O&M admits billing errors in US government contract

by Camilla Palmer, Brand Republic 13-Dec-00

Ogilvy & Mather has admitted that there may have been some billing errors in its White House anti-drugs campaign.

LONDON (Brand Republic) – Ogilvy & Mather has admitted that there may have been some billing errors in its White House anti-drugs campaign.

Problems were first highlighted two months ago. The agency has since called in PricewaterhouseCoopers to look at its books and has now gone to the US Justice Department with its findings.

The agency was accused of altering time sheets for work done on the anti-drug account in the summer, after a former employee claimed that hours were added after agency executives complained about a lack of revenue.

The government responded by withholding fees owed to O&M, which said it was waiting for $13.5m as part of a total payment of $187m for work it did on the account.

A memo circulating the White House said the agency’s charges for the job were “higher than the standard industry price”.

O&M played down the dispute, claiming it was part of the normal bargaining process between itself and the government, but the hiring of PricewaterhouseCoopers indicated how seriously the allegations were being taken.

The agency said, “We recognise that as a first-time government contractor, our administration of some accounting aspects did not meet the rigorous record-keeping practices imposed on federal contractors.” The statement added it would work to correct any mistakes.