Friday, June 16, 2017

More DPS follies.....

A local ad agency is fighting a battle with the Mississippi Department of Public Safety over the payment of advertising invoices.  Media outlets in Mississippi are owed nearly $700,000 for DPS's advertising campaigns.  DPS says the agency must pay the bills first and then get reimbursed.  The ad agency claims the state is supposed to pay the invoices when presented instead of proof of payment by the agency.  The Clarion-Ledger reported yesterday:

The owner of a local ad agency says she’s been left holding the bag on nearly $700,000 in bills for Department of Public Safety buckle-up and anti-drunk driving ads run by dozens of media outlets statewide around Christmastime.
DPS officials said they are simply following terms of the contract with the agency and federal regulations, and will reimburse the ad agency only after it pays all the media bills. But the agency says DPS has for years paid the media bills as a “flow-through,” not as reimbursement to the ad agency, and also points to the contract....

 “As a result of this, many Mississippi companies and their employees are being damaged,” said Carol Mann, owner of the Mann Agency in Ridgeland. “… We are a small business, and we would never have agreed to finance their ad campaign. We are not the bank.”



Mann says more than 70 media outlets, including television, newspaper, radio and billboard companies and colleges, are owed about $680,000 for running ads or holding events around the holiday season (The Clarion-Ledger is not one of the outlets owed money). The total bill, including Mann’s fees and expenses, is $712,000.
Mann said that because of the long delay in paying the media companies, many ad salespeople have lost, or had to repay, their commissions. Media outlets have been complaining to the Mann Agency and DPS about overdue payments.

 Mann’s agency since 2008 — except for 2013 when another company was chosen — has contracted to run federally funded public safety ad campaigns for DPS. These include “Click It or Ticket” and “Drive Sober or Get Pulled Over” ads. States’ agencies are essentially required to run localized versions of the federal public safety ad campaigns, or risk losing other federal safety or highway funding. Experts say the awareness campaigns reduce drunken driving and increase seat belt usage, saving lives.....
 Ouch.  However, there is more to the story.

“Beginning in 2010, they wanted to shift the paperwork burden to us,” Mann said. “So the contract was changed to where (DPS) paid us and we dispersed the payments. This is a lot of media statewide and a lot of little checks. We agreed to do this service for them … The arrangement worked satisfactorily.”
 It worked well apparently but since this is the government, no good practice goes unpunished.

Mann said that last year, after Ray Sims was appointed the new director of Public Safety Planning and made staff changes in the office she deals with, she and DPS ran into payment problems. She said DPS ran months overdue in paying about $600,000 for ad campaigns that starting running in May that year.

 Mann said a new staff attorney at DPS told her she would have to pay the media outlets first, provide proof of payment and then request reimbursement. But she said she met with Sims and others and he agreed the payment practice would continue as it had since 2010.

JJ can report the "new staff attorney" was one Nicki Boland.  Google her name.  She is no longer employed at the agency.

“(DPS) paid the overdue invoices to the Mann Agency and we in turn paid the media outlets,” Mann said. Mann said she was hesitant to continue the work after the issue arose last year. But she said DPS late last year said it wanted to run ads during the Christmas holiday, and she was concerned the agency would lose federal funding if they weren’t turned around promptly.

Mann said she asked for written confirmation that payment would continue as it had, but DPS ignored these requests. But then on Dec. 5 the director of Public Safety Planning’s accounting and auditing bureau came to her office, and assured her the agency would be paid promptly if it placed the ads and submitted invoices, Mann said. But instead, Mann said, DPS terminated its contract with her on Jan. 4, and has not paid the ad bills. Sims would not comment on the issue.
The original 2014 contract states (posted below):

Contractor shall pay all media placement and production costs and be reimbursed by the MOHS (Mississippi Office of Highway Safety) upon presentation of detailed media invoices... (p.17 of contract)
 B. The Independent Contractor will bill MOHS (DPSP-MDPS) for its rendered services on a regular monthly basis. The Contractor will be compensated only for work completed as outlined in the Scope of Work. Following the satisfactory completion, as determined by MOHS (DPSP-MDPS), of its monthly services, Independent Contractor shall submit invoices to MOHS (DPSP-MDPS), with the appropriate documentation, on or before the last working day of the month, except that the final invoice may be timely submitted within five working days....) (p.6)...

 All media purchases will be completed on a flat rate rather than commission. Further, all advertising, production and any other money is "pass through" and not subject to any general and administrative (G&A) fees or profit. Contractor shall pay all media placement and production costs and be reimbursed by the MOHS upon presentation of detailed media invoices. (p.8).... Rest of article.
Mann is in a tough spot.

Kingfish note:  No state money is spent on this contract (Yes, I know it is still OUR money.).  Federal grants to the state require that part of the federal (our) funds be used for advertising purposes.

The DFA website states the contract is $6,385,485.90 and ended on February 28, 2017.  

17 comments:

Anonymous said...

A small private agency does not have cash like that on hand. They should be able to produce invoices from each media outlet, and the department could issue one check for the full amount to the agency to disperse or they could issue individual checks to each outlet.

Anonymous said...

Man, this place is boring on Fridays! It's like doing all Rick Cleveland all the time.

Anonymous said...

Hey Clarion Ledger:

Not that the written word is important in your business, but

A person (or agency) DISBURSES money.

A policeman DISPERSES a crowd.

Anonymous said...

I won't do business with the government any more, I have had them run out of money but want 5 grand a month worth of work with the promise to catch up 7 months later. They asked when they were 3 months in arrears already. No thanks.

Anonymous said...

@12:33 PM, they found Sam R Hall after an exhaustive nationwide search.

Anonymous said...

20 years ago I worked for an organization that had contracts when this agency and they never paid on time. These were Federal funds and we knew the rules in side and out the agency did not. They has no clue about accounting and cost principals so they just lied alot. Some times we were never paid even when a product was finished and approved. Finally quit bidding on their work. Some things never change.

Anonymous said...

These departments like the hi way commissioners have to advertise using current commissioners in their ads to prevent them from having to pay for their "reelection" ads.

Anonymous said...

Where did the money go? Federal grant money cannot be spent for other purposes. This state spends an enormous of state and federal funds on advertising which often coincidentally features politicians running for office.

Anonymous said...

Ms Mann has made quite a bit of money off this sweetheart contract she has had for more than a decade; amazing how everybody jumps on her side here when other 'contractors' with the state get condemned daily.

This was a crappy application of the contract - although it appears to be the exact wording of the contract that the agency and Ms Mann signed -- by the (Attorney General's assigned) attorney for DPS. But, it does stand up to the smell test; in fact should have been being done for years.

If poor Ms Mann couldn't handle this issue, she should do what other small businesses have to do - go to the local bank, assign a copy of the contract, and borrow enough money to pay the media outlets. Once done, DPS would process her payment. The interest incurred for a less than 60 day loan isn't going to rupture her commission rate built into the contract.

She doesn't want to do it in this manner in the future? Fine. I'll guarantee you that there are several media placement firms that have been trying to get into this DPS honeyhole for years but couldn't get past whatever hold she had on the bureaucracy. And I'll guarantee that some of them will be able to take the contract under the conditions included.

She doesn't like this solution; negotiate another contract - but if the state is going to be expected to continue financing her business, she should be reducing her rate.

Anonymous said...

Why does the DPS need to advertise? $700K could help a lot of Mississippians who are TRULY handicapped, ect.

Anonymous said...

Because the feds give it to the state and require a 'seat belt program' a 'drink and drive program, a'child seat prigram' in order to qualify for other federal grants. Bullshit, true. But it's part of mama government taking care of us.

Kingfish said...

9:04: Why don't you try reading the post from start to finish?

Anonymous said...

9:56; Because from start to finish is really, really boring. Please see reference earlier to Rick Cleveland.

It's contracts like this dumb shit that keep geniuses like Gallo and JT on the air. If DPS would only contract with Jambalaya, we wouldn't see the 'hat in hand thread' asking for donations.

Anonymous said...

8:31 PM I would have doubts a local bank would lend on a disputed state contract.

Anonymous said...

And who runs DPS now? Marshall 'FU All I do what I want" Fisher. Mann is screwed.

Anonymous said...

5:41, yes we would loan on it in a minute. Its not a 'disputed contract' - all that is required, at least according to this report, is that the vendors be paid first. Once a receipt for the payment is produced then the state would pay the contract. A simple assignment of the contract should suffice - assuming all other facts of the story are correct

Anonymous said...

I think that DPS - Office of Public Safety Planning was funding the advertising through a NHTSA grant. Then hired an advertising firm for Click It Or Ticket and Drive Sober Or Get Pulled Over National blitzes. All funding through NHSTA is reimbursed, not paid at the point of transaction.

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