A.T. Kearney Establishes Internet Auction Unit After Supporting $1 Billion in Transactions in First Eight Months

New Unit to Compete Head-to-Head with FreeMarkets Online, Others in Fast-Growing B-to-B Auction Space

SAN FRANCISCO, California (December 7, 1999) Global management consulting firm A.T. Kearney today announced the creation of a new worldwide business unit focused on business-to-business Internet auctions. The new unit competes on depth and breadth of services with FreeMarkets Online and
other emerging players in the fast-growing market for auctions and Web-based strategic procurement services. Kearney said its Internet auction operations, launched earlier this year, have
handled upwards of $1 billion in transactions for more than 15 clients, including Sprint and Visteon Automotive Systems, in the eight months since the firm began offering auctions as part of its portfolio of Strategic Sourcing services. Single-auction transaction sizes have ranged from $5 million to $200
million so far. More than 200 suppliers have participated in auctions hosted by A.T. Kearney. A.T. Kearney developed Internet auctions as part of its Strategic Sourcing practice, based on the firm's deep understanding of how global supply markets work. Since 1995, Strategic Sourcing has helped
Kearney clients save an estimated $10 billion on the purchase of $62 billion in external goods and services.

"A.T. Kearney has been helping leading global companies re-invent strategic procurement for the e-business age," said John Egan, a vice president and member of the Kearney board of
management. "By creating a dedicated unit focused on Internet auctions, we see a real opportunity to leverage Kearney's unique Strategic Sourcing expertise and the latest in e procurement technology to create value for our clients, by helping them access worldwide supply markets quickly, efficiently and cost-effectively." Kearney's Internet auctions group builds on that success through web-delivered services, including downward auctions that replace traditional round-one negotiations with suppliers, cutting approximately 70 percent from proposal cycle times. Since Kearney's Internet auction service was launched earlier this year, participating companies have negotiated procurement agreements for purchases of $100 million or more in a matter of hours, rather than months. Three A.T. Kearney consultants have been named to lead the new Internet auction unit. They are: Tom Slaight, a New York-based vice president who is co-leader of Kearney's Americas Strategic Sourcing practice; Niul Burton, a San Francisco-based vice president with more than 16 years of experience in global sourcing; and Sarah Pfaff, a San Francisco-based principal with more than 15 years of strategy and marketing experience for Global 1000 corporations. A.T. Kearney's Internet auctions service addresses one of the largest and fastest growing business segments on the Internet. According to a recent A.T. Kearney study of global best practices in procurement, the world's 100 largest companies are expected to do $400 billion of business-to-business transactions via the Internet by 2001. A.T. Kearney's new unit will compete in the area of "downward" online auctions, in which corporate purchasers take bids for specified goods or services from suppliers over the Internet. Procurement categories for which Kearney expects to host Internet auctions in the coming year include: telemarketing; personal computer hardware and monitors; office supplies; printed materials; professional temporary labor; office temporary labor; and light industrial labor, among others.

A.T. Kearney's Internet auction process is believed to be the only business-to-business downward auction using the Web. Kearney's Web-based approach is easy to use and doesn't require suppliers to purchase software or pay a connection fee in order to bid, unlike other private network-based online auction methods. With Kearney's Internet auction, suppliers don't need special software or fee-based connections - only a Web browser and password. Any laptop connected to the Web will
link a supplier to an A.T. Kearney Internet auction. That means participation by larger numbers of qualified bidders. Internet bidding also means that buyers and sellers aren't dependent on corporate networks, which can fail at critical moments. In addition, A.T. Kearney Internet auction technology offers buyers "total cost functionality," enabling them to make purchase decisions based not only on price but also on multiple factors that they specify, which together make up the "total cost" of a
purchase. These factors may include quality, delivery time and customer service. For the first time, buyers will be able to compare competing bids online in real time and select a supplier based on a mix of priorities that together determine a total cost. The total cost approach will enable companies to
purchase up to 50 percent of their external spend via auction. In addition to Internet auctions, the new unit also will provide a broad range of strategic procurement services to help Global 1000 companies and their suppliers deal with e-sourcing needs.

"Because A.T. Kearney has worked closely with chief procurement officers for the world's leading companies, we know they want to partner with a broad-based auction provider, versus niche players focused in a few vertical markets or sourcing categories," said Niul Burton, the San Francisco-based vice president who is among the leaders of the new unit. "We expect to leverage Kearney's experience in working across a broad range of sourcing groups, from direct to indirect materials and services, in a wide variety of industries, to deliver better results for our clients." A.T. Kearney is one of the world's largest and fastest-growing management consulting firms, with 1998 annual revenues of more than $1.23 billion. With a global presence that includes offices in nearly 60 cities, spanning
major and emerging markets, A.T. Kearney provides strategic, operational, organizational and information technology consulting and executive search services to the world's leading companies. A.T. Kearney (www.atkearney.com) is the high-value management consulting subsidiary of global information technology services leader EDS (NYSE: EDS).

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