CHICAGO: Ogilvy Public Relations Worldwide has confirmed that it has terminated a $9 million contract with the California High-Speed Rail Authority.
"We feel it's in the best interests of both parties, and I can say in all honesty that we believe in the project and will keep rooting for it to succeed," Michael Law, president of Ogilvy West, wrote to PRWeek via email. The agency's offices are closed today for the July 4th holiday.
According to a letter written by the agency to the authority on Wednesday, and obtained by the Sacramento Bee, Law wrote: "We were unable to develop a solid working relationship with your agency, and that impeded the kind of top-notch work we are accustomed to providing our clients."
Ogilvy's four-and-a-half-year contract to promote the state's $43 billion rail project has been publicly criticized by former state Sen. and former rail authority board member Quentin Kopp, who had asked for the contract with the PR agency to be terminated.
Rachel Wall, press secretary for the California High-Speed Rail Authority, said the contract will be rebid, and will go before the board of directors on July 14.
"Outreach and communicating with the public is critical to the success of the high-speed rail project, and so we believe it prudent for our board to stake stock of our current efforts and perhaps refocus those efforts moving forward as we get closer to beginning construction next year," she said.
Ogilvy secured the contract in November 2009, following a competitive bidding process. The contract had previously been awarded to Mercury Public Affairs in September 2009, though questions from board members and the news media about the agency's ties to then-Gov. Arnold Schwarzenegger's office caused a second RFP to be issued, which Mercury declined to pitch.
“The process we went through was solid and we would defend it to the wall,” Jeffrey Barker, deputy director for communications, policy, and public outreach for the California High-Speed Rail Authority, said at the time. “We went by the state's procedures and it was a very clear and unanimous decision. However, with a project this size, this important, we want to go above and beyond in order to convince Californians that this is an example of a government project done right.”
$2.5 million has already been paid out to Ogilvy, and the authority is looking to replace the agency, according to published reports.