O&M to Settle ONDCP Billing Row at Cost of $1.8m

05 February 2002

The overbilling row between Ogilvy & Mather in New York and the White House Office of National Drug Control Policy has been resolved, at a cost to the ad agency of over $1.8 million.

At the heart of the squabble are claims made by a former O&M staffer that the shop had overcharged the ONDCP [WAMN: 05-Oct-00]. The agency refuted the allegations, claiming irregularities in its billing reflected unfamiliarity with the government’s accounting procedure.

In order to decide whether criminal or civil charges should be brought against O&M, the case was taken up during the summer by the Justice Department; it is this body, not the ONDCP, that forged the new agreement.

Under the settlement, claims by the Justice Department that O&M submitted erroneous timesheets and failed to ensure labor expenses were accurate will be dropped, in return for which the agency will pay $689,744 cash and amend bills for its three-year tenure on the business so as to slash expenses by over $1.15m.

The anti-drugs office is currently reviewing the account, from which it is by no means certain that O&M will be fired. “We're happy with the agency's technical performance,” commented ONDCP spokeswoman Jennifer Devallance, “especially with the latest effort, linking drug use and terrorism.”

The agency recently brokered one of the largest single ad deals ever by a government body, exploiting low ad rates to buy ad time during Sunday’s Super Bowl for $3m.

Judged by its determination to be part of the review [WAMN: 09-Nov-01; 13-Nov-01], O&M is reluctant to part ways with the account – unsurprisingly, given that it guarantees around $1.6m in profits a year.

News source: Wall Street Journal