Appearances matter
The Love Field concession contracts have been much in the news lately. At the council meeting last week, I expressed my concern that the contracts proposed by the staff and recommended by the Transportation Committee would extend contracts to the existing concessionaires without looking at other qualified bidders.
The mayor has appointed me to serve on an ad hoc committee to look at the contract and come back with a recommendation by the end of June.
I want to give you more background and this is a complicated issue so please bear with me as I explain.
Love Field is being rebuilt and the new terminal will have about 51,000 square feet of concession space compared with about 27,000 feet today. Under a proposed contract which was developed with a consultant who is an expert in airport concessions, the existing concessionaires would get about 27,000 square feet in the new terminal. It is the consultant’s opinion that an airport can get just as good a deal with a negotiated contract as with a bid contract.
The issue is complicated by the construction of the new airport and the fact that existing concessions will have to transition to a close while others are opening in the new facility. But this should not be a sticking point.
An airport makes money on concessions by getting a percentage of sales. However the highest percentage is not necessarily the best deal. If the percentage is too high or the bidder is not experienced the chances increase that the concessionaire will be forced out of business or provide poor service.
It is in the interest of Love Field that concessionaires be experienced, that the stores have good variety and appropriate price points. The highest bid may not be the best bid. However, it is important that all qualified bidders have a chance to bid on all 51,000 square feet.
A process called a "request for bid" is used by the city with certain contracts for services that require certain kinds of expertise. It invites those interested to bid on the contract and can create a weighting system so that the percentage rent offered is just one of a number of criteria examined in awarding the contract. I want to pursue this as a possible way to open this contract for bids.
Appearances matter. It is imperative that we be open and beyond reproach with no hint of impropriety. The proposed contract does not look fair because it gives the incumbent vendors a new contract without opening it up for other vendors.
