Even as the possibility surfaced that U.S. Rep. Carolyn Kilpatrick (D., Mich.) would write language into the Army's appropriations bill requiring the military arm to directly contract with minority ad agencies, the Army and consultant Jones-Lundin Associates last week limited the search to the Martin Agency, Richmond, Va.; Campbell-Ewald, Warren, Mich.; and Leo Burnett USA, Chicago.
The Army, which is following an unorthodox contracting process that could be open to challenge, said in a letter to Rep. Kilpatrick it was engaged in "market research" to determine "what agencies might qualify for a contract." The Army has yet to publish a request for proposals that normally begins the bidding process and leads to finalist selections. Army officials did not return phone calls about how they would handle bids from agencies not among the trio.
Each of the three ad agencies is working with partners. The Martin Agency is allied with Caroline Jones Advertising, New York, for African-American advertising and Cartel Cretivo, San Antonio, for Hispanic input. Campbell-Ewald's group includes Chisholm-Mingo Group, New York (which currently works on the Army account with incumbent Y&R Advertising, New York) for African-American work; Accent Media, Miami, for Hispanic ads; and Initiative Media, Los Angeles, for media buying. Burnett is working with sibling Starcom Worldwide and other B 3Com-associated agencies.
Y&R decided not to participate after the Army said part of the compensation would be tied to recruiting success. Some New York agencies said Army officials seemed to purposely favor smaller shops where the account would be a larger share of the business. The review process suggested the Army would be a "difficult" client, said one executive with knowledge of the review.
The Army's decision to require any agency -- or consortium of agencies -- applying for its contract to have at least $350 million in billings effectively eliminates minority agencies as the prime contractors. That drew the ire of minority ad agencies and the Rev. Al Sharpton, who noted that 40% of Army recruits are minorities and that Congress had given the military specific direction to increase its use of minority- and women-owned agencies.
Rep. Kilpatrick has charged that requiring minority agencies to be subcontractors isn't good enough. She earlier asked Defense Secretary William Cohen for an explanation and got back a spirited four-page defense from P.T. Henry, the Army's assistant secretary for manpower and reserve affairs.
"Using a general marketing agency guarantees consistency and synergy between the Army's various target-market efforts," wrote Mr. Henry. He also said the new contract would give the Army flexibility to hire additional agencies as needed.
Contributing: Hillary Chura.