Hartsfield-Jackson International Airport will rebid some of its controversial concessions contracts after finding that too many companies were disqualified, a snag expected to delay those contracts until the next mayoral administration.
City officials had hoped to move forward on the lucrative contracts before Atlanta Mayor Kasim Reed's term ends, while candidates running to be the next mayor had said the administration shouldn't be rushing the contracts through. The current contracts don't expire until September 2018.
VIDEO: Previous coverage on this issue
The massive revamp of retail at the world's busiest airport would mean more than 80 new shops around the domestic terminal and most concourses. The new locations are split up among 10 contracts that companies are competing for.
But when the deadline came for companies to submit proposals for the contracts, half of the contracts attracted only two interested companies each, and another attracted only one company’s proposal.
Then, when the companies' documents were reviewed, more than half were "deemed non-responsive" and disqualified. It's been an ongoing issue for city of Atlanta contracting, with too many companies being disqualified for missing documents or incomplete forms.
Hartsfield-Jackson general manager Roosevelt Council said of the 29 proposals the city received for the 10 contracts, 16 proposals were deemed non-responsive — the technical term describing when certain requirements are not fulfilled.
That left 13 remaining proposals for the 10 contracts. Some companies submitted proposals for multiple contracts.
“We’re going to award at least six of the ten” contracts, Council said, while rebidding four of them — including one contract with a large batch of store locations. With the end of the year nearing, the award of the contracts will have to happen next year under the next mayor, according to Council.
“It won’t happen with this administration,” Council said. It typically takes months to solicit proposals and allow time for submissions and evaluations. The mayor’s office referred The Atlanta Journal-Constitution to the airport for comment.
“Our goal was to try to get them done. This is one of the reasons I wanted to get it done early, for situations like this,” Council said. “We try to sort of hedge all of our bets. This is one of the challenges, the pitfalls.”
It’s not the first time the city has thrown out proposals and started the process over because of limited competition. In 2011, the city received 99 proposals for airport restaurant contracts, but 41 of them had disqualifying errors, so the city restarted the whole process.
Some concessionaires have raised questions about the city's rush through the contracting process.
City officials have said they aimed for a “very aggressive” schedule to award the contracts in October and execute leases in December.
At an August meeting for companies interested in the contracts, city procurement officer Mano Smith said: "The further we push it out, the less likely it will be awarded in this administration. So just keep that in mind."
Some concessionaires raised concerns at that meeting about not having enough time to complete proposals by the deadline, and at the same time raised questions about a new regime coming into City Hall that could introduce political uncertainty into the airport contracts.
The city issued its request for proposals July 20, with proposals due a little over two months later on Sept. 27, after two deadline extensions.
Some of the biggest packages required detailed proposals for 18 to 21 different shops in various locations at the airport.
Concessionaires say it can be costly and time-consuming to prepare a proposal that can be hundreds of pages long, assembling a team of partners, subcontractors and franchise or licensing agreements, along with technical writers and consultants to detail the concept of the eatery, the design and the location, as well as complying with legal and insurance particulars.
After the August meeting, then-mayoral candidate Ceasar Mitchell called for a moratorium on the approval of city contracts that begin services in 2018, including the airport shop contracts.
Most of the other candidates, including councilwoman Mary Norwood, signaled support for such a move, amid a federal investigation into a cash-for contracts scandal at City Hall.
Norwood will be in a December runoff against fellow councilwoman Keisha Lance Bottoms for the mayoral seat. Bottoms, who has been endorsed by Reed, did not voice support for a moratorium.
MYAJC.COM: REAL JOURNALISM. REAL LOCAL IMPACT.
AJC Business reporter Kelly Yamanouchi keeps you updated on the latest news about Hartsfield-Jackson International Airport, Delta Air Lines and the airline industry in metro Atlanta and beyond. You'll find more on myAJC.com, including these stories:
Never miss a minute of what's happening in local business news. Subscribe to myAJC.com.
