By Trevor Johnson
Trevor Johnson serves as director of the International Currency Exchange (ICE) Plc, a UK-based firm with over 30 years experience in providing foreign currency. ICE has some 200 branches across Europe and North America and is expanding in the Asia-Pacific region following the opening in June of two locations at Sydney International Airport. ICE services are available at most of the world’s busiest airports including London Heathrow, Dublin, Toronto, Montreal, Vancouver, New York JFK and La Guardia, Los Angeles, and Miami.
A call for a more ethical and fairer approach to tendering, or bidding, for airport contracts comes from Trevor Johnson, director of London-based International Currency Exchange Plc. At the recent Airports Council International AIRPORT BUSINESS 2002 conference in Miami, he urged ACI to set up an Ethics and Procedures Committee to establish ¯ and enforce ¯ a code of practice designed to make the tendering process more honest and transparently above board. Here, he elaborates on his position.
Most airports operate their tendering processes in a fair, professional, and honest manner, but it is the actions of the minority which are tarnishing the image and reputation of the industry. A number of current malpractices include:
- Financial benchmarking;
- Misinformation in pre-tenderdocuments; and
- Post-tender negotiations.
Often, incorrect facts are published in pre-tender documents and the information needed to correctly evaluate the business opportunity is not included or available. The source for the information is often the present incumbent with the publisher — the airport — relying on the usual disclaimers. The information may not be fictitious, but it can be so ambiguous that it is misleading.
Turning to post-tender negotiations, there is a process whereby the winner of a tender subsequently loses the contract because another bidder has returned after the deadline with a higher offer. This is a situation that our company has suffered from on a number of occasions and one about which we feel particularly strongly.
Too often the successful company — the company that has demonstrated its ability to operate the airport’s concession — has submitted the highest bid and been declared the winner. It later finds that it will lose out to one that has submitted a lower bid. The loser has subsequently gone back to the airport, upped the ante, and negotiated a new deal.
There are also problems inherent in the lobbying process. How can the best interests of airports, concessionaires, and customers be best served by a clandestine practice operating without any rules or regulations?
The solution to these problems is for ACI to enforce a code of practice which encompasses four key elements:
- Quality service standards; and
Everyone involved in the tendering process must be prepared to be held accountable for their actions — and the consequence of their actions.
Tenders should not be judged and awarded solely on a financial basis, but also according to the level of quality of service they offer customers. It is, after all, they who at the end of the day keep us all in business.
No code can be effective if it doesn’t have teeth. Abusers of the code should be punished financially and, if the offense warrants it, drummed out of ACI.
These core elements — transparency, accountability, service standards, and effective penalties — are key to any ethical process. It is by adopting these principles that we can reform the current situation and rid ourselves of the abuses that can, and do, take place.
The problems with tendering processes at airports are not confined just to the business of foreign exchange, nor are all airports guilty of such malpractices.
Obviously, my comments are prompted by the experiences of my company and my own first-hand knowledge of the abuses which take place, but it isn’t just retail concessions which suffer. The problem faces all companies tendering at airports, whether retail, construction, catering, maintenance, or whatever.
Also, I would not wish to be seen to be criticizing all airports. We are constantly in discussions with airports around the world, and most act in a completely proper and open handed manner. But while it may only be a minority which manipulates the system, usually for financial gain, it works against the interest of customers and, ultimately, the airports themselves. I strongly believe that this minority should be brought into line. Here, ACI has a vital role to play.
I hope that ACI will accept the concept of a code of practice and put the wheels in motion to establish a system which is beneficial to everyone concerned: the concessionaire, the airport, and the customer.