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CHAPTER 10 Procurement This chapter presents approaches, practices, and strategies for soliciting and selecting conces- sionaires. Once the concession plan is prepared and the program is ready for implementation, selecting the best tenants may be the single most important responsibility of the concession man- ager. Following sound procurement practices can also help avoid protests and challenges to the procurement process. This chapter covers the following: • Concession procurement approaches • Requests for proposals—the standard practice • Minimum qualifications • Typical elements required in proposals • Evaluation criteria • Financial evaluation • Advertising the RFP • Issuing the RFP • The preproposal conference • The evaluation process • Converting the proposal to a concession agreement • Streamlining the RFP • Concession workforce issues • Strategies for increasing local participation • Using technology to streamline the solicitation process • International concession contracting practices 10.1 Concession Procurement Approaches U.S. airports and passenger terminals with few exceptions are publicly owned, and, therefore, the public procurement requirements established by the airport’s governing body must be fol- lowed. Airport authorities have adopted policies that are consistent with the specialized needs of airports. Operators of airports that are units of a city, county, or state government typically follow more general and less efficient procurement requirements that may place additional burdens on the airport operator. Nevertheless, the fundamental practices in selecting concession tenants are the same regardless of the form of governance. The competitive proposal or Request for Proposals (RFP) process is the standard industry approach for soliciting, evaluating, and selecting concessionaires. However, other approaches are also used, depending on the nature of the desired concession or service. 155

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Procurement 159 Proposals received in response to an RFP are typically reviewed by a panel of evaluators, which, depending on local procurement requirements, may be called an evaluation panel, selection panel, selection committee, or other name. Evaluators, depending on local laws or ordinances, may include airport staff members, local citizens with some background in the subject matter, airport board members, employees of sister agencies, and outside experts such as consultants or staff from other airports. At some airports, concession staff may be included as evaluators, while at other air- ports, these staff members serve as nonvoting facilitators. Each airport operator has its own set of internal policies with respect to the award of conces- sion privileges. In the case of airports operated as a department of city, county, or state govern- ment, or by appointed dependent authorities of a larger unit of government, the airport operator’s concession procurement policy is shaped by local and/or state law or ordinance. The typical sections of an RFP are shown in Table 10-1. The descriptions of “typical” elements of RFPs should be considered as generalized descriptions of common industry practices that should be adapted to applicable local and/or state law. Table 10-1. Typical contents of a request for proposals. 1. General Description of the Business Opportunity − Airport operator’s goals for the concession program − Schedule for the process − Pre-proposal conference − Other requirements 2. General Airport and Airline Information − Airport and service area − Airlines and the destinations they serve − Historical passenger statistics − Description of the current concession program, including space and sales 3. Detailed Description of the Business Opportunity − Locations − Packages (if more than one) − Key business terms − Airport operator’s goals, brands, local concepts, etc. 4. Other Doing-Business Issues − Support space − Deliveries by suppliers 5. Development Requirements − Design standards/guidelines − Design review − Turnover date − Condition of space at turnover − Construction coordination − Utilities 6. Submittal Requirements − Minimum qualifications − Financial terms and variables – minimum annual guarantee (MAG), percentage rent, minimum investment requirement − Other technical information (see Table 10-2) 7. Evaluation Process − Criteria and weighting − Selection process − Interviews 8. Attachments − Draft concession agreement − Required forms − Submittal checklist − Design standards/guidelines − Lease outline drawings

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