McCann World Group has filed a formal Government Accountability Office pre-award bid protest against the US Army, saying that its elimination from an agency review for the U.S. Army's business was "an arbitrary and capricious decision."
In January, the U.S. Army released a request for proposals for its advertising and marketing business. An Army representative said then that the mandated review "estimates the contract ceiling to not exceed $4bn" over a period up to a decade.
McCann World Group, which includes Weber Shandwick and UM, has held the business since 2005 and gets an estimated $30m to $40m in annual revenue from the account, AdAge reported.
The Army extended its contract with McCann World Group in November 2015 for another 18 months. But now McCann has been axed from the new review.
McCann World Group Chairman-CEO Harris Diamond said in an email to employees, "We have recently been notified by the government contracting officer, who is managing the mandated Army review, that we were disqualified due to technical issues related to our proposal.
"Therefore, we were not invited to the oral presentations."
The agency, the email said, was disqualified before its proposal reached "our clients [the Army] who have been quoted in support of our work and relationship, are not being given the opportunity to read or review our proposal.
“We believe the contracting officer's decision is wrong and we are protesting."
Some of the reasons cited in the bid protest include the contracting officer's "failure to read McCann-Erickson's entire proposal" and "incorrect and inexplicable assertion that McCann-Erickson is not registered in the System for Award Management (SAM)," or the system used by the government in hiring contractors, even though it has been a longtime agency for the U.S. Army.
According to the document, McCann alleges that the Army's contracting officer made a "superficial review" of its proposal and "inexcusably failed to correctly check the SAM database." McCann says the SAM issue in the protest document was "one of the most egregious errors in the review."
The Army also allegedly disqualified McCann, people with knowledge of the matter told AdAge, for several technical errors, such as using a PDF rather than an Excel sheet in the proposal.
Representatives from the U.S. Army had not returned calls for comment by press time.
The holding company protest follows McCann's agency-level protest in May, which was denied.
If the GAO bid protest is also denied, the agency can take the matter to the Court of Federal Claims. One McCann executive said the agency intends to take the matter to court if the protest doesn't produce results.
"We think we're right on the merits," the executive told Ad Age, "but equally important, we think we've done really great work for the U.S. Army. We've met everything and have been honored by them for performance over the years, so we hope to get through this process."
In a GAO protest, a government agency – the Army in this case – cannot award the business until the protest is ruled on, which must occur within 100 days. The start date for the new contract is March 30, 2018.
"There is simply no logical reason to rush to exclude strong proposals given the time available to select the best offer," the protest document says.
The document also notes that there is "already an extremely small pool of competitors" in the review. McCann writes in the document that it deduces that there were only two or three agencies in the competition, "an extremely small number for any procurement, let alone of this importance, size and complexity."
McCann was told about being eliminated from the process via email rather than on the phone or in a meeting, according to people familiar with the situation.
"We are disappointed in the Contracting Officer's decision," said a McCann spokesman in a statement. "We are enormously proud of the work we have done with our client partners over the past 11-plus years and hope we will have the opportunity to continue to help the U.S. Army in meeting its important recruiting mission and goals."