Thursday, January 24, 2019

WPP Drops Final Complaint in Legal Battle Over U.S. Army’s Advertising Business - Adweek

The agency fight for the U.S. Army’s advertising business is over after more than four years of RFIs, relaunches, internal investigations and legal disputes.

Today, WPP’s Possible officially withdrew its bid protest against the government from the U.S. Court of Federal Claims, meaning it will no longer contest the decision to award the account to Team DDB in November.

“Pursuant to Rule 41(a)(1)(A)(i) of the Rules of the Court of Federal Claims, Possible hereby submits this notice of voluntary dismissal with prejudice of all claims asserted against Defendant United States of America in Possible’s Complaint,” read the document filed by Washington, D.C., firm Wiley Rein.

The filing opened by stating that Possible filed its initial claim on Dec. 19 and waited until Jan. 8 for Senior Judge Eric G. Bruggink to unseal it, thereby making the complaint public in a heavily redacted form.

Spokespeople for Possible, DDB and WPP declined to comment, as did the lead counsel representing Possible at Wiley Rein and the Latham & Watkins, LLP lawyer representing intervenor-defendant DDB, which joined with WPP in requesting access to “protected material” in the initial complaint.

Army Public Affairs declined to comment.

The decision by the WPP legal team comes less than a week after McCann Worldgroup, which had been incumbent on the Army business for 12 years, decided to end its fight by filing a similar voluntary dismissal. In that case, McCann argued it had been eliminated from the review thanks to an unidentified disk missing from its final presentation materials.

Possible, on the other hand, claimed the Army had not judged its pitch fairly, ignoring the agency’s own “highly innovative” technological assets and awarding the business to DDB only because that shop offered cheaper fees.

“At a price that, upon information and belief, was lower than the incumbent contract, DDB will likely be unable to perform the basic requirements of the contract,” read that complaint, claiming the Army had declined to use its own Independent Government Cost Estimates in deciding which agency could best handle the business.

The most important number to emerge from the the most recent round of legal wrangling was $136 million, or the fees charged over the 10-year contract in DDB’s winning pitch. This total was confirmed to be lower than the fees charged by incumbent McCann, but WPP’s final number remained hidden in the legal documents. According to the Army, total spend over that period will amount to approximately $4 billion.

Today’s news marks the end of a significant investment of time, money and manpower by three major holding companies. The review began in 2014, then went through a series of starts, stops and contract extensions before officially reopening in January 2017.

Later that year, a note to Omnicom and WPP executives from anonymous individuals claimed to demonstrate a “conflict of interest” created by a personal relationship between a top McCann account manager and an Army marketing lead. It led to the suspension of the latter executive, who subsequently resigned from the Army.

The review also occurred in the middle of an internal audit launched by former Under Secretary of the Army Patrick J. Murphy after the Army’s marketing department requested additional funding. Its final draft found millions in spending on various programs with little or no measurable return during fiscal year 2016.

The Trump administration later withheld 50 percent of the Army marketing budget from its 2019 defense spending bill pending the results of a report from Secretary of the Army Mark T. Esper, who has been tasked with updating the Senate and House Armed Services Committees on the Army’s success in enacting recommendations made by the Army Audit Agency.



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