ATTACHMENT 4 OVERALL GOAL CALCULATION FOR CAR RENTALS FY
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1 ATTACHMENT 4 OVERALL GOAL CALCULATION FOR CAR RENTALS FY I. Introduction In fulfillment of the requirements of 49 CFR Part 23, the Tampa International Airport (Airport), owned and operated by the Hillsborough County Aviation Authority (the Authority) has developed an overall goal for fiscal years 2015, 2016 and 2017 for car rentals concessions. The overall goal was developed with the assistance of consultant Ken Weeden & Associates, Inc. (KWA). In accordance with 49 CFR Part 23, the overall goal must be prepared using a two-step process. The Authority must first determine a base figure for the relative availability of ACDBEs in the relevant market area. Second, the recipient must examine relevant evidence to determine what adjustment to the base figure, if any, is needed in order to arrive at the overall goal. The final adjusted figure is the Authority s overall goal, which represents the proportion of participation by ACDBEs in car rentals concessions during the subsequent three fiscal years. Once the adjusted overall goal is determined, the regulations require considering what portion of the goal will be met by race and genderneutral measures. II. Amount of Goal The Authority s overall car rental goal for the period beginning October 1, 2014 and ending September 30, 2017 is the following: 8.0% of the total expenditure of goods and services for car rental operations at the Airport. A. Projected Concessions Opportunities: October 1, 2014 September 30, 2017 Historically, the Authority has expressed ACDBE participation as a percentage of the gross receipts of car rental operations at the Airport. However, because the goal is likely to be met through the purchases by car rental companies of goods or services from ACDBEs and because there are no certified ACDBE car rental companies in the Airport s market area, the Federal Aviation Administration (FAA) is requiring the Authority to structure the new overall goal entirely in terms of purchases of goods and services. The FAA also suggested the Authority exclude the purchase of vehicles since there are no certified ACDBE vehicle dealerships in the Airport s market area. Therefore, the Authority requested information from each car rental company regarding the total expenditure on goods and services for the last three fiscal years, excluding the purchase of vehicles. Information for fiscal years 2012, 2013 and 2014 was received from Avis Budget Group, Inc. and for fiscal years Overall Goal Calculation for Car Rentals Hillsborough County Aviation Authority
2 and 2013 from Enterprise Holdings. The Authority used the information provided to extrapolate an estimated total expenditure for all the car rental companies based on the market share. The Hertz Corporation and Dollar Thrifty Automotive Group were unable to provide information at this time. The Authority used an estimated growth rate of 2.2% to project estimated expenditures for the goal period which includes fiscal years 2015, 2016 and Based on projections by the Authority, the total expenditure of goods and services for car rental operations anticipated during the goal period is $209,799,470. The projected dollar value of goods/services expenditure is an estimate based on limited information. The Authority will report to the FAA the purchase of ACDBE goods and services as a percentage of the total expenditure of goods and services of car rental operations at the Airport. The projected dollar value of expenditure was calculated by taking FY 13 actual dollars expended on goods and services, without the purchase of vehicles considered, extrapolating to 100% of the market share and the expenditure for each year was increased by 2.2%, which is the projected growth rate for the three year period. B. Determination of Market Area Table 1: Projected Expenditure of Goods and Services for Car Rental Concessions FY Car Rental Fiscal Year Concessions FY 2015 $68,416,946 FY 2016 $69,922,119 FY 2017 $71,460,405 Total $209,799,470 Source: Authority, compiled by KWA The market area is defined by the geographical area in which the substantial majority of firms which seek to do concessions business with the Authority are located and the geographical area in which the firms which receive the substantial majority of concessions-related receipts are located. In the case of car rental concessions, the normal market area would be defined as the location of firms which do business and seek to do business with the car rental concessionaires. Based on information provided by the car rental concessionaires, the market area for car rental concessions at the Airport was determined to be Hillsborough County, Florida. Table 2 below describes the location of vendors and service providers to car rental concessionaires at the Airport as reported in the 2 Overall Goal Calculation for Car Rentals Hillsborough County Aviation Authority
3 Authority s FY 2013 Report of Certified ACDBEs submitted with the Uniform Report of ACDBE Participation. Although less than half of vendors come from Hillsborough County, they account for 95.5% of the total dollars. Table 2: Location of Vendors/Service Providers to Car Rental Concessionaires at Tampa International Airport (FY 2013) % of County Vendors Vendors Dollars Percent Hillsborough % $5,387, % Other % $254, % Total % $5,641, % III. Methodology used to Calculate Overall Goal A. Step 1: 23.51(c) The base figure for the goal is the relative availability of car rental ACDBEs. The Step 1 base figure was determined by dividing the number of potential ACDBE firms available by the total number of firms available to determine the relative availability of ACDBEs as indicated in Table 3 below. Table 3: Determination of Relative Availability of ACDBEs (Suppliers of Goods and Services) Concession Type Potential % of ACDBE NAICS All ACDBE Firms Code Firms Firms Available Insurance Agencies and Brokerages Temporary Help Security Services Janitorial Services % Automotive Body, Paint, and Interior Repair and Maintenance Car Washes Sources: 1. City of Tampa Vendor Directory 2. Florida UCP DBE Directory 3. Hillsborough County Minority/Small Business Listings 4. Florida Office of Supplier Diversity Vendor Directory 5. U. S. Census County Business Patterns The Step 1 base goal for car rental ACDBEs is 2.9%. 3 Overall Goal Calculation for Car Rentals Hillsborough County Aviation Authority
4 B. Step 2: 23.51(d) After calculating a base figure of the relative availability of ACDBEs, the Authority examined evidence to determine whether or not the base figure needs to be adjusted in order to arrive at the overall goal. The data evaluated to adjust the base figure was: 1. Past participation The Authority evaluated the current capacity of ACDBEs to perform work in the car-rental concessions program by measuring the volume of work ACDBEs have performed in the past. Again, the Authority used the limited information provided by the car rental companies to estimate the percentage of past ACDBE achievement of the total estimated purchases of goods and services. Table 4: Tampa International Airport ACDBE Achievement FY 2012 FY 2014 (Based on Goods and Services) Total Goods Report Period Total ACDBE Dollars and Services Dollars Estimated ACDBE % FY ,009,814 $37,267, % FY ,641,567 41,843, % FY ,742,987 14,297, % MEDIAN 13.48% Source: Car Rental Expenditure Reports (FY ) FY 14 reflects only 2 rental car companies reporting at the time the goal methodology was prepared. The median ACDBE achievement for the reporting periods as shown above is 13.48%, compared to the Step 1 ACDBE base figure of 2.9%. This may indicate that the Step 1 base figure underestimates ACDBE capacity at the Airport. C. Adjustment of the Step 1 Base Figure The reason the Authority chose to adjust the base figure was because past participation by current ACDBEs indicates that the Step 1 base figure underestimates ACDBE capacity at the Authority. In order to reflect as accurately as possible the ACDBE participation the Authority would expect in the absence of discrimination, the Authority averaged the estimated median ACDBE achievement with the Step 1 base figure which equals 8.19%. Because the median is based on limited information, the Authority rounded down to 8.0%. Therefore, the overall goal for car rental concessions is 8.0%. 4 Overall Goal Calculation for Car Rentals Hillsborough County Aviation Authority
5 IV. Consultation with Stakeholders (23.43) Before establishing the ACDBE car rental concessions goal, the Authority consulted with current airport concessionaires and small, minority and women-owned business development organizations to obtain information concerning the availability of disadvantaged and non-disadvantaged businesses, the effects of discrimination on opportunities for ACDBEs and the Authority s efforts to establish a level playing field for the participation of ACDBEs. As part of the consultation process, the Authority held consultation meetings on October 16, 2013 and October 22, 2013 Attendees were given an overview of the Authority s ACDBE program and the goal. After the presentation, attendees were given an opportunity to comment on the draft goal. After FAA required the Authority to revise the proposed goal based on goods and services, the Authority met with current car rental ACDBEs on December 18, 2014 for further comment. The comments can be found in Appendix A to Attachment 3, Overall Goal Calculation for Concessions Other Than Car Rentals FY V. Breakout of Estimated Race-Neutral and Race-Conscious Participation (Section 23.51) The Authority will meet the maximum feasible portion of its overall goal by using raceneutral means of facilitating ACDBE participation. The Authority uses the race-neutral measures listed below to increase ACDBE participation. The Authority understands that it will be expected to actually take these steps, and this is not merely a paper exercise. 1. Locating and identifying ACDBEs and other small businesses who may be interested in participating as concessionaires under 49 CFR Part 23; 2. 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; 5. Ensuring that competitors for concession opportunities are informed during presolicitation meetings about how the sponsor s ACDBE program will affect the procurement process; and 6. Providing information concerning the availability of ACDBE firms to competitors to assist them in obtaining ACDBE participation. The Authority proposes a race-conscious goal of 8.0% and a race-neutral goal of 0%. The reason for this projected split is that the median amount by which the Authority underachieved its goals over the preceding three year period as shown in Table 5 is 1.9%. Therefore, the Authority expects to meet its entire goal of 8.0% using race-conscious means. 5 Overall Goal Calculation for Car Rentals Hillsborough County Aviation Authority
6 Table 5: Tampa International Airport ACDBE Achievement for FY 2011 FY 2013 (Based on Gross Receipts) Report Period Approved ACDBE Goal Total ACDBE % Achieved Achieved Over/Under FY % 2.1% -2.0% FY % 2.2% -1.9% FY % 2.3% -1.8% MEDIAN 4.09% 2.2% -1.9% Source: Uniform Report of ACDBE Participation, Tampa International Airport (FY ) If the Authority projects that race-neutral measures, standing alone, are not sufficient to meet an overall goal, it will use the following race-conscious measures to meet the overall goal: 1. Establish concession-specific goals for particular concession opportunities; 2. Negotiate with potential concessionaires to include ACDBE participation through direct ownership arrangements or measures, in the operation of the concession; and 3. Utilize, with prior FAA approval, other methods that take a competitor s ability to provide ACDBE participation into account in awarding a concession. In order to ensure that the ACDBE program will be narrowly tailored to overcome the effects of discrimination, if the Authority uses concession-specific goals, it will adjust the estimated breakout of race-neutral and race-conscious participation as needed to reflect actual ACDBE participation (See 26.51(f)) and the Authority 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: 1. ACDBE participation through a prime contract that an ACDBE obtains through customary competitive procurement procedures; 2. ACDBE participation on a prime contract exceeding a concession specific goal; and 3. ACDBE participation through a subcontract from a prime contractor that did not consider a firm s ACDBE status in making the award. The Authority will maintain data separately on ACDBE achievements in those contracts with and without concession-specific goals, respectively. 6 Overall Goal Calculation for Car Rentals Hillsborough County Aviation Authority
7 Resource Documents: 1. City of Tampa Vendor Directory 2. Hillsborough County Minority/Small Business Listings 3. Florida Department of Transportation, Equal Opportunity Office DBE Directory 4. Florida Office of Supplier Diversity Vendor Directory 5. U. S. Census County Business Patterns 6. Uniform Report of ACDBE Participation 7 Overall Goal Calculation for Car Rentals Hillsborough County Aviation Authority
8 Appendix A CONSULTATION FY ACDBE Rental Car (RAC) Goal Consultation Comments / Questions and Answers November 7, 2014 December 18, 2014 The Authority hosted an ACDBE stakeholders meeting regarding the proposed overall 3 year ACDBE RAC goal. Goals in current contracts will still govern until the end of the contract. ACDBE Concessionaire I receive many outreach letters from other states asking for the types of services I provide; however, I never receive any follow-up correspondence. How is the Authority going to oversee how companies utilize ACDBEs as opposed to just receiving letters? Can the Authority provide a slide at meetings indicating what ACDBEs rental car companies are using for what service? The Authority will require all primes to sign an ACDBE Assurance and Participation form assuring the Authority that they will contract with ACDBE firms in an amount equal to or greater than the ACDBE RAC Goal. Yes, the Authority can provide a slide indicating the services that RACs are using to meet goals. ACDBE Concessionaire Is FAA changing their feeling on goal methodology from gross receipts to goods and services everywhere or just in the Southern Region? It appears that they will be applying the regulations pertinent to ACDBE goal setting in every region. 8 Overall Goal Calculation for Car Rentals Hillsborough County Aviation Authority
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