5/30: Airport concessions contracts

Moderated by Rick Badie

The international terminal at Hartsfield-Jackson International Airport sits shiny and new. But former U.S. Congressman Bob Barr writes that the city’s handling of concessions contracts for the $1.4 billion terminal dulls its glamour and has left a smudge on the city’s reputation. Atlanta Aviation General Manager Louis Miller says the selection process to award contracts was transparent, above-board and doesn’t warrant scrutiny. It is time to end the meritless attacks, he writes. Read what they have to say and comment.

An earlier version of this post inferred that the City of Atlanta certified airport vendors. GDOT and MARTA certify vendors seeking certification as “disadvantaged business enterprises” in order to compete for concessions contracts at Hartsfield-Jackson International Airport.

Airport contracts sully city

By Bob Barr

The recent, long-delayed opening of the new international terminal at Hartsfield-Jackson International Airport should have been a joyous event, cementing the city’s stature as a true, international metropolis.

Unfortunately, the process leading up to the terminal’s opening — specifically, the bungled process of awarding contracts for the many concessions vying for travelers’ dollars as they pass through the new terminal — has left a smudge on the city’s reputation.

It will linger far longer than the glamour of the opening celebrations. The black eye the city now sports was entirely self-inflicted.

Atlanta certainly is not unique among major cities when it comes to questionable procedures surrounding the awarding of lucrative municipal contracts. However, with the eyes of the world upon us, the tin ear exhibited by the mayor’s office and the City Council in failing to ensure the concessions-awarding process was absolutely transparent and squeaky clean is difficult to understand.

The city has won a few legal skirmishes in defending its contract-evaluation process against what appear to have been legitimate challenges by businesses passed over for concession contracts. The city has trumpeted those proceedings as conclusive evidence it did absolutely nothing wrong during the entire bidding process stretching back to last year.

A news release issued late last month, for example, proclaimed the city fully exonerated of any wrongdoing whatsoever, simply because a city procurement hearing officer sided with the city.

As any student of the law knows, there is a clear distinction between winning a lawsuit based on evidence and findings that none of the charges was proved, and winning a preliminary motion or an administrative hearing based on far more limited evidentiary findings, as was the case here.

Moreover, it appears at least some of the losing bidders, which included small companies that have been operating successfully at the airport for the past decade, simply did not have the resources to engage in a protracted legal fight.

Perhaps even more important than the status of these legal challenges is that deficiencies in the bid process have caught the attention of the federal government. Specifically, the Federal Aviation Administration has put Atlanta on notice that the determination that at least four businesses submitting winning concession bids qualified as “disadvantaged business enterprises” under federal law, was flawed. In fact, the businesses did not satisfy statutory criteria for such favored status.

Regardless of how one feels about federal regulations or about the practice of awarding contracts based on gender or race, there are federal laws that provide for such processes. And the law defines precisely what qualifies a business as “disadvantaged.”

Yet in the face of such laws, and despite the importance of working positively with the federal agency with primary responsibility for the operations of Atlanta’s international airport, the mayor and the council have given the high hat to the FAA.

The hubris with which the city has approached this entire process was displayed last month when, in the wake of the FAA letter to the city notifying it of the agency’s findings, the City Council voted to proceed with the newly awarded but questionable concessions, without even a temporary delay to investigate the federal government’s findings.

Georgia is engaged in a proactive effort to bring new business to the Peach State. Having the city of Atlanta, also host to the world’s busiest airport, continue to thumb its nose at federal regulators and run roughshod over small businesses is unlikely to aid in those efforts.

Bob Barr is a lawyer in Atlanta and former U.S. attorney.

Bid process open, honest

By Louis Miller

The city of Atlanta reached new levels of transparency and fairness in its handling of the concessions procurement process at Hartsfield-Jackson International Airport and the opening of the new Maynard H. Jackson Jr. International Terminal.

Atlanta Mayor Kasim Reed took the first of several unprecedented actions within weeks of his 2010 inauguration. He asked an outside group of independent business leaders to vet and recommend candidates to lead the airport. The committee narrowed a large pool of candidates to five finalists, leading to my appointment as aviation general manager.

Then, the city worked with Delta Air Lines by sharingairport financial information, which improved efficiency and led to a private $30 million contribution toward the city’s bond financing. That $1.5 billion bond transaction, specifically for the new terminal, won Bond Buyer’s Dealof the Year Award for the South and enabled the opening of the terminal thismonth.

With the airport’s leadership and bond financing in place, the city requested proposals for all food, beverage and retail concessions at once to ensure the most fair and level playing field possible. A phased-in approach could have raised questions about which companies received lease extensions at the airport and for how long.

The city also imposed limitations on how many packages a single proponent could win, which maximized participation, competition and fairness.

In March 2011, the city continued this open approach by hosting a daylong pre-proposal conference for the public, drawing more than 500 attendees. For the first time, the city conducted additional background checks on the evaluators to rule out conflicts of interest and to promote fairness. During the procurement process, proponents and their designees were prohibited from communicating with city-appointed officials and employees about the solicitations.

Recognizing the importance of openness and transparency, Mayor Reed took another unprecedented action in June 2011.  He returned and then refused to accept legal campaign contributions from airport vendors during the open procurement phase. “We found no evidence that prior Atlanta mayors have taken this step,” wrote The Atlanta Journal-Constitution PolitiFact.

City officials, including then-COO Peter Aman, took extra steps to ensure openness by proactively meeting with AJC editors when Chief Procurement Officer Adam Smith canceled the first round of procurements because 36 percent of the proposals would have been disqualified, severely limiting the competitive pool. Then, the city released the names of the evaluators before Reed signed the contracts, earlier than required by the Open Records Act.

Finally, the city released more than 1 million pages of documents to the public. “We found no evidence that other administrations have gone through the expense and effort of releasing this many documents,” according to AJC’s PolitiFact.

The completion of a 10-year, $1.5 billion project is no easy task. We set a goal of opening the international terminal by spring 2012 and achieved that. We created jobs and strengthened the airport’s financial position. The new concessions contracts, the most lucrative in the airport’s history, will generate approximately $23 million in additional revenue.

We executed this process with honesty and integrity. “There was absolutely no evidence presented which would support any allegations of a ‘pay-to-play’ culture in connection with this procurement,” wrote hearing officer George Maynard.

We will learn from this experience and make improvements that ensure Hartsfield-Jackson continues to be the busiest passenger airport in the world and the leading economic engine in the region. It is time to end the meritless attacks and enjoy Atlanta’s new gateway to the world.

Louis Miller is the aviation general manager for Hartsfield-Jackson International Airport.

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May 30th, 2012
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