IRS axes $15m marcomms RFP after year-long process

WASHINGTON: The Internal Revenue Service has canceled its search for a firm to help it with PR, advertising, and marketing projects. The five-year contract was estimated to be worth up to $15 million.

WASHINGTON: The Internal Revenue Service has canceled its search for a firm to help it with PR, advertising, and marketing projects. The five-year contract was estimated to be worth up to $15 million.

The RFP process lasted more than a year. A major part of the work would have involved developing a public service campaign to encourage voluntary compliance with the IRS “by rekindling public spirit and reinforcing personal integrity for paying taxes,” the solicitation said.

In a copy of the cancellation notice sent to PRWeek, the IRS said the RFP was voided “due to significant programmatic changes. The government thanks all offerors for your participation and will consider all participants in similar future requirements.”

Terry Lemons, communications director at the IRS, expanded on the reasoning to PRWeek.

“Several factors entered into [the decision], including changing demands inside the IRS as well as a decision to bring more of this type of work in-house,” Lemons said.

After PRWeek was the first to report on the RFP last February, a follow-up Wall Street Journal story resulted in backlash from Capitol Hill. Last summer, Sen. Jerry Moran (R-KS), the ranking member of the Senate Appropriations Subcommittee on Financial Services and General Government, attempted to prohibit the IRS from using appropriated funds to contract PR services.

He withdrew his amendment after subcommittee chairman Sen. Dick Durbin (D-IL) included language in an appropriations bill to prohibit the use of taxpayer dollars to enhance the IRS' image.  

Other government PR contracts have drawn the ire of fiscal conservatives in the past year. Prominent Republicans criticized a multimillion-dollar contract awarded by the Centers for Medicare and Medicaid Services to Porter Novelli in May. A number of Republican congressmen threatened to subpoena Department of Health and Human Services documents about that contract in October.

However, the IRS contract, with a prospective winner, was sent to legal review last summer. The presumptive winner of the RFP process is unknown. Porter was the incumbent on the account.

After months of silence, firms in competition for the contract such as Ogilvy Public Relations, Weber Shandwick, and Porter were somewhat optimistic that an award announcement was imminent after receiving a message from the IRS.

The IRS asked in September if proposed pricing from the firms could be extended another 30 days. Once the firms submitted information, the federal agency went silent, according to one of the agencies in contention.

Catherine “Kiki” McLean, senior partner, global head of public affairs, and MD for Porter Novelli Public Services in Washington, declined to comment on the account, citing agency policy on not discussing federal contracts held by the firm. She deferred other questions to the IRS.

Lemons did not confirm or deny that congressional pressure played a role in axing the account. He explained that “there is a general effort underway at the IRS to find additional efficiencies during a period of tight budgets.” The overall IRS fiscal year 2012 budget was reduced by $305 million, he said.

Industry insiders have said they believe the IRS may have rolled some of the work into another existing communications contract. For instance, the IRS renewed its contract with TMP Worldwide for another year in June. TMP signed a one-year contract with the IRS in 2010, with the option of four additional years. It has a capped budget of $14.8 million. At the time of renewal, Lemons said the contract had both advertising and strategic media components.

On Friday, Lemons said that neither TMP nor any of its other communications vendors received work outlined in the canceled RFP.

“The work envisioned under the RFP is not being shifted to other contracts. Instead, the work is either being done in-house or shifting business demands means the work is no longer needed,” Lemons said.

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