Attachment 2. Methodology used to Calculate Overall Goal for Non-Rental Car Concessions

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1 Attachment 2 SECTION A. Overall Goal for Concessions other than Car Rental Calculations, Consultation, Breakout of Estimated Race-Neutral & Race Conscious Participation Amount of Goal The overall goal for concessions other than car rental during the period beginning October 1, 2014 and ending September 30, 2017 is 18.67%. There is a possible opportunity at FAI in the following area: Advertising (2015). The following are not included in the total gross receipts for concessions: (a) the gross receipts of car rental operations, (b) the dollar amount of a management contract or subcontract with a non-acdbe, (c) the gross receipts of business activities to which a management contract or subcontract with a non-acdbe pertains, and (d) any portion of a firm s estimated gross receipts that will not be generated from a concession. If a new concession opportunity arises prior to the end of this goal period and the estimated average of annual gross revenues are anticipated to be $200,000 or greater, ADOT&PF will submit an appropriate adjustment to the overall goal. This will be submitted to FAA for approval at least 6 months before executing the new concession agreement. (23.45(i)). ADOT&PF has determined that the market area is the State of Alaska. This is the geographical area in which the substantial majority of firms which seek to do concessions business with the airport are located and the geographical area in which the firms receive a substantial majority of concessions related revenues are located. Methodology used to Calculate Overall Goal for Non-Rental Car Concessions Step 1: 23.51(c) The ADOT&PF determined the base figure for the relative availability of ACDBEs other than car rentals. The DOT&PF completed the goal-setting process for each separate goal using an active participants list for each airport, per 23.51(c)(2). Airports with concessionaire opportunities in Alaska stated that it can be difficult to acquire bids for RFPs. Many Alaskan airports keep a list of individual firms who have shown interested in openings and bidding opportunities to increase bidding activity. The active participant lists are managed by airport personnel. ADOT & PF is currently contracting with MGT of America on an Alaska ACDBE Disparity Study. Data reviews, methods, and findings are still in process. Any relevant findings will be used to make appropriate adjustments to the overall goal, which will be submitted to FAA for approval. 1

2 The base figures were calculated as follows: Ready, willing, and able non-car rental ACDBEs in the market area Base figure = All ready, willing and able non-car rental concession firms in the market area The data sources used to derive the numerator were: The Alaska Unified Certification Program (AUCP) ACDBE Directory found at (March 26,2014). Active Participant Lists This is the list of firms that have participated or attempted to participate at the airports, respectively, in previous years. This list is managed and updated by each airport s leasing personnel. Firms that have run concessions or sought concession contracts or leases, knowledge about the universe of firms in certain areas of retail and food and beverage service that tend to be interested in participating in airport concessions, and attendance lists from informational and outreach meetings about upcoming concessions are included. The Active Participant list was cross-referenced with the AUCP Directory to identify the certification status of the active and interested ACDBE firms for the numerator. There is a total of 1 ACDBE firm who has shown interest in, or has had a contract with FAI. The data source used to derive the denominator was the FAI Active Participant List. There are 26 firms actively seeking concession contracts or currently hold a concession contract. When dividing the numerator by the denominator, the base figure for the overall goal for non-car rental concessions of: 3.85 % Step 2: 23.51(d) After calculating a base figure of the relative availability of ACDBEs, we examined evidence to determine what adjustment was needed to the base figure in order to arrive at the overall goal. In order to reflect as accurately as possible the ACDBE participation we would expect in the absence of discrimination we have adjusted our base figures for FAI. The Step One goal of 3.85% for non-car rental concessions is increased to 18.67%. The data used to determine the adjustment to the base figure was past participation; the firm availability listed in Step 1 does not reflect the gross receipt value historically achieved by active and interested ACDBE firms. We evaluated the current capacity of ACDBEs to perform work in our concessions program by measuring the volume of work ACDBEs have performed in the past. 2

3 Fiscal Year ACDBE Participation ($) ACDBE Participation (%) 2009 $1,018, % 2010 $1,274, % 2011 $1,323, % 2012 $1,440, % 2013 $1,429, % As you can see in the table above, the ACDBE participation remains at a higher level. The past participation is the gross receipts that the sole ACDBE firm listed in the Active Participants List has generated in the last 5 years. The average of the Step One goal and median past participation of 33.49% yields a number of 18.67%: (3.85% %)/2 = (37.34%)/2 = 18.67% It is unknown whether active participants will be applying for ACDBE certification within for additional ACDBE opportunities at FAI. The table below shows the projected gross receipts: CONCESSIONAIRE BUSINESS TYPE GROSS RECEIPT PROJECTION* FY2014 FY2015 FY2016 NANA Management Food & Beverage $525, $535, $546, Twigs, Inc.** News & Gifts $1,458, $1,487, $1,517, Aurora Republic Parking Parking $1,637, $1,670, $1,704, Interspace Advertising Advertising $173, $177, $180, Smarte Carte Baggage cart $27, $28, $28, Alaska ATM Service ATM $43, $43, $44, Total Projected Gross Receipts $3,866, $3,943, $4,022, Total Projected ACDBE Participation Total Projected ACDBE Participation (%) ** Certified ACDBE firm $1,458, $1,487, $1,517, % 3

4 Breakout of Estimated Race-Neutral & Race Conscious Participation Section FAI will meet the maximum feasible portion of its overall goal by using race-neutral means of facilitating ACDBE participation. ADOT&PF uses the following race-neutral measures to increase ACDBE participation: Locating and identifying ACDBEs and other small businesses who may be interested in participating as concessionaires under 49 CFR Part 23; 1. Notifying ACDBEs of concession opportunities and encouraging them to compete, when appropriate; 2. When practical, structuring concession activities so as to encourage and facilitate the participation of ACDBEs; 3. Providing technical assistance to ACDBEs in overcoming limitations, such as inability to obtain bonding or financing; 4. Ensuring that competitors for concession opportunities are informed during presolicitation meetings about how the sponsor s ACDBE program will affect the procurement process; 5. Providing information concerning the availability of ACDBE firms to competitors to assist them in obtaining ACDBE participation; and 6. Establishing a business development program (see 49 CFR Part 26.35); technical assistance program or taking other steps to foster ACDBE participation in concessions. We estimate that, in meeting the FAI overall goal of 18.67%, we will obtain 18.67% from race-neutral participation and 0.0% through race-conscious measures. The following is a summary of the basis of our estimated breakout of race-neutral and race-conscious ACDBE participation: 1. The extent that FAI exceeded the ACDBE goals in the past; 2. ACDBE participation on concession leases that did not have ACDBE requirements; 3. Extent of your race-neutral business assistance efforts; 4. Information you obtained through consultation with stakeholders; If we project that race-neutral measures, standing alone, are not sufficient to meet an overall goal, we will establish concession-specific goals for particular concession opportunities to meet the overall goal. In order to ensure that our ACDBE program will be narrowly tailored to overcome the effects of discrimination, if we use concession specific goals we will adjust the estimated breakout of race-neutral and race-conscious participation as needed to reflect actual ACDBE participation (see 26.51(f)) and we will track and report race-neutral and race conscious participation separately. For reporting purposes, race-neutral ACDBE participation includes, but is not necessarily limited to, the following: 4

5 ACDBE participation through a prime contract that an ACDBE obtains through customary competitive procurement procedures ACDBE participation through a subcontract on a prime contract that does not carry ACDBE goal ACDBE participation on a prime contract exceeding a concession specific goal; and ACDBE participation through a subcontract from a prime contractor that did not consider a firm s ACDBE status in making the award. We will maintain data separately on ACDBE achievements in those contracts with and without concession specific goals, respectively. 5

6 Attachment 2 SECTION B. Overall Goals for Car Rentals Calculation, Consultation, Breakout of Estimated Race Neutral & Race-Conscious Participation Amount of Goal Fairbanks International Airport (FAI) overall goal for car rental concessions during the period beginning October 1, 2014 and ending September 30, 2017 is the following: 0.0% of the total gross receipts for car rental operations. A new rental car concession for 2015 is anticipated during this goal period. All non-primary airports have a 0.0% ACDBE Goal for rental cars. If a new car rental concession opportunity arises prior to the end of this goal period and the estimated average of annual gross revenues are anticipated to be $200,000 or greater, AK DOT & PF will submit an appropriate adjustment to the overall goal. This will be submitted to FAA for approval at least 6 months before executing the new concession agreement. (23.45(i)). The market area of car rental concessions at FAI is considered to be the national level for car rental concessions. No car rental companies have been found to be current or potential ACDBE firms. Step 1: 23.51(c) We determined the base figure for the relative availability of car rental ACDBEs. The base figure was calculated as follows: Ready, willing, and able car rental ACDBEs in the market area Base figure = All ready, willing and able car rental firms in the market area The data source or demonstrable evidence used to derive the numerator was the Active Participants List for each airport and the Alaska Unified Certification Program (AUCP) ACDBE Directory found at (March 26, 2014). The data source or demonstrable evidence used to derive the denominator was the Active Participant List. 6

7 Step 2: 23.51(d) After calculating a base figure of the relative availability of ACDBEs, we examined evidence to determine what adjustment was needed to the base figure in order to arrive at the overall goal. The data used to determine overall goal was past participation for each airport. We evaluated the current capacity of ACDBEs to perform work in our concessions program by measuring the volume of work ACDBEs have performed in the past. Historically, the car rental concessions at FAI have not been able to obtain DBE participation through subleasing methods. Car rental companies are allowed to obtain ACDBE participation through purchases of goods and services. Current Car Rental Companies: Company Alamo/National Avis Budget Dollar/Thrifty Hertz Payless Corporate Headquarters Ft Lauderdale, FL Parsippany, NJ Parsippany, NJ Tulsa, OK Park Ridge, NJ St. Petersburg, FL 7

8 Breakout of Estimated Race-Neutral & Race Conscious Participation Section FAI will meet the maximum feasible portion of its overall goal by using race-neutral means of facilitating ACDBE participation. ADOT&PF uses the following race-neutral means to increase ACDBE participation: 1. Locating and identifying ACDBEs and other small businesses who may be interested in participating as concessionaires under 49 CFR Part Notifying ACDBEs of concession opportunities and encouraging them to compete, when appropriate; 3. When practical, structuring concession activities so as to encourage and facilitate the participation of ACDBEs; 4. Providing technical assistance to ACDBEs in overcoming limitations, such as inability to obtain bonding or financing; 5. Ensuring that competitors for concession opportunities are informed during presolicitation meetings about how the sponsor s ACDBE program will affect the procurement process; 6. Providing information concerning the availability of ACDBE firms to competitors to assist them in obtaining ACDBE participation; and 7. Establishing a business development program (see 49 CFR Part 26.35); technical assistance program or taking other steps to foster ACDBE participation in concessions. We estimate that, in meeting our overall goal of 0.0%, we will obtain all future ACDBE car rental participation through race-neutral measures. In order to ensure that our ACDBE program will be narrowly tailored to overcome the effects of discrimination, if we use concession specific goals we will adjust the estimated breakout of race-neutral and race-conscious participation as needed to reflect actual ACDBE participation (see 26.51(f)) and we will track and report race-neutral and race conscious participation separately. For reporting purposes, race-neutral ACDBE participation includes, but is not necessarily limited to, the following: ACDBE participation through a prime contract that an ACDBE obtains through customary competitive procurement procedures ACDBE participation through a subcontract on a prime contract that does not carry ACDBE goal ACDBE participation on a prime contract exceeding a concession specific goal ACDBE participation through a subcontract from a prime contractor that did not consider a firm s ACDBE status in making the award. We will maintain data separately on ACDBE achievements in those contracts with and without concession specific goals, respectively. 8