DDB Chicago Slapped With $100 Million Lawsuit Over Army Contract

Omnicom's DDB Chicago has just been slapped with a $100 million lawsuit in the U.S. District Court for Northern Illinois for fraud, breach of contract, negligent misrepresentation and other charges related to its pursuit of a mammoth 10-year $4 billion U.S. Army recruitment contract, which it won in 2018.

At issue is a complaint by a small minority-owned New York agency, Hero Group, which claims in court papers that it spent two years helping DDB win the account, with the understanding that it would receive a significant portion of billable work if DDB prevailed in the account pitch.

Hero said it had a written “teaming agreement” with DDB that spelled out that Hero would become a subcontractor if DDB won the primary account. The Army required that DDB subcontract out about 40% of the work to small businesses.

“Having never identified Hero Group to the Army in contravention of DDB’s representations and promises to Hero Group, DDB froze this minority-owned business and its minority owners out of any work or other benefits under the prime contract,” Hero alleged in its complaint.

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“Accordingly, DDB got what it wanted from Hero Group, and was awarded the Prime Contract. Its ‘partnership’ with Hero Group turned out to be little more than a fraudulent ruse,” the agency added.

In addition to $100 million for “general damages,” Hero is seeking compensatory and punitive damages and other costs.

DDB won the Army contract after a lengthy review in which it prevailed over longtime incumbent McCann, part of Interpublic.

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