‘Improper Billing’ on Government Account Admitted by O&M

13 December 2000

Following an intensive grilling in early October by a congressional committee over time and management fees, WPP’s Ogilvy & Mather yesterday admitted that it had submitted some “improper” charges for its work on White House anti-drug ads.

The shop says it initiated an internal review following the congressional questioning, hiring PricewaterhouseCoopers to investigate its billing of the government. Meantime, it is “co-operating fully with all government inquiries into its performance and billing.”

“Ogilvy believes that it performed the contract with the ONDCP well beyond reasonable expectations,” insists a statement from the agency, “and provides our client with extremely valuable services”.

“Nonetheless the company recognizes that as a first time government contractor, its administration of some accounting aspects did not meet the rigorous record-keeping requirements imposed on federal contractors. That is not acceptable to us.’’

Ogilvy added that it had offered at a meeting with government officials “to identify and resolve any mistakes that may have occurred. We will continue to work with the government to make sure we comply with their high standards as well as our own.”

During the congressional hearing, Representative John Mica (Republican, Florida) said that almost one third of O&M’s fees for buying ads for the White House anti-drug office had been withheld following allegations of fraudulent billing practices. He demanded the office hand Ogilvy’s time cards to the committee, an ultimatum met in early November.

The inquiry was triggered after an O&M whistleblower claimed that hours logged to the anti-drug account were “dramatically” inflated after Ogilvy management complained of low revenues on the contract.

But drug office officials denied the charges against the agency, suggesting they were politically motivated. O&M’s inexperience in government contracting, countered the bureaucrats, led it to submit inadequate documentation for some expenses and bill for others that were not allowable under government policy.

News source: Advertising Age - Daily Deadline