OGILVY & MATHER NORTH AMERICA AGREES TO PAY U.S. $1.8 MILLION
FOR OVERCHARGES ON A CONTRACT WITH DRUG CZAR'S OFFICE

WASHINGTON, D.C. – The U.S. subsidiary of one of the largest advertising agencies in the world has agreed to pay the United States $1.8 million to resolve claims that the company overcharged the Office of National Drug Control Policy (ONDCP), the Justice Department announced today.

Ogilvy & Mather North America agreed to pay the government to settle claims under the False Claims Act and administrative claims that the firm overcharged ONDCP, also known as the Drug Czar's Office, in 1999 and 2000 for labor costs on a contract to provide advertising services. Ogilvy will pay $689,744 in cash and will submit amended administrative claims for incurred costs on the contract to reflect a reduction in incurred costs claimed of $1,150,256.

"This settlement illustrates the United States' determination to recover funds inappropriately billed on government contracts," said Robert D. McCallum, Jr., Assistant Attorney General for the Civil Division.

Ogilvy & Mather has a cost plus fixed fee contract to provide advertising services for ONDCP. Under the contract, labor hours were charged on the basis of time records reflecting the proportion of an employee's time spent on the contract. The settlement resolves allegations that Ogilvys' labor charges in the advertising firm's invoices for work performed in 1999 and 2000 were based on inaccurate timesheets submitted by employees and that the company's management did not exercise reasonable control to ensure that billings for labor were accurate.

The government's claims were based upon an investigation conducted by the Department's Civil Division, the U.S. Attorney's Office for the District of Columbia, the Investigative Support section of the Defense Contract Audit Agency and the Office of Counsel of ONDCP.

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