The U.S. Government Accountability Office has denied a protest filed by McCann Worldgroup in August over its elimination from the U.S. Army review, threatening to end what has been a lucrative 12-year relationship for the IPG network.
This news means the review, which started in 2015, effectively comes down to Omnicom and WPP.
A McCann spokesperson confirmed that the agency plans to take its objections to federal court.
“The favorable GAO decision reflects the integrity of the Army acquisition process and contracting professionals as good stewards of taxpayer dollars in obtaining the best value,” said a U.S. Army representative. He also confirmed that McCann is no longer officially in the running for the business, writing, “Following the GAO’s decision, the source selection process will move forward in evaluating the remaining offerors to award the contract.”
In an internal memo sent to all staff this morning, McCann CEO Harris Diamond wrote, “After 12 productive years of helping the Army achieve its recruitment mission goals, this is an email I hoped I would not have to write,” stating that the agency had been eliminated by the contracting officer rather than the client organization itself and that the elimination was “based solely on a technical issue related to a missing disk.”
According to parties close to the matter, the agency failed to include certain required materials in its final pitch for the business over the summer.
“Given our commitment and contribution to their goals, we are therefore going to continue to pursue every channel necessary to have the quality of our proposal fairly evaluated, including bringing the matter to Federal Court where a judge will evaluate our case,” Harris wrote after summarizing the agency’s work for the Army since first winning the business in 2005. “Everyone involved feels there is no team better equipped to help the Army in its recruiting mission than the McCann Worldgroup team.”
An IPG spokesperson declined to comment. WPP referred to the client, and Omnicom has not yet responded to a related email.
If McCann’s court filings fail, its relationship with the U.S. Army could end after the contract extension made earlier this year to accommodate its bid protest. According to sources within the Army, the final decision in the review should be announced soon.
Controversy enveloped the Army Marketing and Research Group (AMRG) earlier this year when an internal audit first reported by Adweek found millions in ineffective spending on various Army marketing programs. This followed news of a personal relationship between a top executive on the Army’s team and a former leader of the account at McCann that presented a potential conflict of interest.
As a result of the audit, the Army announced plans to restrict its overall marketing efforts. The Trump administration’s $700 billion-plus defense spending bill, released in August, subsequently withheld 50 percent of AMRG’s budget pending a report on the audit’s results by Secretary of the Army Dr. Mark T. Esper.