Editorial: BA e-bidding changes face of procurement

Any agencies that were not already considering the potential impact of procurement processes should take heed of the news that British Airways has found a new way of selecting its European PR consultancies.

BA, which already applies advanced procurement principles across many of its services - from catering to cleaning - is now doing the same with communications. Even more intriguing, it is employing techniques that feel more eBay than Whitehall.

Two weeks ago, having taken credentials from each of its four shortlisted agencies - in the form of an 'e-bid' - BA held its first PR 'e-auction' to finalise its selection.

Unfortunately for the agencies concerned, this was an inverse auction, encouraging the competing consultancies to lower their price.

It all sounds fairly nerve-wracking. BA holds an auction for each territory - France, Poland etc - and all four agencies log on for a seven-minute bidding process. They see where they stand against the other bidders and must decide on their cheapest bid by the final minute.

To be fair, BA is very open about its intentions, saying it simply wants to find the 'walk away' price of each agency, ensuring it gets optimum value for money. It insists that it will not necessarily select the cheapest agency, but will weigh the final bids against other factors, such as an agency's geographical network or the strength of its media/political contacts in that region.

Of course BA could be criticised for 'commoditising' PR, flying (no pun intended) in the face of the industry's determination to offer more valuable, strategic advice.

The counter-argument is that BA is simply being more transparent and professional about a process that occurs anyway. The final bid, it stresses, is legally binding for the duration of a three-year contract.

Like it or loathe it, BA is committed to this process, as senior management enforces efficiency on its comms department. And, in these days of tightening corporate controls, don't expect such techniques to be confined to the airlines.

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