5.504
Use of advertising agencies
FAR 5.504 ensures government advertising agreements with agencies are structured to maximize cost savings and clarify payment terms, especially regarding media commissions and allowable services.
Overview
FAR 5.504 outlines the procedures and requirements for using advertising agencies to assist the government in producing and placing advertisements, particularly when multiple ads will be placed across various publications and national media. The regulation covers the types of services advertising agencies may provide, such as media selection, contacting media outlets, placing orders, copywriting, and preparing layouts. It distinguishes between commission-paying and noncommission-paying media, specifying how agreements should address each scenario. The section also allows for the inclusion of art work, supplies, and incidentals in the agreement, but excludes printing services.
Key Rules
- Use of Advertising Agencies
- Agencies may be engaged via basic ordering agreements for a range of advertising services when significant advertising is required across multiple media outlets.
- Commission-Paying Media
- Agencies can often provide placement services at no extra cost to the government, as they receive commissions or discounts from the media that are not available to the government directly.
- Noncommission-Paying Media
- If agencies do not receive commissions, agreements must specify whether the agency will place ads at no cost, allow the government to place orders directly, or set a fee for agency placement.
- Art Work and Incidentals
- Agreements may include provision of art work, supplies, and incidentals (like phone calls and postage), but not printing.
Responsibilities
- Contracting Officers: Must structure basic ordering agreements to address commission and noncommission media, specify payment terms, and define allowable incidentals.
- Contractors (Advertising Agencies): Must comply with agreement terms regarding placement services, cost arrangements, and provision of incidentals.
- Agencies: Oversee compliance with agreement terms and ensure proper use of advertising agency services.
Practical Implications
- This section ensures transparency and cost-effectiveness in government advertising by leveraging agency commissions and clarifying payment structures.
- It helps avoid unnecessary costs and clarifies what services can be included in agreements.
- Common pitfalls include failing to specify terms for noncommission media or improperly including printing services in agreements.