JOFOC.pdf

U.S. Department of Transportation

National Highway Traffic Safety Administration

Memorandum

Subject: Required approval for: Justification and Approval for Other Than Full and Open

Competition to enter into a Sole Source contract with the Advertising Council, entitled, “Media Services for Traffic Safety Public Service Campaigns.”

Date: February 8, 2017

From: Seth Moody, Contract Specialist

Office of Acquisition Management

To: Cynthia Parker

Acting Head of Procuring Activity

Thru: Kil-Jae Hong, Contracting Officer’s Representative, Office of Consumer

Information

Sherese Gray, Contracting Officer; Office of Acquisition Management

Mary Sprague, Associate Administrator for Administration Management

The attached document is submitted for your signature. This is a Justification for Other Than Full and Open Competition for Request for Proposal No. DTNH2217R00007. This action is being made pursuant to 41 U.S.C. § 253(c)(1). Please contact Seth Moody, ext.69557 if you have any questions.

U.S. Department of Transportation

National Highway Traffic Safety Administration

Justification for Other than Full and Open Competition (JOTFOC)

Proposed Request for Proposal (RFP) No. DTNH2217R00007 (PR No. 17RQ-00055) with the National Highway Traffic Safety Administration (NHTSA) and the Ad Council for the project entitled “Media Services for Traffic Safety Public Service Campaigns.”

1. Identification of Agency and the contracting activity:

Contracting Activity:

Sherese Gray, Contracting Officer NHTSA Office of Acquisition Management (OAM) 1200 New Jersey Avenue SE Washington, DC 20590

Requesting Activity:

Kil-Jae Hong, Contracting Officer’s Representative (COR) NHTSA Office of Consumer Information (OCI) 1200 New Jersey Avenue SE Washington, DC 20590

2. Description of Action:

This is a sole source procurement to the Advertising Council (Ad Council) to provide expert support for public service announcement campaigns in both English and Spanish. This supports includes assisting in the development and implementation of campaign strategies, creation of multimedia advertising products, dissemination of campaign assets to national and local media outlets, and monitoring and reporting the results of media placement efforts.

The objective of this effort is to continue the life cycle of the Agency’s current suite of PSAs for impaired driving, underage drinking and driving, child passenger safety, tween seat belt safety, and distracted driving, and to assist with NHTSA’s on-going and upcoming PSA campaign initiatives.

This contract will be a sixty (60) month Indefinite Delivery Indefinite Quantity

(IDIQ).

3. Description of Services to Meet Agency Needs:

The scope of this contract includes implementing, disseminating, monitoring and evaluating nationwide media public service campaigns to demonstrate safe driving behaviors to the target audiences.

The scope also includes cultivating partnerships in addition to developing public service announcement campaign assets.

The estimated value of all services to be performed under this sole-source IDIQ contract is $35,514,669.

4. Identification of the Statutory Authority Permitting Other Than Full and Open Competition:

The statutory authority for the proposed contract with the Ad Council is 41 U.S.C.

§ 3304(a)(1), as implemented by FAR Part 6.302-1 “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements”, in which FAR Part 6.302-1(a)(2) states that an executive agency may use procedures other than competitive procedures only---

(2) “When the supplies or services required by the agency are available from only one responsible source… and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for.”

5. Demonstration that the Proposed Contractor’s Unique Qualifications or the

Nature of the Acquisition Requires Use of the Authority Cited:

NHTSA uses donated PSA campaigns and paid media advertising campaigns. This contract is for PSA campaigns. PSAs are always sponsored by a non-profit or government agency whereas a commercial is paid for by an entity who then purchases airtime and space to run their ads. Established for the express purpose of providing PSA expertise to the federal government and other national non-profit organizations, the Ad Council is the sole organization designated by the advertising industry to provide this service. The Ad Council is supported by all the major associations of the advertising and communications industry and is the only national voluntary non-profit organization that provides PSA campaign planning, execution, and endorsement. There is no other source offering the full range of PSA campaign services nationwide.

The Ad Council’s Board of Directors and Creative Review Committees are comprised of leading members from the advertising and communications industries who provide executive leadership and creative oversight to ensure the continuing quality of Ad Council products and services. No other organization can offer this level of industry-wide buy in and support, both of which are critical factors in the successful placement of PSA campaign materials. This partnership and buy in by industry and media outlets allows for tremendous cost savings through the donation of volunteer marketing expertise and donated media, which a commercial for-profit company could not provide without additional costs. The Ad Council itself generally does not produce campaign materials, but acts as a coordinator and distributor. The actual marketing campaign is assigned to leading advertising agencies that seek to further their own public interest participation by developing the campaign strategy and producing the actual advertisements. Ad Council distributes the finished PSA campaign materials to media outlets.

Based on its special stature in the advertising industry, the Ad Council's support of NHTSA PSA campaigns is anticipated to result in at least $700 million in donated media advertising to promote the agency's traffic safety campaigns for impaired driving, underage drinking and driving, child passenger safety, tween seat belt safety, and distracted driving. This type of donated media represents a return of over 1800% on NHTSA’s advertising budget of $35.5 million under the contract.

In addition, only the Ad Council can execute roadblocks with the Television Bureau of Advertising (TVB) and the Outdoor Advertising Association of America (OAAA) through their strong relationships with media associations and public service directors at the local stations. A roadblock is free advertising to only one PSA campaign nationwide during a concentrated time period. The Ad Council also has strong ties with the entertainment industry that allow for the use of characters in advertising materials, including but not limited to the following: Warner Brothers (Storks, Paddington, and the Wizard of Oz), Disney (Cinderella), and Fox (Glee).

No other advertising firms offer this ability for outreach. For example, for-profit companies would not receive the same type of access and commitment from advertisers and broadcasters and consequently NHTSA would have to pay for most ad production and media produced. NHTSA has a limited budget for advertising that is not able to cover hundreds of millions of dollars in cost. Consequently, the agency would have to scale back most of its advertising efforts using a firm other than the Ad Council, reducing their nationwide impact at the expense of the overall driving safety of the public.

It is estimated that the government saves not only in labor costs but also in the ability of the Ad Council to get prime daytime and evening spots that networks allocate for PSA. Volunteer advertising agencies donate an estimated $500,000 to $1 million in pro bono labor annually per PSA campaign. The Ad Council also gets deeply discounted research and production rates. The average production cost for a 30 second TV spot is $354,000, and NHTSA’s average production cost while working with Ad Council has been $147,850. Another example of cost savings occurs with talent fees. NHTSA currently has 17 active spots across 5 PSA campaigns that use union talent, which is provided to Ad Council at special reduced rates. These special rates are maintained while being broadcast under the control of the Ad Council. Transferring the rebroadcast rights to any other firm would not preserve the special rates. Under these circumstances, NHTSA estimates that the union talent renewals at regular rates alone would result in additional costs of over $5,000,000.

As a result of the above information, NHTSA intends to award a contract to the Ad Council for continued media support services for PSA campaigns. NHTSA’s Small Business Specialist concurred with and the Director of the OSDBU approved NHTSA’s approach to solicit this acquisition on a sole source basis.

Note: OST/OSDBU did not actively participate in the market research process as such participation was not warranted. NHTSA has extensive acquisition history with this requirement and is thoroughly familiar with the advertising market for PSA campaigns.

6. Efforts Made To Obtain Competition, and Whether a Notice Was or Will Be Publicized as Required by FAR Subpart 5.2 and, If Not, Which Exception Under FAR 5.202 Applies:

A synopsis of the proposed contract will be published on the Government Wide Point of Entry, at http://www.fbo.gov in accordance with FAR 5.201, upon approval of the Acquisition Plan. The synopsis will state the agency’s intent to award a contract to the Advertising Council on a sole source basis, and invite any other interested parties to submit a Statement of Qualifications to the NHTSA’s Office of Acquisition Management for evaluation and consideration within fifteen

(15) days of posting. All statements received will be given consideration to ensure that all opportunities of competition have been explored and exhausted.

7. A Determination by the Contracting Officer That the Anticipated Cost to the Government Will Be Fair and Reasonable:

The Ad Council’s cost proposal will be compared to historical data and prices commonly paid in the marketplace for the same or similar services and subjected to a detailed cost and price analysis before any negotiations are conducted, and if that analysis reveals any excessive costs, or that any cost and pricing adjustments to the proposal are needed, such adjustments will be made before the contract is issued. Moreover, each invoice submitted by the contractor during performance of this contract will be scrutinized for allowability, allocability, and reasonableness of billed costs in accordance with FAR Part 31. These procedures will ensure that the anticipated cost to the Government is fair and reasonable.

8. A Description of the Market Research Conducted and the Results or a Statement of the Reason That Market Research Was Not Conducted:

FAR Subpart 7.101 describes a market survey as an attempt to ascertain whether other qualified sources capable of satisfying the Government’s requirements exist.

This testing of the marketplace may range from written or telephone contacts with http://www.fbo.gov/ knowledgeable federal and non-federal experts regarding similar or duplicate requirements, and the results of any market test recently undertaken, to the more formal sources-sought announcements in pertinent publications, or solicitations for information or planning purposes.

The Small Business Specialist posted a sources sought notice on FedBizOpps on June 23, 2016, which closed on July 1st, 2016. The notice resulted in NHTSA receiving five (5) capability statements in response from CauseWay Agency, LMD, Media Link, Outreach Process Partners, and Red Carrot. Separately, a small business search identified two more possible firms. However, upon review of the information, including Corporate Experience/Past Performance of each firm, the agency determined that none of these for-profit firms possessed the ability, experience and past performance necessary to create advertising and obtain broadcasting on a nationwide scope that would meet NHTSA’s requirements. Separately, it become clear that the notice and other materials provided to the firms did not include sufficient information that would have allowed them to understand the scope and size of the PSA campaigns at issue and the amount of donated media that would be required to ensure a nationwide broadcast.

After further meetings with the program office and Office of the Secretary of Transportation’s (OST) Office of Small and Disadvantaged Business Utilization (OSDBU), the agency determined it appropriate to publish a second sources sought notice that included more details about the agency’s requirements. In response to the second notice, published on August 17, 2016, the agency received no responses and/or corporate capabilities statements. Based on these circumstances, the COR documented the agency’s market research efforts and recommended that the agency enter into negotiations with the Ad Council on a sole source basis under authority of FAR 6.302-1. The recommendation was reviewed and approved by NHTSA’s Office of Acquisition Management and

OST/OSDBU.

9. Any Other Facts Supporting the Use of Other Than Full and Open Competition:

None.

10. A Listing of the Sources, if any, that Expressed, in Writing, an Interest in the Acquisition:

As detailed above, five (5) capability statements were received from CauseWay Agency, LMD, Media Link, Outreach Process Partners, and Red Carrot in response to NHTSA’s first sources sought notice on July 1st, 2016. In response to the second sources sought notice on August 17, 2016 that explained more completely the contract requirements, the agency received no expressions of interest.

11. A Statement of the Actions, if any, the Agency May Take To Remove or Overcome Any Barriers to Competition Before Any Subsequent Acquisition For These Services:

Not applicable.

12. Contracting Officer Certification That the Justification Is Accurate and Complete

To the Best of the Contracting Officer’s Knowledge and Belief:

As confirmed by the signature below, the Contracting Officer hereby certifies that the facts and representations included in this justification are accurate and complete to the best of her knowledge and belief.