March 6, 2007
As the Business Development Manager responsible for creating the business plan for your company, it can be very challenging to gain a perspective of opportunities over the several years; and from that, determine the specific opportunities to pursue.
This week we are going to look at the opportunities for Public Relations Agencies (NAICS 541820). To understand this NAICS code better, epipeline has asked the following questions:
· What is NAICS 541820?
· Who issues the contracts?
· Who wins the contracts?
· How are these contracts procured?
Please note, the information in the following sections is pulled from epipeline's Contract History Plus feature, which sourced by the Federal Procurement Data System (FPDS). Please note, the contract spending for fiscal years 2005 and 2006 have not been widely reported, especially by the Department of Defense. The total values reflect only reported spending, not necessarily actual spending.
What is NAICS 541820?
NAICS 541820 is used for firms that design and implement public relations campaigns. The campaigns are focused on promoting the image and interests of the government buyer. These services may include lobbying, political consulting, or public relations consulting.
This NAICS was previously represented by Standard Industrial Classification (SIC) code 8743, as it related to the following topics:
· Lobbying services
· Lobbyists' offices
· Political consulting services
· Public relations agencies
· Public relations consulting services
· Public relations services
The size standard associated with NAICS 541820 is $6.5 Million (effective July 31, 2006), which means that a company, including its affiliates, would be considered a "small business" if their average annual gross revenue does not exceed $6.5 Million for the past three years.
Total reported spending under NAICS 541820 in FY03 was over $190 Million. FY04 saw an increase, to over $242 Million. Spending for FY05 and FY06 are not as widely reported as the previous fiscal years, so those values are significantly lower ($154 Million for FY05 and $169 Million for FY06). This does not necessarily mean those years saw decreased spending, rather, it indicates that many agencies have not reported all of their contract data to the FPDS yet.
Who issues the contracts?
The Department of Defense (DoD) was by far the largest buyer for these services for the last four fiscal years (FY02 through FY06), with over $340 Million in contract spending, comprising over 45% of the market share for NAICS 541820. This value may include all components of the Defense Department (Army, Navy, Air Force, DLA, etc.), however, FY05 and FY06 contract dollars have not been reported yet (at least as far as FPDS data).
The Department of Health and Human Services (HHS aka DHHS) was a distant second, with over $150 Million and over 20% of the market share. The Department of Homeland Security (DHS), the Department of Labor (DOL), and the Department of Interior (DOI) rounded out the top five.
Who wins the contracts?
According to the Central Contractor Registry (CCR), there are 1,928 companies registered under NAICS 541820 (source: active registrants, www.ccr.gov as of 02/15/2007). Of this number, 1,650 qualify as small businesses. The two charts below identify the top 10 Companies, by market share, for the period of FY02 through FY06. The first chart represents the top 10 companies that were awarded their contracts under ANY type of competition, whether it was full and open, small business set-aside, sole-sourced, etc. This list primarily consists of large businesses. The second chart, however, lists the top 10 companies that won their contracts under RESTRICTED competition. Specifically, epipeline limited this to those contracts awarded under the following acquisition strategies:
· 8(a) Competed
· 8(a) Small Disadvantaged (SDB) set-aside
· 8(a) sole-source
· SDB set-aside
· SDB, 8(a) with HUBZone
· Combination HUBZone and 8(a)
· HUBZone set-aside
· HUBZone sole-source
· Service Disabled Veteran-Owned Small Business (SDVOSB) set-aside
· SDVOSB sole-source
· Emerging Small Business set-aside
· Very Small Business set-aside
· Reserved for Small Businesses ($2501 to $100,000)
· Total Small Business set-aside
The J Walter Thompson Company holds the top spot on the unrestricted competition list, with over $160 Million in total contract dollars for FY02 through FY06 - over 23% of the market share. They are also listed in the 9th spot, as "J Walter Thompson Company/Atlanta" with just under 2% of the market share. The contract dollars were specifically reported by these different company names.
The second spot is held by Dayna International, Inc. Their contract
dollars for the same period was over $90 Million (Dayna holds the second spot on
the restricted contractor top 10, as well). Fleishman-Hillard, TMP Worldwide,
and Parsons Infrastructure & Technology hold the remaining spots in the top
five. Only the top 10 listings had combined reported contract spending for this
period (FY02 through FY06) over $10 Million.
as this is a listing by Company name, rather than PARENT company,
some companies may have more than one ranking, which is not reflected in the
The combined contract spending for contracts awarded under "restricted competition" totaled over $28 Million for FY02 through FY06. Gaver Technologies, Inc, tops this list with over 16% of the restricted contract spending, which equates to over $4.7 Million. Dayna International, Inc., is a close second, with $4.4 Million and over 15% of the market share. Dayna International
Only the first six firms have reported contract spending for this period valued at over $1 Million. PLEASE NOTE: as this is a listing by Company name, rather than PARENT company, some companies may have more than one ranking, which is not reflected in the chart below.
How are these contracts procured?
A significant percentage of contracts with spending during the FY02 through FY06 timeframe under NAICS 541820 did not report their acquisition strategy. This could include contracts awarded using full and open competition, small business set-aside, or any manner of restriction. This accounted for over 76% of the market share - over $575 Million in contract dollars. Full and Open (unrestricted) competition held 20% of the market share, equating to over $150 Million. Businesses of any size and type can compete for these contracts. By comparison, contract dollar totals for this period for all other acquisition strategies combined, was only $28 Million. The breakout of this segment of reported acquisition strategies is described in the second pie chart below.
Almost 60% of contract dollars (from the 'All Other Strategies' described in the chart above) were set aside for small businesses. This represented over $17 Million in reported contract spending over the FY02-FY06 period. Over one-fifth of the market share was held by contracts that were sole sourced to 8(a) firms - this may include those that were to Alaska Native Corporations. 8(a) competitive procurements held over 14% of the market share, while all other reported acquisition strategies, including SDVOSB and "Buy Indian" contracts were below 1% of the market share.
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