U.S. Army is shutting out minority ad shops not partnered with a major agency from competing for its $130 million account.
The move, which essentially blocks them from one of the government's largest ad contracts, comes as the General Accounting Office conducts a study of government use of minority ad agencies. An interoffice work group headquartered at Vice President Al Gore's office is conducting a second report on the topic.
On Feb. 24, the Army published a notice in Commerce Business Daily saying its consultant, Jones-Lundin Associates, Chicago, would only consider full-service agencies or consortiums with $350 million in annual billings for its account. Ad agency officials said after the notice was issued, the consultant began informing agencies they were out of the running for the business, and that the Army had narrowed its list to a dozen or so shops. The identity of those shops couldn't be learned at press time.
SIMPLIFICATION A MOTIVE
Privately, Army officials said the decision was made to simplify the process by conducting a single advertising review, rather than individual competitions for African-American, Hispanic and general-market ads. Neither the Army nor officials from the Department of Defense would comment publicly.
Traditionally, government agencies issued a single contract for advertising, with a lead agency often working with groups of minority shops. Under the Army's current contract with Y&R Advertising, New York, for instance, Chisholm-Mingo Group had handled African-American advertising for 12 years.
Minority ad agencies and some civil rights leaders--among them the Rev. Jesse Jackson, Vice President Gore and Democratic presidential hopeful Bill Bradley--have criticized the current government ad contracting procedure, charging it disenfranchises minority agencies that can't find large partners. Moreover, they claim those that do are often left at odds with their partners over who will produce and purchase media for each ad.
DECISION DRAWS FIRE
The Army's decision to seek a single ad contract left minority agencies howling.
"The problem I have with it is it is taxpayer money," said Caroline Jones, president-CEO of Caroline Jones Inc., New York. "They are trying to skew to people who look like them. It is improper for a government organization to dictate what kind of restriction there should be on the spending of public money."
Sam Chisholm, president-CEO of Chisholm-Mingo, said the Army is doing exactly what government officials have said they want to stop doing.
"This is the thing we have been trying to talk to Congress about," he said. "I have no problem in working with multinational organizations, but I think that by doing that, [the Army] begins to exclude pitches from independents."
Copyright February 2000, Crain Communications Inc.