Title
Wi-Fi Service Concession Agreement (Ordinance S-46240)
Description
Request to authorize the City Manager, or his designee, to award and enter into a Wi-Fi service concession agreement for Phoenix Sky Harbor International Airport (PHX) to Concourse Communications Group, LLC (Boingo Wireless, Inc.). The estimated annual revenue will be $340,000.
Report
Summary
The Aviation Department currently contracts with Boingo Wireless, Inc. (Boingo) to provide and support public Wi-Fi service in all terminals, the Rental Car Center, and all PHX Sky Train® (Sky Train) stations at PHX. On average, out of the 123,000 daily passengers, there are 33,000 unique users that connect to the Wi-Fi service. On an annual basis, approximately 12 million passengers access the Wi-Fi service at PHX.
The current contract with Boingo expired on July 31, 2019. On June 5, 2019, Phoenix City Council approved a month-to-month extension of the contract for up to one year to allow time to issue the Revenue Contract Solicitation (RCS 19-038) and award a new contract. This extension expires July 31, 2020 and can be terminated any time once the new Wi-Fi service has been successfully implemented and transitioned.
Under the new Wi-Fi service concession contract, the provider will be required to implement and maintain an uninterrupted Wi-Fi service. The provider will be responsible for all costs associated with the implementation and maintenance of the Wi-Fi network throughout the term of the contract and any exercised extension options. The contract will allow passengers to choose free Wi-Fi or a pay-for-use Wi-Fi service with the service provider. The service will support desktops, laptops, smart phones, tablets, and other end devices with Wi-Fi capability.
Wi-Fi service will cover the following airport locations:
- Terminal 3
- Terminal 4
- Rental Car Center
- All Sky Train stations
During the initial six months of the contract term, the provider will implement and transition to the new system. If the provider completes the implementation and transition prior to the start of the Primary Term on Aug. 1, 2020, the date of implementation would become the new Primary Term start date. At the commencement of the Primary Term, the provider will pay to the City rent in the amount of MAG or percentage of gross sales earned, whichever is greater.
This item has been reviewed and approved by the Information Technology Services Department.
Procurement Information
On July 18, 2019, the Aviation Department issued RCS 19-038 for the design, implementation, operation, and maintenance of an airport-wide Wi-Fi service. On Aug. 30, 2019, one proposal was received from Concourse Communications Group, LLC (Boingo Wireless, Inc.), and the proposal was deemed responsive and responsible.
An evaluation committee was appointed to conduct detailed evaluations. The panel evaluated the proposal based upon the following RCS evaluation criteria:
- Method of approach to providing Wi-Fi services (400 points).
- Proposed Minimum Annual Guarantee (MAG) (250 points).
- Qualifications and experience of respondent (200 points).
- Business plan (150 points).
The consensus score and ranking for the proposal is shown below:
Concourse Communications Group, LLC (Boingo Wireless, Inc.) 880 points
Contract Term
The term of the contract will be three years, with two one-year options to extend, which may be exercised by the City Manager or his designee. The new contract will commence on Jan. 1, 2020, with the new Wi-Fi service to be implemented no later than July 31, 2020. The Primary Term of the new service will start no later than Aug. 1, 2020.
Financial Impact
Revenue for the Aviation Department will be set at MAG of $340,000 or 35 percent of gross sales earned, whichever is greater.
Concurrence/Previous Council Action
City Council approved the City Manager to issue RCS 19-038 on June 5, 2019.
The Transportation, Infrastructure and Innovation Subcommittee recommended approval of this item on Dec. 4, 2019 by a 4-0 vote.
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.