Request for Bids (Rfb)

REQUEST FOR BIDS (RFB) FOR CAR RENTAL CONCESSION OPPORTUNITY

RFB ADDENDUM No. 1 ISSUE DATE: 11/24/17 REVISED DEADLINE: 1/5/18 at 2:00 PM Eastern Time

This addendum is being issued to modify some sections of the RFB as well as to answer questions submitted by the question deadline.

I. MODIFICATIONS:

1. NOTICE: The Bid Deadline has been extended until 1/5/18 at 2:00 PM Eastern Time. See revise RFB issued with this addendum. 2. REVISIONS: Several sections of RFB issued on November 9, 2017 have been revised. A red-lined version of the revised RFB is attached to this addendum. Bold red text has been added, and strikethrough red text can be considered removed. The Form of Agreement is also issued with this Addendum.

II. ANSWERS TO SUBMITTED QUESTIONS: 1. Does the Airport have a formal written agreement for off-airport operators? If so, what are the terms of that agreement – i.e. what is the arrangement for pick-up and drop-off of customers; what are the fees that operators pay to the airport? Answer - The Airport Authority does not currently have a formal written agreement for off-airport operators. Off-airport operators will execute a written agreement with similar terms and conditions to that of successful bidders of on-airport operators resulting from this RFB. However, off-airport operators will not be provided Ready/Return Car parking spaces but will be provided space on the commercial curb for bus/shuttle pick-up/drop- off of their customers. Car Rental Office/customer counters will only be provided to an off-airport operator if some of the space currently occupied by the four (4) Car Rental Office/customer counters is vacant and not rented.

2. Please confirm that no additional brand can be added to any bidder’s concession agreement during the term of the agreement and that operator may only operate the brand or brands that it specifies in its bid. Answer – The Airport Authority reserves the right to add additional and/or different brands during the term of the agreement that results from this RFB. See Form of Agreement Section 13.04.

Addendum #1 Page 1 of 10 3. Please confirm that all of the terms and conditions specified in the RFB and any/all issued addenda will be incorporated and made a part of the Concession Agreement. Please add language to the RFB and to the Concession Agreement which states: “The Request for Bids, including any/all issued addenda and questions and answers, are hereby incorporated into and made a part of the Concession Agreement.” Answer – The RFB and its addenda will be made part of the Concession and Lease Agreement by reference. See Form of Agreement Section 1.02.

4. Regarding the requirement to mark/label our bid proposal envelope, in order to uphold the integrity of the RFP process, will Authority please eliminate the requirement to include company’s name on the label? Answer – The labeling requirement of the bids has been modified. See Revised RFB issued with this Addendum.

5. We request that a second round of questions be made available for potential Bidders to submit questions on the proposed Facility Diagrams and Form of Agreement once they are received; and 3 days for clarification questions after the last addendum. In addition, should this request be granted, please allow ample time between the time Authority issues questions and answers/final Addenda and the time bids are due. It should be no less than 3 weeks. Answer – An additional question deadline has been added and the Bid Deadline has been extended. See Revised RFB issued with this Addendum.

6. Can you please confirm the bid amounts will be opened and read aloud at the submission due date & time? Answer – The bids will be open and read aloud following bid deadline.

7. Section 2.9.c (pg. 6) – Please confirm that our company is not currently in arrears or in default with the Airport Authority on any contract, debt, or other obligation. Answer – None of the companies operating rental cars on-airport are currently in arrears or in default with the Airport Authority on any contract, debt, or other obligation. As of November 24, 2017, all rental car agencies are current. It will be the responsibility of the bidders to ensure that the proper legal name is used throughout the bidding process and on the final Operator agreement.

8. Section 2.18 (page 7) – Please modify so that ACDBE participation is based on the actual gross sales generated from operation of the concession rather than those “projected to be generated…”. Answer – See Revised RFB issued with this Addendum. 18.a

9. Section 2.19 (pg. 8) – Please confirm that providing a certificate of insurance showing the coverage required per the Agreement will satisfy this requirement. Answer – Providing a certificate of insurance will satisfy the Airport Authority’s request for proof of insurance, however the Airport Authority reserves the right to request additional information including but not limited to actual insurance policies if required after review of the bidder’s certificate of insurance.

Addendum #1 Page 2 of 10 Addendum #1 Page 3 of 10 10. Section 3.2 (pg. 9) - We request that the renewal option be exercised mutually by the Authority and the Concessionaire. We should not be forced to continue for another 5 years if we desire to terminate our operation at the end of the 5 year term. Please change this to read “…February 1, 2023, provided however, that the Authority and Concessionaire, are in mutual agreement on exercising the renewal”. Answer – See Revised RFB issued with this Addendum.

11. Section 3.3. We appreciate that you agree to a monthly true-up of gross revenues payments. We propose language such as the following for the Agreement:

The Minimum Annual Guarantee payments or percentage of gross revenues payments shall be made as follows: On or before the 15th day of the second and each successive month of the term of this Agreement and the first month after the expiration or termination of this Agreement, the Concessionaire shall pay to the Authority an amount which, when added to any previous payments for prior months of the current operations year of the Agreement, shall be equal to the greater of either one-twelfth (1/12th) of the current Minimum Annual Guarantee times the number of months elapsed in the then-current operations year, or ten percent (10%) of the accumulative gross revenues through the then-current operations year to the end of the preceding month. The Concessionaire agrees it will submit with such payment a statement showing the Concessionaire’s gross revenue for the preceding month; said statement to be in a form approved or required by the Airport Authority and signed and certified to be complete and accurate by an employee of the Concessionaire authorized to make such a certification.

Answer - For administrative ease, 10% of monthly gross revenues will be accepted monthly, with an annual reconciliation to the MAG. See RFB sect 3.3

12. Section 3.5.a (pg. 9) – The minimum MAG has increased to $100,000 from $90,000 in the previous bid. Based on the fact that deplanements have not increased since the last bid, we request that the minimum remain the same – at $90,000. Answer – See Revised RFB issued with this Addendum. Sect 3.5a

13. Section 3.5.b (pg. 9) - We object to the MAG for contract years 2 through 5 being set at 10% of the previous contract year’s Gross Revenues. That means the MAG is 100% of what we paid to the Authority in the prior year; and gives us no lee-way for a downturn in deplanements. We suggest it be set at 85% of the 10% payments made in the prior year. Answer – See Revised RFB issued with this Addendum sect 3.5b. To be consistent, MAGs will be computed from Gross Sales. We have adjusted it to 9% of gross sales.

14. Section 3.5.d (pg 10). Again, we object to the MAG being set at 10% of the prior year’s Gross Revenues. We suggest it be set at 85% of the 10% payments made in the prior year. Answer – See Revised RFB issued with this Addendum.

Addendum #1 Page 4 of 10 15. Section 3.5. e (pg 10). We object to the requirement that the MAG cannot be less than the MAG for year 1. There must be ability for the MAG to go down. Answer – See Revised RFB issued with this Addendum. MAG can go down via the abatement.

16. Section 3.6 (page 10). What will the rental rate be for the Counter and for the Service Areas? Answer – See Form of Agreement Section 5.03 Will add an exhibit showing annual Rates and Fees approved by the Board.

17. Section 3.8 (pg. 10) – We request that this section be removed from the RFB. No additional Concessionaire should be added during the term of the agreement, other than those companies that are successful in this RFB process. Any RAC interested in operating at the Airport should not be able to NOT respond now, wait until it sees which companies bid and what MAGs are bid, and then enter into a contract at the minimum. This undermines the bidding process. Answer – See answer to Question #18 In the event that our request in #11 is denied, we request that the following language be added to the Agreement: “In the event that any contract granted by the Authority to any other rental car company shall contain any terms and conditions more favorable to such company than the terms and conditions herein described (other than the number of allocated parking spaces and the location of the concession area, etc.), then this Agreement shall be amended to include such more favorable terms and any offsetting burdens that may be imposed on any such other company. The intent of this provision is to ensure that the Authority shall give due diligence to ensure Concessionaire will be able to compete on terms as equal as possible with all other rental car companies and to ensure that no other company shall enjoy any rights or privileges more favorable to such company than those enjoyed by the Concessionaire herein.”

Answer – See Revised RFB issued with this Addendum.

18. Section 4.2 (pg. 11) – We request to grandfather the counters, the ready/return location, and service areas for incumbent bidders. Answer – Currently rented facilities will not be grandfathered.

19. Section 4.3.b (pg. 11) – We request that a Bidder who is submitting a bid for a single concession, but would like to operate two brands from that single concession, be required to submit only one bid package rather than two separate packages for each brand. Answer – See Revised RFB issued with this Addendum.

20. Section 4.3.b (pg. 11) – Can you please confirm the definition of “collusion” is as follows: Addendum #1 Page 5 of 10 “Collusion would be defined as illegal cooperation or conspiracy to cheat or deceive and is not the coordination that takes place between brands owned by the same company.”

Answer – The above definition is confirmed.

21. Section 4.3.d (pg 12) – We object to Concessionaires being required to pay for any vacant Car Rental Service Areas. Answer – See Revised RFB issued with this Addendum.

22. Bid Form (pg 14) – Please revise so that a multi-branded bid is allowed, with one bid form, one MAG, but more than 1 brand. Answer – See Revised RFB issued with this Addendum.

23. Verification of Minimum Qualifications Form (pgs. 15-17) - We request that you delete this requirement for incumbent operators. Incumbents have a proven record of operational experience and financial ability, and you are well aware of the incumbents’ ability to operate a successful concession at the Airport. Answer – All Bidders are required to complete Verification of Minimum Qualifications Form or provide requested information with their Bid. Also see answer to question #25 below.

24. If you do not delete this requirement, please confirm that we may attach an additional page(s) for the required description, rather than fill in the lines. Answer – The revised RFB has be provided in Word format to allow bidder to insert information Verification of Minimum Qualifications Form. Provided information may exceed space provided on form.

25. Car Rental Concession Fee Form (pg 18) – please modify to allow for more than 1 brand on the Fee Form. Answer – See Revised RFB issued with this Addendum.

26. Bidder Information Form (pg 19) – please modify to allow more than 1 brand for a bidder. Answer – See Revised RFB issued with this Addendum.

27. We look forward to receiving Attachment A and B.

Addendum #1 Page 6 of 10 28. We request that the Agreement contain the following abatement language: "Concessionaire's obligation to make the monthly payment of the Minimum Annual Guarantee shall abate and Concessionaire shall pay the difference between the % ENPAX decline in excess of 25%. only 10% of its revenue for each 30 day period in which: a) the number of deplaning passengers on all scheduled airline flights at the airport is less than 90% of the number of such deplaning passengers for the period of the previous year; b) the number of deplaning passengers on all scheduled airline flights at the airport is less than 90% of the number of such deplaning passengers for the same period in the first calendar year of this Agreement, or c) Concessionaire's operations or gross revenues are materially reduced due to a shortage, disruption, limitation, or curtailment in the supply or use of automobiles, or the supply of gasoline or other goods, labor and materials necessary for the operation thereof."

Answer – See Form of Agreement Section 5.02

29. We request the Agreement have the following exclusion to Gross Revenues: “The recovery from customers of any traffic tickets, parking tickets, tolls, towing, impound fees, red light tickets and other governmental fines which must be paid by Concessionaire, including administration fees, if any, which Concessionaire may charge the customer”. Answer – See Definition of Gross Revenues in Form of Agreement Section 1.01

30. We have not been provided a draft copy of the Agreement and, as such, we object to the November 17, 2017 question deadline. Please provide all interested parties at least a week from the time the draft Agreement is issued to provide questions. Answer – An additional question deadline has been added. See Revised RFB issued with this Addendum.

31. When will the addendum be issued with the draft Concession Agreement? Answer – November 24, 2017

32. The bid deadline is acceptable ONLY if all questions are answered no later than November 30. We need approximately three weeks from the issuance of the final Addendum to present the bid specs internally and obtain approvals. Answer – The Bid Deadline has been extended. See Revised RFB issued with this Addendum.

33. Section 2, 6b requires respondents to put the Solicitation Number on the outside of the envelope. Please provide. Answer – No solicitation number is needed. See Revised RFB issued with this Addendum.

34. What specific DBE materials, if any, must be submitted with the bid? Answer – A narrative and any documentation deemed necessary by the Bidder to satisfy the requirement provided in the revised RFB and Form of Agreement.

Addendum #1 Page 7 of 10 35. Section 3, 5a. The minimum MAG is 90% of previous year’s Gross Revenues. An airport with limited commercial air service has inherent risks for its concessionaires because even losing a single flight can significantly impact one’s ability to meet their MAG. As such please set the minimum MAG at 75% of the previous year’s Gross Revenues. Also, please provide the minimum MAG for each incumbent brand. Answer – The minimum MAG has been revised to accommodate dual branding under a single MAG. See Revised RFB issued with this Addendum. An incumbent brand may contact Dale Feldpausch, CFO to obtain the gross revenues on file at the Airport Authority for the time period from October 1, 2016 to September 30, 2017.

36. What is the minimum MAG for a new entrant? Answer – The minimum MAG for a new entrant or new brand is $90,000. See Revised RFB issued with this Addendum.

37. Section 3, 7. All incumbent operators have significant investments in their service facility sites and, since fueling occurs at each site, the environmental impact of switching sites is burdensome. Please grandfather service facility sites for all incumbent operators. Answer – Facilities and sites will not be grandfathered but additional information has been added to the RFB regarding repair/improvement funding and environmental liability. See Revised RFB and Form of Agreement issued with this Addendum.

38. Section 4, 3b. Requiring bidders to submit a bid for each brand when submitting a dual- branded bid is administratively burdensome and of no benefit to the airport. Please allow bidders to submit a single bid for each concession (single-branded or dual-branded) that they intend to operate. Answer – Submission of one MAG for two brands will be allowed. See Revised RFB issued with this Addendum. Call Authority CFO for confirmation of prior years’ Gross Revenues if needed.

39. Section 4, 3c. We object to having to cover the cost of a vacant counter if the Airport receives less than four bidders. Answer – The language regarding Rental Office and Customer Counters Areas has been revised. See Revised RFB issued with this Addendum.

40. Section 4, 3c. If the Airport is going to require the concessionaires to cover the cost of any vacant counters, the Airport should only bid out the additional counter upon receiving approval from all concessionaires. Answer – The language regarding Rental Office and Customer Counters Areas has been revised. See Revised RFB issued with this Addendum.

41. Please confirm only one original is required. Answer – Only one (1) signed original is required for each Bid.

42. The bid bond language refers to “the specified form” but none was provided. Please provide. Answer – The specified form is any of the following: cashier’s check, certified check of a bank or trust company, or bid bond.

43. Bidder Information Form. This asks for our most recent credit rating which is difficult to obtain and of little use to the Airport. Please waive for incumbent operators who have demonstrated their ability to operate a rental car concession at LAN by doing it for the past several years without incident. Addendum #1 Page 8 of 10 Answer – The requirement to provide the latest credit rating on the Bidder Information Form has been removed however the Bidder must provide this information if requested by the Airport Authority after its review of the Bidder’s Bid.

44. Please provide the exhibits for the service facilities, counters and ready/return area. Answer – See Revised RFB issued with this Addendum.

45. Please indicate how TNCs (Uber, Lyft, Turo, etc.) are regulated at the Airport. Answer – Uber and Lyft are regulated under the terms of their agreements with the Airport Authority.

46. Section 4.1 – please confirm that any other rental car/car sharing agreements awarded during the term of the agreement will be on the same terms and conditions as the agreements awarded under this bid, excluding MAG. Answer – See Revised RFB issued with this Addendum.

47. Please revise Section 4, 3a to confirm that companies which own multiple brands or affiliate companies that own family brands (i.e., two separate companies owned by the same parent company) may each submit a bid and will not be considered to have colluded or otherwise bid in violation of the RFB. Answer – See question #21 and its answer.

48. Provide for public opening. Answer – See answer to question #6.

49. Modify Concession Agreement extension to make mutual (not sole discretion of CRAA) Answer – See Revised RFB issued with this Addendum.

50. Provide definition of “contract year”. Answer – See definition of “Agreement Year” is revised RFB issued with this Addendum.

51. Please provide proposed concession and Lease Agreement and permit review and comment period. Answer – An additional question deadline has been added and the Bid Deadline has been extended. See Revised RFB issued with this Addendum.

52. With regard to ACDBE compliance and this RFB, are the vendors who are certified as DBE and / or ACDBE both counted towards the participation goal? Answer - No, only certified ACDBEs can be counted in the ACDBE Program and they must be certified in the state where the contracts are let so they must be certified in the Michigan DBE/ACDBE directory, to be counted. Outreach to national certified ACDBEs (see attached list) can be done to achieve the goal. You would have to encourage them to certify in Michigan and you need to use them in order to count them.

53. We are unable to provide an ACDBE Certified Monthly Participation Statement (MPS) by the 15th day of each following month. Our FINAL accounts payable data feed is received between the 15th – 18th of each following month at which time said compliance reports can be prepared. Answer - By the 20th of the following month will be fine. Addendum #1 Page 9 of 10 54. Where should the diverse vendors (DBE / ACDBE) be certified in order to be compliant? See above, where the contracts are let, in the State where the airport is located. https://mdotjboss.state.mi.us/UCP/

55. Regarding page 8, 18 (d), please confirm reference to “this Section 38” is typo and reference should be to “this Section 18”, or provide Section 38 Answer – This is a typo. See Revised RFB issued with this Addendum.

56. Confirm financial statements not required with submission of bid. Answer – Financial statements are not required to be submitted with Bid but may be requested by the Airport Authority during review of the Bids. Also see Revised RFB issued with this Addendum.

57. Eliminate MAG. Alternatively, eliminate first year MAG minimum. Answer – MAG has not been eliminated but some MAG language has been modified. See Revised RFB issued with this Addendum.

58. Make subsequent years 85% of concession fees paid (same for renewal term) Answer – MAG requirement is 9% of Gross Revenues. Gross Revenues will be used, not Concession fees paid. This adds consistency to the agreement, and can actually benefit the Concessionaire if the MAG is used several times throughout the year.

59. Include MAG abatement language Answer – See Revised RFB issued with this Addendum.

60. Adjust MAG in event of new entrant Answer – New entrant language has been modified. See Revised RFB issued with this Addendum.

61. Provide terms and usage fees Answer – See Form of Agreement and Revised RFB issued with this Addendum.

62. Costs associated with relocation should be borne by party moving. High bidder should not be penalized or discouraged from moving by having to pay for a displaced rental car. Answer – All affected bidders will be responsible for the cost of the relocation out of / in to their facilities, unless otherwise agree to in RFB. All rental car companies will share the cost of rental car parking space relocation in the Ready/Return parking lot. Also, Section 3, subsection 9 of the RFB has been revised to provide additional information regarding repair/improvement funding and environmental liability.

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