NAVY HIRES AGENCY FOR ANTI-DRUG ADS

WASHINGTON - An advertising agency criticized for overcharging the
government for ineffective anti-drug ads has won a $152 million contract to
run the ad program for at least another year.

New York-based Ogilvy & Mather was awarded the contract Wednesday, beating
out four other bidders, the Navy said in a statement. The Navy handles
contracting functions for the White House Office of National Drug Control
Policy.

Ogilvy & Mather agreed to pay a $1.8 million penalty this year to settle
charges it overcharged the drug policy office. Congressional investigators
found last year that Ogilvy & Mather billed the government for millions of
dollars of work it did not perform.

The advertising firm took steps to fix the problem and was not banned from
getting future contracts, said Tom Riley, a spokesman for the drug policy
office. Riley said Navy contract officials decided on their own that Ogilvy
& Mather's past problems were not enough to keep it from getting the new
contract.

No one was available to speak with a reporter at Ogilvy & Mather's New York
offices Wednesday evening, said a security guard who answered the telephone
there. A message left with the firm's Washington office on Wednesday was
not immediately returned.

Ogilvy & Mather initially landed the anti-drug contract in 1998 in a deal
that would have been worth nearly $700 million if it had been renewed for
all of the contract's five years.

The drug policy office chose last year not to renew the Ogilvy & Mather
contract for its final year, 2002.

The latest contract, which also includes four one-year extension options,
would be worth $762 million over the full five years.

John P. Walters, director of the drug policy office, has repeatedly
criticized the ad campaign, saying teen-agers were ignoring the ads. In
May, he said the office would cancel the campaign if it was not effective.

A survey released in May also found no evidence the ads were discouraging
drug use.

Instead, the survey charted an increase in drug use among some teen-agers
who saw the television ads. But it noted that further analysis was
necessary before the ads could be directly tied to the increase. The survey
was conducted by the private research firm Westat and the University of
Pennsylvania.

Riley said the ads will be refocused to be more hard-hitting and all will
be tested before they run. An example of the new tone is a series of ads
that link drug use to money for terrorists.

The portion of the ad campaign that seeks to help parents keep their
children from using drugs has been successful, Riley said.

"We want to keep emphasizing the parts that are working," Riley said.

On the Net:

Office of National Drug Control Policy: http://www.whitehousedrugpolicy.gov