Carat USA’s allegation that it was unfairly deprived of its share of the $125 million California Department of Health Services anti-smoking account has been referred to the state legislature.

The shop charges that Ground Zero, the Los Angeles creative agency it partnered in its successful pitch for the account last year, went back on its agreement that Carat’s LA office would handle media buying, a decision the DHS has failed to overturn [WAMN: 12-Nov-01].

GZ pitched with Carat because its own media purchases did not meet the minimum $20m demanded by the contract – a fact that, says Carat, means the DHS is not now getting optimum value for its money.

California’s Little Hoover Commission, a body which investigates state government activity to promote efficiency, economy and improved service, has now passed the challenge to a joint committee of the California Legislature, which will rule on whether the California Bureau of State Audits should hold a media-buying audit.

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