Title
Bus and Transit Furniture Advertising Revenue Contract Award (Ordinance S-48369)
Description
Request to authorize the City Manager, or his designee, to enter into a contract with Lamar Transit, LLC to provide bus advertising and transit furniture advertising services for the Public Transit Department. Further request to authorize the City Treasurer to accept all funds related to this item.
Report
Summary
The bus advertising and transit furniture advertising programs generate revenue for the Public Transit Department (PTD), which in turn is one of the components which funds the City’s transit system. The advertising contractor is responsible for all costs associated with the installation, maintenance, and restoration of advertising surfaces pertaining to buses and transit furniture advertisements.
Procurement Information
PTD issued a Revenue Contract Solicitation (RCS) based upon percentage bids that yield the overall greatest advertising revenues to the City on individual or combined contracts for bus and transit-furniture advertising services. The selection was made using a RCS procurement process in accordance with Phoenix City Code Chapter 43 and Administrative Regulation 3.10.
The evaluation panel, which consisted of qualified staff having experience with the advertising programs, evaluated and scored each proposal based on the following criteria (1,000 points total):
- Method of Approach (450 points);
- Price Proposal (350 points); and
- Qualifications and Experience (200 points).
The evaluation recommendations were reached by consensus in consideration of the published selection criteria, with the panel selecting Lamar Transit, LLC for contract award of both the bus advertising and transit-furniture advertising programs. The following summarizes the results of the evaluations:
Proposer Total Points
Lamar Transit, LLC 801
Clear Channel Outdoor, Inc. 741
Intersection Media 670
Outfront Media Group 663
Contract Term
The initial five-year base contract term will begin July 1, 2022, and the contract includes two one-year options to extend if the contractor has performed satisfactorily and it is in the City’s best interest to exercise the available options.
Financial Impact
This is a revenue generating contract, with all related expenses being borne by the advertising contractor. The RCS and resulting contract provide that the City will be paid the percentage of net sales revenue submitted in the proposal or the Minimum Annual Guarantee (MAG), whichever is greater.
The net sales revenue share percentage for Lamar Transit, LLC is 69.25 percent for the combined advertising program. The MAG is defined as $1.9 million annually for transit furniture advertising and $1.4 million annually for bus advertising. The MAG will not decrease below the level of annual revenue outlined in PTD's current advertising contracts.
Concurrence/Previous Council Action
The Transportation, Infrastructure and Planning Subcommittee recommended approval of this item on Feb. 16, 2022, by a vote of 4-0.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Public Transit Department.