‘This is a very big campaign and a lot of companies are upset’
AD AGENCIES are challenging the granting of a £1 million contract for promoting the euro to a company they say does not fulfil the necessary criteria.
Now the Advertising Agencies Association (AAA) has stepped in to back several of the losing companies in the euro campaign bidding war.
Three of the companies have already obtained a court injunction blocking the contract. This expires on December 28. The issue is also before the Tenders Review Committee, which may announce its decision today.
The AAA has now lodged a formal complaint with the Finance Ministry. Many of the big agencies question how a company that suddenly appeared three years ago could have been given up to four huge government contracts worth millions in that time.
“The association went to see the Finance Minster Michalis Sarris and submitted a memo with all of its objections to such an important campaign being awarded to a venture that does not include an ad agency,” said an industry insider.
To add insult to injury, as well as recently being initially given the euro information campaign, the same company was awarded a new £8 million contract by the Cyprus Tourism Organisation (CTO) only this week.
Previous contracts included projects for the Human Resources Development Authority, and the State Fairs Authority and an earlier CTO contract, just after the company began operating.
“The company had no track record and it suddenly got a big contract from the CTO in 2003, and it has again just now been awarded another huge contract from the CTO worth £8 million,” said the insider.
He said normally government tenders require a track record of up to five large accounts before considering any company for a job. He also said a number of multinationals were considering challenging the CTO contract.
The company in question Epistele Communications & Media went into partnership with the long-established Action Public Relations for the euro campaign, as the tender called for an Advertising/PR agency for the job.
Epistele was formerly an offshore company named Wextel Communication, which dealt in satellite dishes before 2003 when it changed name.
The venture with Action was awarded the euro contract in October. However three of the six losing applicants took legal steps to block the signing of the deal.
They claimed that Epistele was not an ad agency, and was not entitled to operate in Cyprus as it had not changed its Articles of Association, which set out the main activities of the company as it is registered.
These reportedly provide for the company to exclusively operate outside of Cyprus, and make no provision for it to carry out advertising activities
A joint statement issued by Action and Epistele published on Sunday rubbished the claims.
A representative of Action said yesterday the company had changed its constitution when it changed name.
“The issue is with the tenders review board,” said the representative. “They have not announced their decision yet but we expect that in a matter of days we will be able to announce that we have signed the contract with the Ministry”.
Action dismissed any suspicions over the awarding of what appears to the other agencies to be a large number of government contracts.
“We know the Human Resources Development Authority is very strict with their procedures and would not allow someone to work for them if it wasn’t legal,” the representative said. “This is a very big campaign and a lot of companies are upset.”
According to Action, the tender requirements asked for an Advertising/PR company to carry out the campaign. “We are PR and Epistele is advertising,” she added.
Demetris Grigori, one of the directors of Epistele insisted yesterday that the company was an advertising agency. He said Epistele had never applied to become a member of the advertisers association and did not need to conform to their particular criteria to be an ad agency.
“We have been an ad agency since 2003,” Grigori said. Commenting on the outcry by his competitors, he added: “This is the Cypriot mentality. No one likes to lose. Is it wrong to get contracts if you beat the pricing? If you give reasonable prices and you have a communications strategy, you get contracts”.
Grigori confirmed that Epistele had just been awarded the new multi-million pound CTO contract although he said it had not been signed yet. “We have nothing to hide,” he said.
It is understood that the Finance Ministry is very strict when it comes to the tenders procedure as it is one of the prime guardians of open and fair competition. The euro campaign competition was assigned to a technical committee, which made the assessment and reached a decision.
The advertising industry insider said there was no question of casting any doubts on Finance Minister Sarris about the procedures followed. “Everybody knows the Finance Minister is clean,” he said.
Asked if other agencies took issue with the fact that another agency associated with the wife of Foreign Minster George Lillikas was one of the applicants for the Finance Ministry contract, the insider said that was “a question of political ethics rather than agency ethics”.
Officials at the Finance Ministry did not want to comment yesterday other than to say they outcome of the Tenders Review Board was being awaited.
Asked if the delay would hold up the start of the euro information campaign, one official did say that although the campaign had already begun, the contract related to the intensification period. “The sooner this is all sorted out the better,” said the official. “This is urgent for us.”
??
??
??
??
