Title
Common Use Lounge Concession Lease Solicitation Award Recommendation (Ordinance S-45212)
Description
Request to authorize the City Manager, or his designee, to enter into a Common Use Lounge Concession Lease with MAG US Lounge Management, LLC. This concession lease is estimated to generate approximately $3.5 million over the full term, including option years.
Report
Summary
On Dec. 13, 2017, City Council authorized the issuance of a Revenue Contract Solicitation (RCS) for a common use lounge in Terminal 4 North 4 concourse at Phoenix Sky Harbor International Airport. The RCS was issued April 30, 2018, with responses due June 26, 2018.
The City received three responses, each of which were evaluated by an evaluation panel. Respondent interviews were held with each of the three Respondents on Aug. 21, 2018, and the panel's award recommendation was posted to the City's public award website on Aug. 30, 2018.
The panel members evaluated the responses based on the following criteria established in the RCS:
- Business Operations (0-300 points available).
- Qualifications/Experience (0-250 points available).
- Concept Design (0-250 points available).
- Financial (0-200 points available).
The panel recommendation was reached by consensus in consideration of these criteria.
An employee retention policy is in place requiring the successful Respondent to hire current common use lounge employees in a similar job classification and retain those employees for at least 120 days.
Procurement Information
All submittals were responsive. An evaluation panel evaluated the responses based on the published criteria. The consensus score and ranking for each Respondent is shown below:
MAG US Lounge Management, LLC: 882 points
ALD US Holdings, Inc.: 727 points
Plaza Premium Lounge Management Limited: 667 points
Contract Term
The concession lease will have an initial term of five years with two one-year extension options which may be exercised at the sole discretion of the Aviation Director.
Financial Impact
The estimated annual revenue to the City is $500,000; the estimated aggregate revenue over the full term including all extension options is $3.5 million.
Concurrence/Previous Council Action
This item was recommended for approval at the Aviation and Transportation Subcommittee meeting on Nov. 27, 2018, by a vote of 3-0.
Public Outreach
This solicitation process included all standard and required outreach efforts, including advertising in Aviation industry publications.
Location
Phoenix Sky Harbor International Airport, 3400 E. Sky Harbor Blvd.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Aviation Department.