Title
Request to Issue Terminal Services Revenue Contract Solicitation
Description
Request to authorize the City Manager, or his designee, to issue a revenue contract solicitation (RCS) for a Network Entertainment Broadcast System and for a Terminal Delivery Service Concessions at Phoenix Sky Harbor International Airport (PHX).
Report
Summary
PHX has contracted with AC Holdings for the last seven years to provide CNN Airport Network programming in the terminal hold rooms. The contract expired in March 2019 and has been continued on a month-to-month basis to allow time to conduct a competitive solicitation for a new Network Entertainment Broadcast System. With new entrants in this market, the Aviation Department (AVN) intends to improve its entertainment services.
Additionally, in an effort to increase concession sales and bring airport concession amenities to passengers and employees throughout the terminals, AVN is seeking Terminal Delivery Service Concessions, which will allow passengers and customers to order food and retail items through a mobile application to be delivered to their locations.
AVN’s concession program goals include encouraging competition and creating opportunities that mirror our community; reflect our region by including national, regional, and local brands and concepts and current trends; optimizing sales and revenues; increasing opportunity for local and small business participation; and raising the quality and uniqueness of concession offerings at PHX.
The contract opportunities include:
Package 1
- Network Entertainment Broadcast System.
Package 2
- Terminal Delivery Service Concessions.
Procurement Information
AVN will conduct an RCS to select one vendor for the Network Entertainment Broadcast System and one or more vendors for the Terminal Delivery Service Concessions. Responsive and responsible respondents will be evaluated according to the following evaluation criteria:
Network Entertainment Broadcast System
- News, Travel, and Entertainment Programming.
- Management or Operations Plan.
- Proposed Financial Return to City.
- Design and Infrastructure.
- Experience and Qualifications.
- Local Content and Programming.
Terminal Delivery Service Concessions
- Concept and Programming.
- Management, Marketing, and Operations.
- Experience and Qualifications.
- Proposed Business Plan.
The highest ranked respondent(s) for each opportunity will be recommended for the concessions contract awards. AVN intends to issue this solicitation in the Summer of 2019, with contract awards estimated for late 2019. For the Network Entertainment Broadcast System solicitation process, respondents will be encouraged to provide not less than 20 percent of its programming showcasing Arizona as a travel destination. The City’s Transparency Policy will be in effect with the release of the RCS and throughout the process.
Contract Term
The term for the Network Entertainment Broadcast System contract will be five years, with one two-year renewal option that may be exercised at the sole discretion of the Aviation Director.
The term for the Terminal Delivery Service Concessions contract(s) will be three years, with one two-year renewal option that may be exercised at the sole discretion of the Aviation Director.
Financial Impact
Minimum annual guarantee will be set for the contracts based on concession category using PHX historical and market data. Percentage of gross sales will be dependent on the concession category and range from 8 percent to 15 percent. Estimated combined annual revenue from the contracts will be approximately $130,000.
Concurrence/Previous Council Action
This item was recommended for approval at the Aviation and Transportation Subcommittee meeting on April 23, 2019, by a vote of 2-0.
Public Outreach
This process will include all standard and required outreach efforts and conduct targeted outreach efforts to attract interest for each of these unique contracting opportunities.
Location
Phoenix Sky Harbor International Airport, 3400 E. Sky Harbor Blvd.
Council District: 8
Department
Responsible Department
This item is submitted by Assistant City Manager Deanna Jonovich and the Aviation Department.