REQUEST FOR PROPOSAL RFP 00317808-14
Lounge Management Services at Seattle-Tacoma International Airport
The Port of Seattle (Port) invites the submittal of written proposals from qualified firms, or teams of firms, interested in providing management services for the operations of premium lounges at Seattle-Tacoma International Airport (Airport).
I. SCHEDULE
The selection process is outlined below. The Port intends to maintain this schedule and requests the same of firms interested in submitting a response to this solicitation. The Port does, however, reserve the right to modify the schedule as circumstances warrant.
Description/Task Date (Time)
Advertisement September 3, 2014 Pre-Proposal Conference September 23, 2014 Last Day to Submit Questions and Conflict of Interest September 23, 2014 Proposals Due October 14, 2014, 2:00 P.M. Short-List and Notify Proposers October 24, 2014 Interviews November 4, 2014 Contractor Selection/Notification November 20, 2014 Execute Contract Week of February 23, 2015 Anticipated Contract Start Date Week of March 8, 2015
The aforementioned procurement schedule is subject to change as the schedule is contingent on Port internal approvals.
All questions must be submitted in writing through the Port’s PRMS website by the question deadline date aforementioned, in order to allow adequate time for preparation of a response. Questions are to be posted on the Questions tab of the solicitation on the PRMS website: https://hosting.portseattle.org/prms/. Questions received after this deadline may not be considered. Communication with the Port regarding this procurement shall be directed to Victoria Bristol, [email protected]. Communication with Port officials other than those listed herein may cause the firm involved to be disqualified from submitting under this solicitation. All proposers are strongly encouraged to register on the Port’s PRMS website and add their company to the Plan Holder’s list located under the Plan Holders tab of the solicitation in order to receive notification of addenda publications to the solicitation.
Communication with the Port regarding this procurement shall be directed to Victoria Bristol, [email protected]. Communication with Port officials other than those listed herein may cause the firm involved to be disqualified from submitting under this solicitation. All proposers are strongly encouraged to register on the Port’s PRMS website and add their company to the Plan Holder’s list located under the Plan Holders tab of the solicitation in order to receive notification of addenda publications to the solicitation. In order to be considered for this work, a written Proposal must be received no later than 2:00 P.M. PST on October 14, 2014.
II. PRE-PROPOSAL CONFERENCE
The Port intends to conduct a pre-proposal conference to answer questions regarding this solicitation on September 23, 2014 at 10:00 A.M. – 12:00 P.M. in Room “London” at Seattle-Tacoma International Airport, located on the Mezzanine level on the south end of the terminal. A brief tour of Club International and Club Cascade will be provided to attendees. This meeting is not mandatory, but interested firms are strongly encouraged to attend. If your company plans to attend this event, please email Victoria Bristol at [email protected] by advising on the number of individuals from your company that are planning to attend so the Port can make appropriate arrangements.
III. PROPOSAL FORMAT REQUIREMENTS
A. The Port is requiring electronic submittals for this solicitation. Hard copy submittals will not be accepted. B. Submittals must be delivered through e-mail to [email protected]. It is the responsibility of the Submitter to ensure timely delivery of submittals. 1. The e-mail submittal shall include the Request for Qualifications number, title, and due date and time in the subject line of the submittal e-mail. 2. The Port’s e-mail server will not accept files larger than 10 MB. 3. The Port will use the time stamp on the submittal e-mail to determine timeliness. 4. Submitters are responsible for ensuring timely delivery of submittals. 5. The Port is not responsible for submitters’ technical difficulties in submitting electronically. 6. Late submittals will not be evaluated. C. Submittal shall meet the following requirements: 1. Submittals shall be formatted in searchable .pdf format. 2. The body of the submittal shall be organized in accordance with the Evaluation Criteria. Each section of the submittal must be separated by a separator page. Separator pages will not contain any text beyond the section name. Separator pages are not considered part of the total page count. 3. The body of the submittal, when printed, shall be limited to 20 letter-sized (“8.5 x 11”) pages of content. In the event that the body of the submittal exceeds the page limitation, excess pages will not be considered. After removal of the excess pages, the submittal may further be rejected as unacceptable or uncompetitive if the Port concludes that it would not have reasonable chance for award or is outside the competitive range.
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4. The following required items are not included in the page count limitation: a. Letter of Interest. Include a 1 page, single-sided Letter of Interest. Include the name, phone number, e-mail address, and mailing address of the point of contact for this RFP. All communication will be sent to this person. b. An Appendix, which shall include the following: i. Resumes of proposed staff. Each resume shall be limited to (1) single-sided, letter- sized page. ii. Organizational chart demonstrating the key proposer staff, hierarchy and reporting relationships within the proposer organization. Identify staff by name and position. iii. List of revisions that proposer requests be made to the Contract Terms and Conditions in Attachment F. This may be done either as a redline revision of the attached draft or as a list of proposed changes. For each requested change, the proposer shall clearly indicate the reason for the proposed change. The Port will not, absent unusual circumstances, consider any changes to the agreement form that are not identified in the response. The Port specifically reserves the right to consider any suggested revisions as part of its review process and may, as it believes appropriate, make adjustments to proposer’s score in the various selection criteria identified below in the event that the proposed changes would affect a material changes in the risks and/or responsibilities of the parties. Any particular adjustment will, however, be tied to the specific criterion (or criteria) affected by a proposed change.
IV. CONTRACT TERMS AND CONDITIONS
Selected proposer shall enter into an agreement with the Port. A draft of this agreement is included as Attachment F. The Port specifically reserves the right to negotiate the final agreement terms with the selected proposer. The Port will be guided by the attached draft and the comments, if any, provided by the selected proposer in negotiating the final terms of this agreement. The proposer shall provide comments as an appendix to the proposal, as set forth above. The attached draft shall not, however, operate as a limit to the Port’s ability and authority to negotiate the final terms of this agreement as the Port determines to be in the best interest of the Port and its stakeholders.
V. SELECTION PROCESS
A. General Information 1. Compliance with Legal Requirements. a. The procurement of these management services will be in accordance with applicable federal, state, and local laws, and Port policies and procedures. The Port of Seattle reserves the right to reject any and all submittals. b. The Port of Seattle will evaluate the submittals in accordance with the provisions set forth herein. If the Port makes a selection, it will select the Proposer it determines to be the most highly qualified on the basis of its evaluation. 2. Addenda. All changes shall be documented via addenda. Submitters are advised to not rely on verbal information or direction. Email notification of addenda will be provided to all firms still under consideration, and/or on the submitters list at the time the addendum is issued. Interested firms are responsible for ensuring that current registration information is on the submitters list and have obtained all addenda.
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3. Minor Informalities & Cancellation. The Port reserves the right to waive any minor irregularity and/or reject any and all firms and cancel the procurement. 4. Costs borne by Proposers. All costs incurred in the preparation of a submittal, and participation in this solicitation and negotiation process shall be borne by the submitting firms. 5. Public Disclosure. Submittals shall become property of the Port and considered public documents under applicable Washington State laws. All documentation provided to the Port may be subject to disclosure in accordance with Washington State public disclosure laws. 6. Insurance. Insurance requirements for this contract are contained in Attachment F. 7. Organizational Conflicts of Interest. A conflict of interest may exist when a proposing firm or individual performs services for another entity if those services (1) potentially adversely impact the Port of Seattle or (2) require or result in disclosure of confidential information. See Port of Seattle Consultant Ethics and Conflict of Interest policy, CC-2. The Port of Seattle will evaluate whether a proposer has a relationship, contract, or other activities that may result in the proposer (1) having a financial interest in a competing business; (2) being unable, or potentially unable to render impartial assistance or advice to the Port, or (3) having impaired objectivity in performing the contract. If a conflict of interest exists and the Port is unwilling to waive the conflict, the Port will not enter into a contract with the proposer. Any proposer and entity or individual potentially working for the proposer must disclose any financial interest in a competing organization. Proposers and potential subcontractors are encouraged to identify as soon as possible, but no later than the date set forth in the schedule, any facts that may be considered a potential or actual conflict of interest to Victoria Bristol, [email protected]. 8. Protests. Protest procedures are contained in Attachment E. B. Submittal Evaluation, Short List & Interviews
1. Proposals will be evaluated in accordance with the criteria established in this solicitation. The result of the evaluation will be a comparative ranking of proposers. The evaluation will be given the following relative weights: a. Proposal 100 Points b. Interview 100 Points c. Total 200 Points 2. The Port may seek clarification and/or ask for additional information or a revised proposal. Responses to such requests may be considered in evaluating the proposal. 3. The Port, at its option, may elect to conduct interviews with proposers in the competitive range following evaluation of the proposal. The interview will consist of a 1-hour question and answer meeting. Proposers will not be given questions to prepare for in advance of the interviews. Formal presentations are not allowed unless specifically requested by the Port.
VI. SELECTION DECISION & NEGOTIATIONS
1. The selection decision and final ranking will be based on the combined proposal and interview scores.
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2. All proposers will be informed of their status on this solicitation through formal notification. The selected firm(s) will be invited to enter into contract negotiations through Notice of Selection. 3. The Scope of Work is a draft and may be revised during the selection and negotiation process.
4. If the Port is unable to finalize a contract with the first ranked firm, the Port may either enter into negotiations and a contract with the next ranked firm or cancel the procurement.
VII. EVALUATION CRITERIA AND SUBMITTAL INFORMATION
The evaluation criteria will be used to score the submittals and are listed in relative order of importance. All criteria are important, however, and submitters should provide equal attention to thoroughly responding to each criterion. In responding to the evaluation criteria, submittals should be organized so that the submitter’s qualifications are clearly illustrated in each of the categories, using the submittal requirements for each criterion.
A. Proposed Cost – 35 Points The Port will evaluate the Proposer’s management fee(s) and operating expense projections for providing the services as requested through this RFP. The management fee(s) will be evaluated as to the fee(s) that best align with the interest of the Port. Note: Proposers shall utilize the Port-created activity forecast included within this RFP as a basis for submittals. Port staff will evaluate the responses to the items below in conjunction with the provided activity forecast. For RFP evaluation purposes, the Port will utilize responses based on the Port-created activity forecast. Although the Port will utilize the Port- created activity forecast for RFP evaluation purposes, it does not guarantee the activity forecasts. Actual activity may differ significantly from the forecast.
Submittal Requirements: Completion of excel spreadsheet titled “Criterion A - Proposed Cost” which can be obtained from the “Documents” tab of the solicitation on the Port’s PRMS site. The yellow highlighted cells in the excel spreadsheet shall be completed by proposer. The excel spreadsheet will identify the Management Fee Schedule and Operating Expense Projection.
1. Management Fee Schedule: Although the Port is prepared to consider alternative proposals, the Port has established a baseline structure for the compensation of the Manager. This structure consists of three parts: (i) an annual, fixed amount, which will be paid to Manager in equal monthly amounts, that does not vary based on the number and/or location of lounges for which Manager is responsible, (ii) an additional, optional, monthly amount (subject to proration, if appropriate) that will be paid to Manager for each additional lounge beyond the first for which Manager is responsible, and (iii) an incentive management fee, which will be paid to Manager annually based on year-end results, predicated on the operating results of all lounges for which Manager is responsible. The management fee is intended to compensate Manager for: (i) the cost of its On-Site Manager, (ii) any time and effort spent by Manager’s executive staff, (iii) Manager’s general corporate overhead, and (iv) any profit Manager seeks to make. Proposer shall submit a management fee schedule addressing these three elements: RFP 00317808-14 Lounge Management Services Rev. 1, 05/16/2013 Page 5 of 11
a. An annual fixed management fee for each of the initial three years and each of the potential one-year renewals (for total duration of five years). This annual amount will be divided into twelve equal monthly payments. The amount will not vary based on the number of lounges in operation. b. The monthly amount of any incremental base management fee for each lounge in addition to the first that Manager is responsible to manage. Manager should submit this monthly amount for each of the initial three years and each of the potential one- year renewals (for total duration of five years). This amount will be paid only for the period of time that an additional lounge is in operation, and will specifically be subject to proration in the event that an additional lounge opens or closes other than on the first or last day of the month. c. An annual incentive management fee that is expressed as percentage of the Net Operating Income of all of the lounges in operation (whether or not in operation for the entire year) over each year of the agreement. Please carefully review the draft agreement attached as Attachment F to understand the pre-established framework for the incentive management fee. The incentive management fee will be paid annually based on year-end results. An incentive management fee will be paid only if the Gross Margin from lounge operations is equal to or greater than 40%. Proposers may include variable, or tiered, percentages based on Gross Margin above 40%, but only for the categories shown below: 1. Equal or greater to 40% but less than 50% 2. Equal or greater to 50% but less than 60% 3. Equal or greater to 60% but less than 70% 4. Equal or greater to 70% For example, proposer may bid one percentage for Gross Margin at or above 40%, a separate percentage at or above 50%, and another percentage for Gross Margin at or above 60%, etc. However, the tiers are not required and a proposer may decide to include only one percentage amount above 40% Gross Margin. The incentive management fee will be paid based on the Net Operating Income for the year. Manager shall submit this annual percentage amount for each of the initial three years and each of the potential one-year renewals (for total duration of five years). Optional: In addition, in the event that Manager would propose any other, alternative method for compensation, Manager should separately and clearly set forth the terms of that proposal. The Port will specifically evaluate both Manager’s response to the baseline framework established by the Port and any separate framework proposed by Manager. The Port shall utilize the most favorable of the two to the Port in its scoring of Manager. The Port has not included any documents or templates for completion by Proposer of any and all alternative methods for compensation. Proposers shall determine how to display and present this information within the allotted page limit for the RFP.
2. Operating Expense Projection Based on the Port-created activity forecast included in this RFP, Proposer shall submit a detailed operating expense projection for its proposed operation of, initially, two lounges located at the Airport (additional lounges may be included in the future). The projection should be inclusive of the five year agreement timeline (three year term plus two, one-year
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extension options) and include all lounge(s) related expenses, including proposed management fee(s). The projection should clearly show each location’s expenses as separate entities. Note: Proposer will need to adhere to Port of Seattle Resolution 3694 setting hiring standards, training opportunities, and minimum compensation associated with safety and security at Seattle-Tacoma International Airport if Proposer requires any employees to have blue security badges as part of their operation of airport lounges through this contract. Port of Seattle Resolution 3694 can be accessed at the Port’s Quality Jobs page at http://www.portseattle.org/About/Commission/Pages/Quality-Jobs.aspx. Proposer will also need to be aware of any future decisions regarding Proposition 1 in the City of Seatac, WA and their potential impact on minimum wage requirements for employees.
B. Proposed Concept and Management Plan of Port’s Premium Lounges – 35 Points The Port will evaluate the following: 1. Proposer’s flexibility to provide lounge service at varying hours based on activity and airline needs.
2. Demonstrated ability and capacity to manage multiple lounges.
3. The overall appeal of proposed premium service concept as it fits into the Port’s brand for purpose of marketing the Airport lounges to airlines and the general public.
4. Proposer’s plan to avoid overcrowding while providing reliable and efficient service and delivering revenues to the Airport.
5. Proposer’s plan to accommodate walk-up, or day-use, customers in addition to the agreement-based airline passengers.
6. Plan for management of operations and customer service that ensure high standards are maintained, airline customers are satisfied, and operations are financially sustainable.
7. Reliability and sustainability of detailed plan for operations and staffing.
8. Effective plan for recruitment, training and retention of talented and high-performing staff/employees. 9. Demonstrated ability to properly account for multiple lounges in accordance with Generally Accepted Accounting Principles (GAAP), including revenue, expense, and activity tracking as well as the ability to forecast and plan operational needs based on forecasted activity. Reports required by the Port will include Income Statements, Balance Sheets, Transaction Details Reports, Reconciled Bank Statements. Also, Proposer’s ability to accurately and precisely account for employees’ time worked with no discrepancies and to properly account for any and all payroll taxes. 10. Proposer’s understanding and familiarity procuring food and beverage items in an airport setting and ensuring best value of the procurement of the food and beverage items. 11. Proposer’s demonstrated ability to support Port’s goal of utilizing small businesses.
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12. Proposer’s demonstrated ability to manage a lounge reservation system to handle on- line lounge reservations. This includes the Proposer’s ability and willingness to provide and operate its own system and the Proposer’s ability to incorporate a Port-supplied system into its operation at such time that the Port implements such a system 13. Proposer’s ability to implement and manage special promotions, including coupons, discounts, special offers as well as loyalty/rewards programs, if the Port decides to implement these services.
Submittal Requirements: 1. Describe the operational relationship, level of oversight and interaction of corporate management, in order to assure first-class operations and, specifically, how it would support local staff. 2. Provide resumes in Appendix of key staff to serve in management positions at the Airport including relevant qualifications, job description and level of responsibility. 3. Explain the company’s philosophies and goals regarding recruitment of management and front-line staff. 4. Describe in detail your plans for recruitment and retention of talented and high- performing staff/employees. Describe what you will offer staff in terms of their development on the job or other incentives. 5. Describe in detail your management plan for operations, including daily operations, staffing policies and employee responsibilities. Specifically describe the staffing plan for a typical one-week period demonstrating your ability to manage and open/close multiple lounges at the Airport to meet Port and airline needs and measures as to how over-crowding will be managed and mitigated. The staffing plan should include number of employees utilized, types of positions/functions, and wage levels. 6. Describe your plan for ensuring a premium level of customer service at the lounges. Also, describe any ideas or thoughts on ways to increase revenues and net income within the lounges. 7. Describe in detail your plan for accommodating walk-up, or day-use, passengers into the clubs. Please consider operating constraints, such as hours of operation, staffing, etc. as you provide detail on managing capacity. In addition, please describe your intended process for denying access to the lounges to walk-up passengers in over- capacity situations. 8. Provide a structured plan on how the facilities are operationally maintained. Include preventative maintenance programs, cleaning schedules, brand/vendor oversight, and any other information deemed to be important. 9. Describe your plan for ensuring that proper accounting (GAAP) and record-keeping of the lounges will be in place during the contract. Describe the procedures and processes that will be in place to track revenues, expenses, and activity for each lounge location. Include in the description your process for ensuring accurate time sheets for employees as well as accurate accounting of payroll taxes. 10. Describe your sourcing methodology and identify the names of potential sources for procuring the food, beverages, glassware, flatware, and all other food beverage related goods. Describe how your methodology will ensure that you are achieving the best value for the procurement of those items.
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11. Describe how you will support and utilize small businesses for procurement of goods and services and how you will strive to support the Port’s goals of utilizing small business participation, either through procurement of goods from small businesses or through other small business partnerships or promotions. 12. Describe how you will utilize a lounge reservation system in operation of the lounges if the Port decides to implement reservation services. The Port intends to provide a reservation system at some point during the life of the contract. Please describe if and how you will provide your own reservation system prior to the Port providing its own system. Also, describe your ability to utilize a Port- provided reservation system and discuss any complications or challenges. 13. Describe how you might develop, implement, and manage special marketing promotions for the lounges, including coupons, give-aways, discounts, and other promotional offers. Also, please describe how you might incorporate a loyalty/rewards program into lounge operations.
C. Experience and Qualifications – 30 Points The Port will evaluate experience, qualifications, and reliability based on the following: 1. Proposer’s demonstration of experience and expertise in managing and operating premium lounges in an airport lounge environment and its capability to adapt to the unpredictable transportation environment. 2. Evidence of revenues earned under other relevant contracts. 3. Evidence of financial stability. MINIMUM QUALIFICATIONS: 1. Proposers must have at least one year of experience in management and operation of a lounge.
Submittal Requirements: 1. Describe the experience and qualifications of managing and operating lounge facilities in airports. Provide a list that identifies the following: • Location of lounge (ie- airport location, city, etc.) • Begin and end dates of the management term • Size of property managed in square footage • Description of the property type • Description of the responsibilities in relation to management and operation of the facility • Photos or illustrations of existing locations are encouraged. • Type of agreement associated with each operation:
o Please describe how you were compensated for your services, whether through a flat fee with possible incentive payments, or, through a percentage of sales/net income
o Please state what level of decision-making and control you had over lounge operations including purchasing of operating items (labor, food/beverages, etc.)
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2. Describe your experience in projecting food needs, procurement of necessary supplies and equipment for those lounges, especially with multiple lounges in a single location (such as two lounges in an airport). 3. Explain the company’s philosophy when analyzing new opportunities for premium lounge services. What due diligence is performed to ensure the opportunity is a good match for the company’s goals, as well as the airport? 4. Describe any experience the company has had working with transition plans either as the outgoing or incoming tenant. 5. Describe any experience the company has had working with lounge reservation systems to pre-book lounge visits. This may include utilizing a purchased software package, or, creating a proprietary system to handle lounge reservations. 6. Describe your experience in developing, implementing, and managing special promotions and marketing plans, including coupons, discounts, and special offers/give-aways. Describe how you might implement these types of campaigns at the airport lounges. Also, please describe your ability to implement these campaigns if the Port decides on future implementation. 7. Describe your experience in developing, implementing, and managing a customer loyalty/rewards program. Describe how you might implement these types of programs at the airport lounges. Also, please describe your ability to implement these programs if the Port decides on future implementation. 8. Please provide a list of other relevant contracts and revenue history of the last five (5) years.
9. Please provide any and all financial statements for the company, including income statements, balance sheets, and cash flow statements for the years (fiscal or calendar) 2011, 2012, and 2013.
END OF REQUEST FOR PROPOSALS
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List of Attachments
Submitters should become familiar with each of these attachments. Understanding these documents will become part of or referenced when developing and signing the Services Agreement, and any future amendments, for services with the Port.
Attachment A: Scope of Work Overview Attachment B: List of Designated Lounges Attachment C: Lounge Background and Passenger Traffic Report Attachment D: Lounge Maps – available under “Documents” tab of the solicitation on Port’s PRMS site Attachment E: Protest Procedures Attachment F: Draft Agreement Attachment G: Lounge Pro-Formas – available under “Documents” tab of the solicitation on Port’s PRMS site Attachment H: Port Consultant Ethics Policy CC-2
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Lounge Management Services RFP 00317808-14 Attachment A Scope of Work Overview ATTACHMENT A – SCOPE OF WORK OVERVIEW
The lounge management team will manage and operate premium lounges at the Airport that will help meet the objectives set forth below. For a more complete statement of the scope of work, please see the draft agreement attached as Attachment F.
Scope of Work Overview
• Fulfill Port’s Lounge Vision: . The Port wishes to create world class premium lounges to service important international airlines that do not have their own branded lounges at the Airport. The Port’s premium lounge service and amenities should reflect the Airport, the Pacific Northwest, and accommodate the broad spectrum of current and potential new airline customers. The premium lounges should have a marketable brand to be used in promotional and marketing materials. The current lounge name for the south satellite location will be Club International and the name for the concourse A location will be Club Cascade. These names are subject to change at any time at the sole discretion of the Port of Seattle.
• Creation of a business plan for the proposed premium lounges that includes the fulfillment of Port’s brand, food and beverage menus, and other premium services to be offered. Although a capital investment is not required as part of this RFP, the Proposer may suggest improvements to facilities or furnishings as part of their business plan. The Port will work with the selected Proposer on establishment and approval of a lounge services business plan. However, the Port will have complete authority on branding, marketing, and promotion of the lounge.
• Ensure efficient, reliable and profitable operation of lounge services at designated lounges at the Airport (primarily the Club International in the south satellite and Club Cascade in concourse A, and may include future lounges).
• Avoid over-crowding in the lounges. Ensure there is adequate space to provide a premium experience for customers of airlines that have existing agreements to utilize the lounges. Any airline-associated customers (paid for by airline) should take priority over any pay-per-use walk-up customers. The Port wishes to avoid complaints about overcrowding and wishes to ensure that the lounges are attractive to both existing airline customers, and new airlines that are considering utilizing the Airport if adequate space is available in the lounges.
• Hiring, training, scheduling, assignment, management and supervision of personnel so as to ensure highly disciplined, courteous and efficient services including purchasing, storage, inventory of food, beverages, equipment and supplies, cleaning of facilities, record keeping, and safekeeping of equipment and supplies at all times.
Lounge Management RFP 00317808-14 Attachment A – Scope of Work Page 1 of 2 • Maintain clean, attractive, safe and well-maintained facilities at lounges at all times.
• Compliance with health and safety standards, regulations and laws, including but not limited to the requirements of local and state agencies related to food handling and service.
• Compliance with liquor control laws and rules of the State Liquor Control Board in all matters related to serving alcohol at Designated Lounge(s). The firm must be able to obtain a liquor license, maintain a current liquor license, and comply with all Federal, State, County and City laws in the sale of alcohol and tobacco.
• Provide a transition plan and work closely with the outgoing tenant to ensure uninterrupted operations and customer service.
• Provide any vehicle(s) that may be necessary for the day-to-day operation of the lounges, including transfer of goods and employees between lounges, procurement of goods, etc.
Lounge Management RFP 00317808-14 Attachment A – Scope of Work Page 2 of 2
Lounge Management Services RFP 00317808-14 Attachment B List of Designated Lounges ATTACHMENT B LIST OF CURRENT AND POTENTIAL DESIGNATED LOUNGES WITHIN SEATTLE-TACOMA INTERNATIONAL AIRPORT
Club International and Club Cascade will be the primary focus of the services indicated in this RFP. Other lounges at Sea-Tac International Airport (several listed below) may be potential future locations that the Port may request selected Proposer to manage.
Current Lounges in Operation Name Location Area/footprint Kitchens Bars Restrooms A Concourse, Yes, in Club Cascade opposite gate 4,886 sf 1 1 lounge A11
South Satellite, Yes, in Club International 4,111 sf 1 1 next to gate S9 lounge
Potential Lounges (not in o peration, or being utilized for alternative purposes) Name Location Area/footprint
South Satellite, Club International mezzanine 2,024 sf North level South Satellite, Club International mezzanine 2,165 sf South level Former Concourse B, United/Continental 1,806 sf near gate B9 lounge
Note: this is not an exhaustive list of potential lounges, but only those that have been identified as potential lounges. Other lounge locations may be identified in the future.
Lounge Management RFP 00317808-14 Attachment B – List of Lounges Page 1 of 1
Lounge Management Services RFP 00317808-14 Attachment C Lounge Background and Passenger Traffic Report ATTACHMENT C LOUNGE BACKGROUND & PASSENGER TRAFFIC REPORT
I. BACKGROUND: The Port of Seattle owns and operates the Airport and its passenger terminals consisting of the main terminal, concourses A, B, C, D, north and south satellites, and the parking garage. Currently, the Airport has 78 gates and is served by some 32 airlines with both domestic and international destinations. In 2013, approximately 34.8 million passengers (31.2 million domestic, 3.6 million international) passed through the Airport. See the Passenger Traffic figures within this Attachment which includes the Airport passenger forecast through year 2019.
A. CLUB INTERNATIONAL AND CLUB CASCADE HISTORY:
The current Port premium lounge known as Club International has been in operation since the spring of 2010. During this time it has been successfully run by a third party under a management style operating agreement. The lounge opened in the spring of 2010 with one primary customer, Asiana Airlines. As an airline customer, Asiana (and other airlines) pays a “per-head” fee of $30 for each traveler that utilizes the lounge with a minimum fee of $300 per flight. Their exclusive usage of the lounge continued until the winter of 2011/2012 at which time they began using an alternative lounge at the south satellite. During this time, Condor Airlines had also been using Club International on a seasonal basis since the spring of 2010. They continue to use the club at this time, and their usage has followed a seasonal schedule of operation from approximately May 1 through October 31 each year. Since 2010, three other airlines started utilizing the club and are current customers including Emirates Airlines (since March 2012), ANA Airlines (since June 2012), and Lufthansa Airlines (November 2012). Additionally, in January 2013 British Airways began sending overflow passengers to the lounge during their peak hours. In October 2013, Club International also became the lounge location for Iceland air passengers. Depending on availability, Hainan Airlines also is allowed to send up to six passengers per day to Club International.
From the period of March 1, 2012 until December 31, 2012 the lounge had a total of 13,028 customers. These are the actual passengers from the airlines listed above that utilized the club and whose usage was paid for by the respective airline. From January 1, 2013 until December 31, 2013 the total customer count was 33,505. As of January 2014, the Port has opened the lounges for individual walk up customers (not associated or paid for by particular airlines) and without significant promotion/advertisement, the average demand has been approximately one walk-up customer per day at Club International at the south satellite. Club Cascade has not had any significant walk-up demand. Beginning in the summer of 2014, the Port began a promotional campaign in an effort to increase walk-up lounge demand.
Club Cascade was opened in late October 2013 to accommodate Hainan Airlines upon their move out of the British Airways lounge on the south satellite with the increased service by British to London starting in October 2013. Pricing for Club Cascade is consistent with Club International at $30 per head with a minimum fee of $300 per flight. Total passengers from Hainan utilizing Club Cascade has ranged from 10-20 per day, based on a limited number of flights per week. From October through December of 2013 the total customer count in Club Cascade was 552. In June 2014, Delta Airlines began operating flights out of Concourse A and as of August 2014, Delta passengers from this flight have been accommodated at Club Cascade. The Port and Delta reached an agreement for a bulk purchase of day passes for passengers.
Lounge Management RFP 00317808-14 Attachment C – Lounge Background and Passenger Traffic Report Page 1 of 4 More detailed passenger count information is contained within the included draft pro- forma for the lounges.
B. ENPLANEMENT AND AIR CARRIER INFORMATION:
Club International is located at the south satellite terminal of the Airport with the entrance located between gate lobbies S8 & S9. Club Cascade is located on the A concourse opposite gate A11. See Attachment B for a description of the lounges, including potential future lounges, and Attachment D for a layout and pictures of Club International and Club Cascade.
Included below is information regarding air carriers utilizing the south satellite, as this is the primary location for international travel. Note that Hainan Airlines departs from the south satellite and Club Cascade lounge customers from Hainan are transported via cart to the STS train taking passengers from the A concourse to the south satellite prior to their flight.
The current air carriers departing from the south satellite include: • All Nippon Airways (ANA)* • AMC (Air Mobility Command, military charter service) • Asiana • Delta (operates their own lounge but also utilizes the Port’s lounges when needed)* ** • EVA • British Airways* (operating their own lounge but uses Club International as an overflow) • Condor (seasonal operation)* ** • Emirates* • Hainan* ** (utilizes both Club International and Club Cascade) • Hawaiian • Icelandair* • Korean • Lufthansa*
*Notes current users of the Port’s Club International lounge
**Notes current user of the Port’s Club Cascade lounge
The south satellite is the predominant location of international travelers and Delta Airlines and is the location of Club International. The overall space within Club International is 4,111 square feet in size and offers two customer sections including first class/business class seating (32 seats) and general seating (approximately 70 seats). The lounge facility was improved by the Port in March of 2012, with an investment of $780k in interior construction improvements and $320k in furniture, fixtures and equipment.
Club Cascade, on concourse A is 4,886 square feet in size and has one main general seating area, along with a separate conference room and separate business room. The Port renovated Club Cascade in the fall of 2013 to accommodate Hainan Airlines starting in late October 2013. Similar upgrades were performed in Club Cascade as with Club International, including furniture, fixtures, equipment, and enhanced Wi-Fi service.
Listed below are the carriers utilizing concourse A for flights:
Lounge Management RFP 00317808-14 Attachment C – Lounge Background and Passenger Traffic Report Page 2 of 4 • Hainan • Delta
Because of these recent investments, the Port is not requiring a capital investment as part of this RFP, although the firm may choose to make additional improvements or investments if desired. Any such improvements or investments would need to be proposed and discussed with Port staff and receive staff approval prior to implementation.
Non-Club International and Club Cascade lounge locations: The Port reserves the future right to offer the firm the opportunity to operate any additional lounge(s) in the terminal if the Port decides, in its own discretion, it wishes to do so.
C. INTERNATIONAL ENPLANEMENT HISTORY:
In 2013, international travelers accounted for 10.2 percent of total enplanements at the Airport. Of these international passengers, 29 percent were on flights bound for Canada, 6% were on seasonal flights to Mexico, and 65% were intercontinental passengers traveling outside of North America. The Airport currently has nonstop service to six cities in Asia (Tokyo-Narita, Tokyo-Haneda, Beijing, Hong Kong, Shanghai, Seoul and Taipei), five cities in Europe (London, Amsterdam, Paris, Frankfurt, and Reykjavik), and Dubai.
The Airport has seen dramatic growth in international traffic over the last five years, with a 51% increase in passengers to Asia, Europe, and the Middle East between 2008 and 2013. In comparison, domestic traffic grew by just 6.7% over the same period. By summer 2014, the Airport offered 128 weekly intercontinental departures—almost double the 66 weekly flights in 2007. These increases are the result of both additional service by Delta, which has added service to Paris, Beijing, Shanghai, Hong Kong, Seoul and Tokyo-Haneda, as well as services by new carriers. Since 2008, the Airport has welcomed successful new service from airlines including Lufthansa (Frankfurt), Hainan (Beijing), Icelandair (Reykjavik), Condor (Frankfurt), Emirates (Dubai), and ANA (Tokyo- Narita).
Lounge Management RFP 00317808-14 Attachment C – Lounge Background and Passenger Traffic Report Page 3 of 4
PASSENGER TRAFFIC SUMMARY REPORT Note: this information includes all enplaned passengers at the airport, including international traffic.
HISTORICAL PASSENGER TRAFFIC
TOTAL ENPLANED/DEPLANED PASSENGERS (INCLUDING INTERNATIONAL PASSENGERS) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Enplaned 14,632,137 14,990,647 15,558,064 16,084,939 15,610,198 15,779,818 16,425,732 16,625,787 17,450,425 Deplaned 14,656,889 15,005,777 15,531,601 16,111,589 15,617,314 15,773,348 16,397,488 16,597,324 17,376,316 Total 29,289,026 29,996,424 31,089,665 32,196,528 31,227,512 31,553,166 32,823,220 33,223,111 34,826,741
TOTAL ENPLANED/DEPLANED PASSENGERS (INTERNATIONAL PASSENGERS ONLY) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Enplaned 1,224,164 1,226,559 1,348,292 1,437,456 1,314,012 1,398,385 1,501,371 1,633,691 1,807,178 Deplaned 1,248,871 1,252,266 1,362,517 1,484,978 1,319,718 1,409,767 1,483,657 1,614,378 1,772,187 Total 2,473,035 2,478,825 2,710,809 2,922,434 2,633,730 2,808,152 2,985,028 3,248,069 3,579,365
HISTORICAL/PROJECTED PASSENGER TRAFFIC Year Total Pax Increase (%) 2013 34,826,741 4.8% 2014 37,055,652 6.4% 2015 37,870,877 2.2% 2016 38,704,036 2.2% 2017 39,555,525 2.2% 2018 40,425,746 2.2% 2019 41,315,113 2.2%
Lounge Management RFP 00317808-14 Attachment C – Lounge Background and Passenger Traffic Report Page 4 of 4
Lounge Management Services RFP 00317808-14 Attachment D Lounge Maps *available under “Documents” tab of the solicitation on the Port’s PRMS site
Lounge Management Services RFP 00317808-14 Attachment E Protest Procedures ATTACHMENT E PROTEST PROCEDURES
A. Purpose (5) the specific ruling or relief requested. In the even the protesting party asserts the responsibility of any These protest procedures are included in this other Proposer as a ground for Protest, it must solicitation or request (for convenience, the “RFQ”) to address in detail the specific criteria identified in the provide a prompt, fair and equitable administrative particular RFQ. remedy to all proposers and prospective proposers (for convenience “Proposers”) regarding alleged F. Administrative Review. substantive errors or omissions in the RFQ or regarding any decision by the Port to award the The Protest shall be promptly considered on the contract, to declare a SOQ non-responsive, or to find a written submittal by the Contract Administrator. The Proposer not responsible. Contract Administrator will give notice of the Protest and provide a copy to any others as required. In its B. Timing sole discretion, the Contract Administrator may give notice of the Protest to other interested parties, Any Proposer showing a substantial economic including other Proposers. The Port reserves the right interested in the contract to be awarded under this to resolve or to attempt to resolve any Protest that RFQ may PROTEST to the Port only in accordance concerns the form or content of the solicitation and with the procedures set forth below. which Protest was received before the RFQ submittal C. Protests Based on the Form or Content of the deadline through written addenda to the solicitation Invitation/Request Documents: Any Protest based on documents. the form or content of the RFQ documents included The Contract Administrator will issue a written decision with the RFQ or any addendum (including, but not on the Initial Administrative Review following the limited to, any terms, requirements and/or restrictions receipt of the Protest, stating the reasons for the action therein) must be filed with the Port as soon as taken. In making his/her decision, the Contract practicable at 2711 Alaskan Way, P.O. Box 1209, Administrator may consult with others and consider Seattle, WA 98111. Attention: Director, Central information relating to the Protest from any source, Procurement Office. The transmittal envelope must including other interested parties. A copy of the clearly identify the RFQ number on its face and be decision shall be provided to the aggrieved party, and labeled as a “Protest.” No protest based on the form any other party as may be required, by either: (i) or content of the RFQ documents will be considered if personal service, (ii) facsimile, or (iii) email, with received by the Port later than: (i) five (5) calendar telephonic confirmation. days prior to the specified SOQ due date if there are ten (10 or more calendar days between the date on For all RFQs in which the expected value of the which the RFQ is first published and the date on which contract to be awarded is less than the amount set SOQs are due, or (ii) three (3) calendar days prior to forth in the following table, the decision of the Contract the specified SOQ due date if there are less than ten Administrator shall constitute the Port’s Final Decision. (10) calendar days between the date on which the For any such Invitation, there shall be no right of RFQ is first published and the date on which SOQs are Administrative Appeal as set forth in paragraph G of due. these Protest procedures, but the Port will stay award of the contract as provided in paragraph H, and the D. Other Protests: Protests based on any other aggrieved party shall have a right of judicial review as circumstances must be filed with the Port at 2711 provided in paragraph I. Alaskan Way, P.O. Box 1209, Seattle, WA 98111, Attention: Director, Central Procurement Office, within Type of Procurement Value two (2) business days after the Proposer knows or should have known of the facts and circumstances Goods, Materials, $100,000 upon which the protest is based. The transmittal Equipment and Supplies envelope must clearly identify the RFQ number on the Purchased Services $100,000 face of this document and be labeled as a “Protest.” No protest will be considered by the Port if all SOQs Personal Services $200,000 are rejected or if the protest is received after the award Professional Services $200,000 of the Contract. E. Contents of Protest To be considered, a Protest shall be in writing and G. Administrative Appeal shall include: (1) the name, street address, fax number 1. Right of Appeal. For any RFQ in which the and email address of the aggrieved party; (2) the RFQ expected value of the contract to be awarded is title and number under which the Protest is submitted; equal to or greater than the amount set forth in (3) the economic interest of the aggrieved party in the table in Section 4, the aggrieved party may appeal contract to be awarded under the RFQ; (4) a detailed the decision of the Contract Administrator by filing description of the specific grounds for the Protest and a Notice of Administrative Appeal at 2711 Alaskan any supporting legal and/or factual documentation; and Lounge Management RFP 00317808-14 Attachment E – Protest Procedures Page 1 of 2 ATTACHMENT E PROTEST PROCEDURES
Way, P.O. Box 1209, Seattle, WA 98111, provided advance notice thereof. Therefore, an Attention: Director Central Procurement Office, not aggrieved party that intends to commence judicial more than two (2) business days after receipt of proceedings shall specifically provide notice to the Port the initial Administrative Review decision. The prior to the commencement of such proceedings. The Notice of Administrative Appeal shall be in writing Notice shall be provided to the Port’s General Counsel and clearly labeled on the transmittal envelope as and Director, Central Procurement Office at 2711 a “Notice of Administrative Appeal.” A copy of the Alaskan Way, P.O. Box 1209, Seattle, WA 98111, initial Protest shall be attached to the Notice of (206) 787-3000. Administrative Appeal. The Contract Administrator will provide a copy of the Notice of J. Strict Compliance Administrative Appeal to other interested parties Strict compliance with these protest procedures is as required. essential in furtherance of the public interest. Any 2. Hearing. Promptly following receipt of the Notice aggrieved party that fails to comply strictly with these of Administrative Appeal, an appeal hearing shall protest procedures is deemed, by such failure, to have be conducted before a panel of at least two Port waived and relinquished forever any right or claim with representatives (“the Panel”). The Panel will respect to alleged irregularities in connection with the always include a representative of the Port of solicitation or award of the Contract. No person or Seattle’s legal department and a representative of party may pursue any judicial or administrative the Port’s Central Procurement Office. The proceedings challenging the solicitation or award of the hearing will generally be conducted within five (5) contract to be awarded by this Solicitation, without first business days of the receipt of the Notice of exhausting the administrative procedures specified Administrative Appeal, and the aggrieved party herein. and any other interested parties will be notified of K. Representation the time and place of the hearing. An aggrieved party may participate personally or, if a 3. Conduct of Hearing. Except as the Panel may corporation or other artificial person, by a duly allow in its discretion, no discovery shall be authorized representative. Whether or not available. At the Administrative Appeal Hearing, participating in person, an aggrieved party may be the aggrieved party will be given a reasonable represented at the party’s own expense, by counsel. opportunity to present relevant testimony and evidence and to make legal arguments. Other L. Computation of Time interested parties may also be given the In computing any period of time prescribed by this opportunity to do so. The hearing will generally be procedure, the day of the act or event from which the recorded, and the Panel shall maintain an official designated period of time begins to run shall not be record of all documentary evidence presented at included. The last day of the period shall be included. the hearing. The Panel shall issue a written Final The term “business day” shall mean any day on which Decision. A copy of the Final Decision shall be the Port of Seattle is open for regularly conducted provided to the aggrieved party, and any other business. Any document received after the close of party as may be required, by either (i) personal regular business hours (8:00 a.m. to 5:00 p.m.) shall service, (ii) facsimile, or (iii) email, with telephonic be deemed received the following business day. confirmation. M. Acknowledgement 4. Standard of Review on Administrative Appeal: On Administrative Appeal, the Panel will consider the By offering a submittal in response to this RFQ, the Protest, de novo. The aggrieved party shall, Proposer acknowledges that it has reviewed and however, be restricted from raising any matter or acquainted itself with the protest procedures herein ground not reasonably within the scope of the and agrees to be bound by such procedures as a materials placed before the Contract condition of offering a submittal. Administrator.
H. Stay of Award of the Contract The Port will stay award of the contract for two (2) business days, following the issuance of its Final Decision. I. Judicial Proceedings All judicial proceedings must be filed within two (2) business days of the issuance of the Port’s Final Decision. The stay provided by Section H. is specifically intended to ensure that any request for judicial relief proceeds orderly and that the Port is Lounge Management RFP 00317808-14 Attachment E – Protest Procedures Page 2 of 2
Lounge Management Services RFP 00317808-14 Attachment F Draft Agreement
LOUNGE MANAGEMENT AGREEMENT
Between
PORT OF SEATTLE
and
______
Table of Contents
SECTION 1 : DEFINITIONS ...... 1 SECTION 2 : APPOINTMENT OF MANAGER ...... 5 SECTION 3 : TERM ...... 6 SECTION 4 : DESIGNATION OF LOUNGES ...... 6 SECTION 5 : FEES AND REIMBURSABLE EXPENSES ...... 6 SECTION 6 : MANAGEMENT FIRM’S DUTIES ...... 7 SECTION 7 : SPECIFIC PORT RESPONSIBILITIES ...... 14 SECTION 8 : FINANCIAL ACCOUNTS ...... 16 SECTION 9 : NAMES AND LICENSE FOR MARKS ...... 18 SECTION 10 : INDEMNITY AND INSURANCE ...... 19 SECTION 11 : TERMINATION ...... 19 SECTION 12 : ASSIGNMENT ...... 20 SECTION 13 : MISCELLANEOUS ...... 20 SECTION 14 : SIGNATURES ...... 23
- i - LOUNGE MANAGEMENT AGREEMENT
THIS LOUNGE MANAGEMENT AGREEMENT is made as of this _____ day of ______2014 by and between the PORT OF SEATTLE, a Washington municipal corporation (the “Port”) and ______a ______corporation (“Management Firm”).
WHEREAS, the Port is the owner and operator of Seattle-Tacoma International Airport and desires to provide a wide range of services for the benefit of the air traveling public and others using the Airport; and
WHEREAS, demand for premium lounge service, particularly among international carriers and their customers, has increased in recent years; and
WHEREAS, to meet this demand, the Port has created certain premium lounges that allow for use by multiple airlines and their passengers simultaneously while providing a high level of service; and
WHEREAS, Management Firm has been selected, through a competitive process, to operate, manage and maintain the designated lounges established by the Port;
For and in consideration of the mutual promises, covenants and conditions hereinafter set forth, the parties agree as follows:
SECTION 1: DEFINITIONS
1.1 Airport. “Airport” shall mean and refer to Seattle-Tacoma International Airport, which is owned and operated by the Port.
1.2 Agreement. “Agreement” shall mean this Lounge Management Agreement, as the same may from time-to-time be amended, revised or restated.
1.3 Affiliate. “Affiliate” shall mean and refer to any Person that, directly or indirectly, (i) is owned by, (ii) owns, (iii) shares common ownership with, (iv) is controlled by, (v) controls, or (vi) is subject to common control with any Qualifying Person. Notwithstanding the foregoing, Affiliate shall not include any entity with shares or other equity interest of which are traded over any public exchange and for which the total number of shares or other equity interest held by all Qualifying Persons do not exceed five percent (5%) of the total number of shares or other equity interests outstanding.
1.4 Annual Plan. “Annual Plan” shall have the meaning set forth in Section 6.15.
1.5 Base Management Fee. “Base Management Fee” shall have the meaning set forth in Section 5.1.
- 1 - 1.6 Designated Lounges. “Designated Lounges” shall mean and refer to those specific lounges designed for Management Firm’s management as more particularly set forth in SECTION 4.
1.7 Executive Personnel. “Executive Personnel” shall mean Management Firm’s officers and directors and shall include [TO BE DEFINED] or any successor holding a similar position or exercising similar authority.
1.8 Expense Account. “Expense Account” shall have the meaning set forth in Section 8.3.
1.9 Gross Margin. “Gross Margin,” for any monthly, quarterly, semiannual or annual period, shall mean and refer to the percentage derived from the following calculation using the relevant amounts for the period:
( ) × 100%
퐺푟표푠푠 푅푒푣푒푛푢푒푠 − 푂푝푒푟푎푡푖푛푔 퐸푥푝푒푛푠푒푠 1.10 Gross Revenues. “Gross퐺푟표푠푠 Revenues”푅푒푣푒푛푢푒푠 – for any monthly, quarterly, semiannual or annual period – mean all income for the period, whether in cash or on credit (computed on an accrual basis in accordance with generally accepted accounting principles), received for food, beverage, services, or goods supplied to Lounge Users. Gross Revenues do not include the following:
1.10.1 Rebates, except to the extent that Generally Accepted Accounting Principles require their recognition as income, rather than a credit against expenses.
1.10.2 Insurance proceeds received by Management Firm under any policy of property insurance maintained either by the Port or Management Firm to repair damage to the Designated Lounges or any of its furniture, fixtures and equipment.
1.10.3 When properly recorded and accounted for, refunds allowed to customers because of unacceptable or unsatisfactory service to the extent that such refund was actually granted and adjustment actually made.
1.10.4 When properly recorded and accounted for, federal, state and local excise, sales, use or admission taxes collected directly from customers as part of or based on the sales price of goods and services, collected as an agent for the taxing body imposing the tax, and billed to the customer as a separate item. – AND –
1.10.5 Contributions by the Port to the Expense Account and interest, if any, earned on any funds in either the Revenue Account or Expense Account.
1.11 Incentive Management Fee. “Incentive Management Fee” shall have the meaning set forth in Section 5.2.
1.12 Lounge Users. “Lounge Users” shall include both Pay-Per-Use Customers and Pre-Paid Lounge Users. - 2 -
1.13 Net Operating Income. “Net Operating Income” – for any monthly, quarterly, semiannual or annual period – means Gross Revenues for the period minus both Operating Expenses and the Base Management Fee for the period.
1.14 On-Site Manager. “On-Site Manager” shall have the meaning set forth in Section 6.2.
1.15 Operating Expenses. “Operating Expenses” – for any monthly, quarterly, semiannual or annual period – means the aggregate of the following expenses for the period:
1.15.1 Employees. Cost of compensation, benefits and payroll taxes of all employees working full or part time at the Designated Lounges or while performing duties with respect to the Designated Lounges, excluding the On-Site Manager and Executive Personnel.
1.15.2 Employee Uniforms. Cost of all uniforms for Management Firm’s employees working at the Designated Lounges; specifically including the cost of laundry for those uniforms.
1.15.3 Employee Badges and Keys. Cost of Airport-issued identification badges and keys for Management Firm’s personnel working at the Designated Lounges;
1.15.4 Employee Parking. Cost of parking at the Airport for the On-Site Manager and, to the limited extent that Management Firm as part of the Annual Plan process demonstrates that it is a reasonably necessary expense in order to attract sufficient, qualified employees, such other of Management Firm’s employees for whom the expense is reasonably necessary.
1.15.5 Food and Beverage Service. Cost of food and beverages, including alcoholic beverages, for Lounge Users together with the cost of all serviceware, specifically including disposable items, for use in connection with food and beverage service.
1.15.6 Operating Equipment. Cost of operation, maintenance, and repair of all small operating equipment (e.g. coffee makers, microwaves, business machines, etc.), the cost of any operating supplies, and the cost for the replacement of items small operating equipment initially supplied by the Port.
1.15.7 Vehicle Operating Costs. Management Firm’s operating costs associated with the operation of any vehicle dedicated to providing lounge services. Vehicle operating costs do not include the cost associated with the acquisition of the vehicle, whether by way of purchase or lease, or any repairs to the dedicated vehicle. The vehicle operating costs are limited to such things as annual licensing, fuel, and routine maintenance.
1.15.8 Health and Liquor Licenses. Cost of applying for, obtaining and maintaining a health department license, a liquor license and any necessary permits and agreements to buy and serve food, beverages, and alcohol from the Designated Lounges.
1.15.9 Postage. Cost of postage and stationary provided to Lounge Users or for use by Management Firm’s personnel to perform work related to this Management Agreement; - 3 -
1.15.10 Periodicals. Cost of newspapers, magazines and other periodicals or read material made available in the Designated Lounges for Lounge Users.
1.15.11 Utilities. Cost of any telephone, internet, cable television or other utility service not specifically provided by the Port.
1.15.12 Liability Insurance. Cost of any insurance Management Firm is required to maintain under this Agreement and any deductibles or reasonable costs to cover any self-insured losses except if Management Firm or its employees or subcontractors were grossly negligent.
1.15.13 Taxes. Cost of all business taxes associated with the operation of the Designated Lounges, but specifically excluding federal, state or local taxes payable by Management Firm on account of any management fees paid to Management Firm by the Port, which taxes are Management Firm’s sole responsibility.
1.15.14 Accounting Fees. Cost of reasonable accounting fees for services directly related to the operation of the Designated Lounges and annual auditing fees;
1.15.15 Other Amounts. All other reasonable charges and expenses in the operation and management of the Designated Lounges to the extent set forth in an Annual Plan or otherwise authorized by the Port in writing and paid from the Expense Account.
Management Firm shall not be entitled to, and Operating Expenses specifically do not include, any “mark-up” or other increase by Management Firm in the amount of any expense otherwise falling within the definition of Operating Expense, whether to cover Management Firm’s overhead, costs of administration, or otherwise. Rebates shall, except to the extent otherwise required by Generally Accepted Accounting Principles, generally operate as a credit against (and thus reduce) Operating Expenses. Operating Expenses do not, however, include, the following:
1.15.16 Affiliates. Any amounts paid to an Affiliate or Qualifying Person (other than bona fide cost of compensation specifically allowed by Section 1.15.1) unless such amounts are expressly approved, in advance and in writing, by the Port as reasonable. – OR –
1.15.17 Fines. Costs of fines, penalties, exemplary damages and/or punitive damages levied or assessed as a result of any failure to comply with any federal, state or local laws, ordinances, regulations or requirements in the operation of the Designated Lounges (which amounts shall be Management Firm’s sole responsibility).
1.16 Pay-Per-Use Customer. “Pay-Per-Use Customer” shall mean those certain persons that the Port, pursuant to Section 7.3.2, allows to make use of the Designated Lounges on a per- use, per-day or other subscription basis.
1.17 Person. “Person” shall mean and refer to an individual, partnership, corporation, company, limited liability company, association, trust, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof.
- 4 - 1.18 Port Marks. “Port Marks” shall mean those trade and service marks utilized by the Port in connection with the operation of the Designated Lounges including, but not limited to, Club Cascade and Club International.
1.19 Pre-Paid Lounge User. “Pre-Paid Lounge User” shall mean those certain, specified passengers, customers and/or employees of airlines and other businesses with whom the Port, pursuant to Section 7.3.1, contracts for use of the Designated Lounges.
1.20 Proposal. “Proposal” shall mean and refer to Management Firm’s response to the Request for Proposals 00317808-13 issued by the Port for Lounge Management Services. By this reference, the Proposal is specifically incorporated into this Agreement but solely for purposes of identifying Management Firm’s On-Site Manager, describing Management Firm’s approach to the management of the Designated Lounge, including Management Firm’s pro forma to gauge Management Firm’s success over the term of this Agreement and provide input into the Annual Plan, and establishing the level of quality and services to be provided by Management Firm. In the event of any inconsistency between the terms of this Agreement and the Proposal, Management Firm shall be subject to the more stringent and/or favorable to the Port.
1.21 Qualifying Person. “Qualifying Person” shall mean and refer to either (i), Management Firm; (ii) any equity interest owner of Management Firm; (iii) any officer, director, manager, or employee of any of those Persons set forth in this section; and (iv) any spouse, parent, child, sibling, aunt, uncle, niece, nephew, cousin, grandchild, grandparent or any parent- in-law, son- or daughter-in-law, or brother- or sister-in-law of any natural person set forth in this section.
1.22 Rebate. “Rebate” shall mean any commission, rebate and/or allowance made available to Management Firm by vendors, suppliers and/or subcontractors (for convenience, “vendors”) related to, or arising out of, Management Firm’s responsibilities under this Agreement for operations at the Designated Lounges. Rebate specifically includes so-called: (i) unrestricted rebates (or credits) typically based on stated criteria (often volume) related to purchases from vendors, (ii) marketing or restricted allowances related to marketing and/or promotional initiatives undertaken by Management Firm and/or a vendor, and (iii) sponsorships, either cash or in kind, by which vendors provide specific consideration to gain exposure in connection with specific events, customers and/or activities.
1.23 Records. “Records” shall have the meaning set forth in Section 6.16.1.
1.24 Revenue Account. “Revenue Account” shall have the meaning set forth in Section 8.2.
SECTION 2: APPOINTMENT OF MANAGER
2.1 Appointment of Manager. The Port appoints Management Firm as the sole and exclusive manager of the Designated Lounges. Management Firm acknowledges appointment and agrees to act as the sole and exclusive manager of the Designated Lounges. Management Firm shall, at all times, act in the best interests of the Port, exhibiting undivided loyalty, obedience to the Port’s reasonable direction, and due care in all matters related to this Agreement. - 5 -
2.2 Port Retains Control. The Port shall have sole discretion to set the hours each Designated Lounge will be open for use, determine the rules of conduct for users, establish menus and decide other matters of policy relating to the operation of each Designated Lounge. This control specifically includes whether, and to what extent, to allow Pay-Per-Use Customers at any Designated Lounge. The Port shall retain the right to make changes from time to time in matters of policy relating to the operation of each Designated Lounge.
SECTION 3: TERM
3.1 Initial Term. The initial term of this Agreement is three (3) years, commencing March 9, 2015 and ending on March 8, 2018.
3.2 Extension. The term of this Agreement is subject to extension for two (2) successive one-year periods at the sole discretion of the Port. In the event that the Port wishes to extend the term, the Port shall provide Management Firm with written notice of its desire to extend the term at least three (3) months prior to the then-current expiration of the term.
SECTION 4: DESIGNATION OF LOUNGES
4.1 Initial Designation. The Port shall have the sole discretion to determine the number of locations of lounges at the Airport to be managed by Management Firm (the “Designated Lounges”). Attached hereto as Exhibit A is a list of the current Designated Lounges as well as a depiction of those Designated Lounges. The Port shall have the right to add or delete a Designated Lounge from the list of Designated Lounges on not less than thirty (30) days’ notice to Management Firm. The Port and Management Firm agree that the list of Designated Lounges may be revised from time to time during the term, and any revised list shall automatically be incorporated into this Agreement and update and replace the last issued list without the necessity of a formal amendment to the Agreement.
4.2 Subsequent Addition. In the event that the Port seeks to add any lounges to the list of Designated Lounges, the Port shall be responsible, at its sole cost and expense, for those physical improvements, including but not limited to new paint, carpeting and furnishings necessary to prepare the new lounge for use. None of the costs associated with any such improvements shall be considered “Operating Expenses” under this Agreement.
SECTION 5: FEES AND REIMBURSABLE EXPENSES
5.1 Base Management Fee. The Port will pay Management Firm a base management fee (“the Base Management Fee”) equal to:
5.1.1 The flat sum of ______($______) per month; a – PLUS –
5.1.2 The sum of ______($______) per month for each Designated Lounge in addition to the first that Management Firm is responsible to manage.
- 6 - As an example, if Management Firm is responsible for the management of three Designated Lounges, Management Firm shall be entitled to receive ______($______) ($______+ ($______x 2 additional lounges) = $______). These amounts shall specifically be prorated for any partial month. Management Firm may withdraw the Base Management Fee from the Expense Account each month on or after the first day of the month without advance notice or approval of the Port. In the event of overpayment of the Base Management Fee, Management Firm shall reduce the amount of the next monthly payment of the Base Management Fee by the amount of the overpayment or, following the termination of this Agreement, promptly remit that amount back to the Port as directed by the Port.
5.2 Incentive Management Fee. The Port will also pay Management Firm an incentive management fee (the “Incentive Management Fee”) as follows:
5.2.1 In the event that the Gross Margin is less than forty percent (40%), there shall be no Incentive Management Fee.
5.2.2 In the event that the Gross Margin is equal to or greater than the percentage amount set forth below, the Incentive Management Fee will be equal to the percentage of the Net Operating Income set forth below. AnnualGross Margin % of Net Operating Income 40%≤Gross Margin<50% 50%≤Gross Margin<60% 60%≤Gross Margin<70% 70%≤Gross Margin
The Incentive Management Fee will be calculated for each year (or partial year) of this Agreement (i.e. April through March). The Port will make payment of the Incentive Management Fee annually. Management Firm may withdraw the Incentive Management Fee from the Expense Account after the Management Firm has provided the Port an invoice and documentation supporting the calculation of Gross Revenues, Operating Expenses, Gross Margin, Net Operating Income, and the Incentive Management Fee for the year and received approval from the Port of the Incentive Management Fee amount, which approval shall be provided within thirty (30) days of receipt of the required documentation.
5.3 Reimbursable Expenses. Management Firm shall be reimbursed for any Operating Expenses to the extent paid by Management Firm and not out of the Expense Account.
SECTION 6: MANAGEMENT FIRM’S DUTIES
6.1 Professional Skill and Judgment. Management Firm shall use the highest standards of professional skill and judgment in managing the Designated Lounges and shall use all reasonable efforts to promote the reputation and financial success of the Designated Lounges. Management Firm shall provide all necessary support to operate the Designated Lounges for their intended purposes at all times. Management Firm shall not, directly or through any of its subcontractors or vendors, use the Designated Lounges or Designated Lounges resources to conduct business unrelated to the business of the Designated Lounges.
- 7 - 6.2 Full-Time Manager. As part of its Proposal, Management Firm identified an individual whose full time would be devoted to the management of the lounge services (the “On- Site Manager”). The On-Site Manager shall be the primary point of contact for communications relating to the Manager’s performance under the Agreement and the management of the day-to- day relationship with the Port. The Management Firm shall provide the Port with a phone number or phone numbers at which the On-Site Manager can be reached 24 hours a day, seven days a week. In the event that Management Firm, at any time and for any reason, seeks to change the On-Site Manager, the identity of any replacement shall be subject to the reasonable advance approval of the Port.
6.3 Admission to Designated Lounges.
6.3.1 Management Firm shall be responsible for ensuring that every person granted admission to a Designated Lounge as a Pre-Paid Lounge User presents sufficient proof of his/her status as a Pre-Paid Lounge User. In the event a potential user asserts that s/he is a “Pre-Paid Lounge User” associated with a particular airline but fails to present sufficient proof, Management Firm shall contact the Duty Manager of the appropriate Airline to resolve the issue. Management Firm shall create and maintain daily records noting and preserving reasonable evidence of each Pre-Paid Lounge User’s affiliation with the particular airline or other business for which the person is a Pre-Paid Lounge User.
6.3.2 Management Firm shall likewise be responsible for ensuring that every person granted admission to a Designated Lounge as a Pay-Per-Use Customer meets the requirements for admission and shall collect the established per-use fee (unless, as part of the same list of criteria, the Port provides a method for determining those potential Pay-Per-Use Customers that have already paid/made provision for payment). In the event a potential user asserts that s/he is an eligible “Pay-Per-Use Customer” but fails to present sufficient proof, Management Firm shall contact the Port Representative. With respect to Pay-Per-Use Customers, Management Firm shall create and maintain daily records that reflect the identity of each Pay- Per-Use Customer and the payment of the appropriate fee. Management Firm shall not be responsible for itemizing goods or services provided to each Pay-Per-Use Customer.
6.3.3 Management Firm shall take all reasonable measures to prevent the unauthorized entry to or improper use of Designated Lounges. Management Firm shall report any unauthorized entry or improper use to the Port Representative.
6.4 Menus. A menu (or menus) of goods and services to be provided by Management Firm at Designated Lounges is/are attached as Exhibit B. Management Firm shall provide the goods and services called for in the attached Exhibit B unless amended in writing by the Port.
6.5 Clean and Healthy Lounges.
6.5.1 Management Firm shall maintain the Designated Lounges so that they are clean, safe, and healthy in accordance with the best practices of Management Firm’s industry and the terms of Management Firm’s Proposal. Management Firm shall immediately notify the Port Representative, in writing, of any notices of violations received during or in connection with inspections by any government or regulatory agency. In the event a notice of violation is
- 8 - received, Management Firm shall prepare action plans to correct the conditions causing the violations.
6.5.2 Management Firm shall inspect each Designated Lounge on a weekly basis to ensure clean, safe, and healthy conditions. Management Firm shall notify the Port Representative, in writing, of any condition in the physical elements of the Lounge facilities that may compromise the health or safety of Management Firm’s employees, agents, subcontractors, Pre-Paid Lounge Users or Pay-Per-Use Customers that Management Firm is not able to correct.
6.5.3 Management Firm shall be solely responsible for addressing any issues related to the health or safety of Management Firm’s employees, subcontractors or agents while at work, including but not limited to taking all appropriate and necessary action to respond to any accident or incident involving Management Firm’s employees, subcontractors or agents and assuming all cost and liability associated with such issues.
6.5.4 Management Firm shall immediately notify the Port Representative of any accident or incident in the Lounge premises involving injury (whether to a customer, employee or otherwise) or damage to the premises. Management Firm shall also advise the Port in writing of whatever action Management Firm has taken to immediately respond to such accident or incident.
6.5.5 Management Firm shall comply with all applicable safety and health standards, regulations and laws, including but not limited to food handling and serving requirements of the City of SeaTac, King County and State of Washington. It is Management Firm’s sole responsibility to ensure that its officers, employees and subcontractors comply with current and applicable safety and health standards, regulations and laws.
6.6 Purchase, Storage and Inventory. Management Firm shall purchase, store and inventory food and beverages, including alcoholic beverages, of a quality and quantity appropriate for consumption by Lounge Users. Management Firm shall likewise purchase, store and inventory equipment and supplies necessary to serve food and beverages to Lounge Users and otherwise operate and maintain clean, attractive and safe facilities at Designated Lounges.
6.7 Maintenance of Operating and Business Equipment. Management Firm shall, at all times, be responsible for the repair and maintenance, whether ordinary or extraordinary, of small operating and business equipment (e.g. coffee makers, microwaves, business machines, etc.) utilized in the operation of the Designated Lounges. Likewise, Management Firm shall be responsible to replace any such item that requires replacement.
6.8 Utility Services. Except to the extent provided by the Port, Management Firm shall be responsible for arranging all necessary utility service for the Designated Lounges, specifically including telephone, Internet connectivity and/or television service.
6.9 Vehicle. To the extent necessary for the successful operation of the Designated Lounges, Manager shall supply one or more vehicles for use in connection with its management of the Designated Lounges.
- 9 - 6.10 Procurement. Management Firm shall use its best efforts to procure all food, beverages, supplies and equipment necessary to provide Lounge Services from vendors offering the best value, in terms of highest quality for the lowest price. The Port retains the right to disapprove any vendor or product selected by Management Firm or select vendors for Management Firm from time to time. Management Firm has no authority to bind, nor shall it bind, the Port to any contract it executes without the prior written approval of the Port. All contracts entered into pursuant to this Section, without regard to whether the Port is bound by such contracts, shall contain a provision: (i) that the Port of Seattle is a third-party beneficiary of the agreement, (ii) that all representations, warranties and guarantees are fully assignable to the Port of Seattle, and (iii) that the contract may be assigned to and assumed by the Port of Seattle in the event of termination of this agreement. In addition, all goods acquired pursuant to this Section shall be titled in the name of the Port of Seattle.
6.11 Liquor License. Unless otherwise specifically elected by the Port, Management Firm shall apply for a license to serve and sell alcohol on the premises of the Designated Lounges. Management Firm shall thereafter comply with State alcohol beverage control laws at Title 66 RCW and State Liquor Control Board rules at Title 314 WAC to ensure that the license is maintained. Without limiting the generality of the foregoing statement, Management Firm shall be responsible for obtaining and maintaining alcohol server permits, as well as any necessary agreements with the State Liquor Control Board, and checking the identification of Pre-Paid Lounge Users and Pay-Per-Use Customers. To the extent permitted by law, Management Firm shall also purchase alcohol to be served in Designated Lounges as an agent of the Port and obtain and maintain any necessary permits or agreements with the State Liquor Control Board or other public regulatory or licensing agencies to buy and serve alcohol.
6.12 Tips. Neither Management Firm nor any of its employees (specifically including the On-Site Manager) may accept tips from any Lounge User.
6.13 Events. To the extent consistent with applicable legal requirements (specifically including, but not limited to, liquor licensing regulations), Management Firm shall reasonably cooperate with and host special events in or around the Designated Lounges. Management Firm shall make its On-Site Manager, employees and inventory available for any such event and may pay any costs associated with such event from the Expense Account; provided, however, any direct cost associated with those employees and any food and beverage and other supplies consumed at such event shall not be considered Operating Expenses for purposes of any calculation of the Incentive Management Fee under Section 5.2.
6.14 Personnel.
6.14.1 Management Firm shall hire, train and/or retain, supervise and discipline qualified personnel (specifically including substitute personnel, when required) to perform the services for which Management Firm is responsible under this Agreement. Such personnel may be subcontractors or employees of Management Firm.
6.14.2 Management Firm shall require personnel to dress in uniforms when performing work assignments. Not less than thirty days before the commencement of the term, Management Firm shall submit samples of proposed uniforms and proposed name badges to the
- 10 - Port for approval prior to the opening of the first Designated Lounge. Name badges will be used only if the Port approves their use and will be used only as directed by the Port.
6.14.3 Management Firm shall require its personnel during work hours to use only those entrances and exits designated by the Port Representative for their use. The Port Representative will designate these entrances and exits in consultation with building management. Management Firm shall restrict its personnel to assigned areas during work hours unless the Port expressly agrees to other areas.
6.14.4 Management Firm shall train personnel to comply with all Washington State alcohol beverage control laws and Liquor Control Board regulations as well as all applicable public health and safety laws, regulations and standards.
6.15 Annual Plan.
6.15.1 Management Firm shall prepare an Annual Plan for each calendar year of this Agreement. For the first (partial) calendar year of this Agreement, a draft of the Annual Plan shall be submitted no later than forty five (45) days prior to the commencement of the term. For each calendar year thereafter, the draft shall be submitted no later than July 15 of the prior calendar year.
6.15.2 For the development of the Annual Plan, Management Firm shall consider the following information to the extent such information is available: (i) number of Designated Lounges to be operated during the calendar year; (ii) menus of goods and services to be provided at each Designated Lounge to be operated during the calendar year; (iii) number of airlines and other businesses under contract to provide Pre-Paid Lounge Users; (iv) airline schedules, (v) estimated number of Pre-Paid Lounge Users expected to be served; (vi) estimated capacity of each Designated Lounge; (vii) estimated number of Pay-Per-Use Customers. The Port shall reasonably cooperate with Management Firm in developing these estimates.
6.15.3 The Annual Plan shall include reasonable details regarding time and money to be spent on operations, as well as estimates of Operating Expenses. The proposed expenditures for the calendar year shall be summarized in a Summary page.
6.15.4 After the Port receives the draft Annual Plan from Management Firm, the Port will meet as soon as reasonably possible with Management Firm to discuss the Annual Plan. Following such meeting, the Port will advise Management Firm in writing whether the Port accepts or rejects the Annual Operating Budget. If the Port chooses to reject it, the Port will provide specific reasons for the rejection. Management Firm shall then submit an amended Annual Plan that addresses the Port’s concerns. When the Annual Plan is approved, Management Firm is authorized to incur the expenditures and implement the provisions of the Annual Plan. Management Firm shall not expend more than the Operating Expenses described in the Summary Page without the Port’s prior written approval. Management Firm shall not exceed spending for any line item on the Summary Page by more than 15 percent without the Port’s prior written approval.
6.15.5 The Port shall have the right to require Management Firm to prepare a revised Annual Plan if, at any point after approval of the Annual Plan, the Port identifies any - 11 - substantial impact to the operations of the Designated Lounges, specifically including (but not limited to) the inclusion of an additional Designated Lounge pursuant to Section 4.2, a material change in the estimated number of Pre-Paid Lounge Users, or a change in the Port’s policy related to Pay-Per-Use Customers. Management Firm shall promptly comply with any such request, including any necessary revisions as may be requested by the Port following a process similar to that outlined in Section 6.15.4.
6.15.6 Management Firm must consult with the Port promptly if total Operating Expenses for any three-month period exceed the Annual Plan for that same period by more than 10 percent.
6.16 Accounting Records; Audits.
6.16.1 Management Firm shall maintain books, ledgers, records, documents or other evidence relating to the costs and/or performance of the Agreement (“Records”) in accordance with Generally Accepted Accounting Principles (GAAP) as prescribed by the Financial Accounting Standards Board (FASB) and to such extent and in such detail as will properly reflect and fully support all fees, costs and charges.
6.16.2 With regard to the Records, Management Firm shall do and require its employees, agent and subcontractors, and subconsultants to do the following:
6.16.2.1 Make such records open to inspection or audit by representatives of the Port during the term of this Agreement and for a period of not less than three years after the expiration of this Agreement.
6.16.2.2 Retain such records for a period of no less than three years after the expiration of this Agreement; provided, however, if any litigation, claim, or audit arising out of, in connection with, or related to this Agreement is initiated, such records shall be retained until the later of (a) resolution or completion of litigation, claim or audit; or (b) six years after the date of termination of this Agreement.
6.16.2.3 Provide adequate facilities reasonably acceptable to representatives of the Port conducting the audit so that such representatives can perform the audit during normal business hours.
6.16.2.4 Make a good faith effort to cooperate with representatives of the Port conducting the audit. Cooperation shall include assistance as may be reasonably required in the course of inspection or audit, including access to personnel with knowledge of the contents or the records being inspected or audited so that the information in the records is properly understood by the persons performing the inspection or audit. Cooperation shall also include establishing a specific mutually agreeable timetable for making the records available for inspection by the Port’s representatives. If Management Firm cannot make at least some of the relevant records available for inspection within seven (7) days of the Port’s written request, cooperation will necessarily entail providing the Port with a reasonable explanation for the delay in production of records.
- 12 - 6.16.2.5 In connection with (and at the same time as) the Monthly Operating Statements provided by Management Firm pursuant to Section 6.17, Management Firm shall provide a check detail for the previous month’s activities. The Port will review documents and conduct a spot check on Management Firm’s use of the Expense Account by selecting checks issued by Management Firm. Items reviewed by the Port will represent at least fifteen (15) percent of the number of checks issued and fifteen percent of the total dollar expenditure. Management Firm shall produce to the Port’s satisfaction backup documentation to prove that the expenses were consistent with the Port’s objectives for the lounge.
6.16.3 Management Firm shall utilize the financial accounts established by the Port in the operation of the Designated Lounges as more specifically set forth in SECTION 8 of this Agreement.
6.17 Monthly Operating Statements. Management Firm shall provide to the Port monthly operating statements no later than fifteen (15) days following the end of each calendar month. Each operating statement shall consist of three parts and be provided on both a Designated Lounge-by-Designated Lounge and consolidated basis. The first part shall provide details regarding the number of Pre-Paid Lounge Users and/or Pay-Per-Use Customers for each Designated Lounge during the previous calendar month and clearly indicate which Pre-Paid Lounge Users should be billed to which airline or other business sponsoring such Pre-Paid Lounge Users. The second part shall provide a breakdown of all Operating Expenses and expenditures from the Expense Account incurred during the previous calendar month. The third part shall provide a narrative detailing significant activities and ongoing projects during the previous calendar month and highlight opportunities for improvement of services. Port may specify changes to format and/or content of operating statements from time to time and will advise Management Firm of such changes.
6.18 Invoicing. The Management Firm shall assist the Port with invoicing airlines and other sponsors of Pre-Paid Lounge Users and following up on collections. Management Firm shall be responsible for management of the performance of administrative tasks related to invoicing airline customers on a monthly basis. In the event of late payments by customers, Management Firm shall be responsible for following up through issuance of initial notices and second notices to customers of late payments. In the monthly operating statement provided by Management Firm to the Port, Management Firm shall report on invoicing of airline customers and issuance of initial and second notices to customers of any late payments. Management Firm shall timely notify the Port of payments from airline customers that have become thirty (30) or more days overdue so that the Port can take over the collection process.
6.19 Rebates. Management Firm agrees that all Rebates related to or arising (in whole or in part) out of operations on or about the Designated Lounges or any activities undertaken by Management Firm in connection with its management of the Designated Lounges shall, unless otherwise credited against the purchase price of additional goods and/or services, be promptly disclosed to the Port and deposited by Management Firm in the Revenue Account with appropriate designation. This obligation with respect to Rebates applies without regard to whether the Rebate is extended directly to Management Firm or any Affiliate or Qualified Person. To the extent related to, arising out of, or otherwise in any manner attributable to operations on or about the Designated Lounges or any activities undertaken by Management
- 13 - Firm in connection with its management of the Designated Lounges, any Rebate shall be disclosed and credited under this Agreement.
6.20 Non-Financial Audits and Inspections. In addition to audits of financial records, Management Firm shall be subject to periodic, unannounced operating audits of facilities by representatives of the Port and/or by consultants retained by the Port. Such audits may include a comprehensive review of:
6.20.1 Service quality, attentiveness, courtesy and professionalism of personnel;
6.20.2 Food quality and presentation;
6.20.3 Hygiene and sanitary practices of personnel;
6.20.4 Uniforms worn by personnel;
6.20.5 Training programs, techniques;
6.20.6 Safety, security and cleanliness of facilities; and
6.20.7 Compliance with State alcohol beverage control laws and Liquor Control Board rules
6.21 Compliance with Laws and Port Regulations. Management Firm shall comply with all applicable federal, state, and local laws, ordinances, and regulations in the operation of the Designated Lounges, including those relating to environmental matters. Management Firm must also comply with all present and future rules and regulations adopted by the Port pertaining to the Seattle-Tacoma International Airport, of which the Designated Lounges are a part, which rules and regulations are applied to all users on a nondiscriminatory basis. Nothing in this Section, however, shall require Management Firm to adhere to any internal policies that the Port may adopt related to hiring and/or procurement. So long as Management Firm complies with those requirements imposed by law (in whatever manner Management Firm deems most efficient and effective), Management Firm shall not be required to adhere to any internal Port requirements.
SECTION 7: SPECIFIC PORT RESPONSIBILITIES
7.1 Port Representative. The Port shall, no later than thirty (30) days before the commencement of the term, name a Port Representative for the purposes of providing the Management Firm with a primary point of contact for communications relating to performance under the Agreement. The Port shall provide Management Firm with the Port Representative’s contact information.
7.2 Payment of Operating Expenses; Establish Financial Accounts. The Port shall be responsible to pay all Operating Expenses of the Designated Lounges. The Port shall establish and maintain the financial accounts for use by Management Firm in the operation of the Designated Lounges as more specifically set forth in SECTION 8 of this Agreement.
7.3 Lounge Users.
- 14 -
7.3.1 Pre-Paid Lounge Users. The Port shall, as it in its sole discretion elects, contract with airlines and other business to secure Pre-Paid Lounge Users. The Port will contract with each such airline and other business to provide lounge services at a flat, per-person rate for each Pre-Paid Lounge User. The specified passengers, customers and employees will be designated by, among other things, class of service and/or position. The Port shall regularly provide Management Firm with a list of criteria by which to identify Pre-Paid Lounge Users.
7.3.2 Pay-Per-Use Customers. The Port shall, in its sole discretion, determine whether, and under what terms, to allow Pay-Per-Use Customers. This election may be made on a Designated Lounge-by-Designated Lounge and period-by-period basis. The Port shall provide Management Firm with a list of criteria (if any) by which to identify eligible Pay-Per-Use Customers and the appropriate per-use charge.
7.4 Office and Storage Space. Port shall provide to Management Firm adequate space, without charge, for storage of food, beverages, supplies and equipment necessary for the performance of this Management Agreement. Port shall provide to Management Firm space, without charge, for Management Firm’s full-time manager and other personnel to perform tasks related to this Management Agreement including, but not limited to, record-keeping, accounting, preparation of Annual Plan, Operating Statements and other reports to the Port, procurement, and communications with the Port. The location of the space shall be determined by the Port in its sole discretion.
7.5 Repair and Maintenance. Except with respect to those items of small operating and business equipment for which Management Firm is responsible under Section 6.7, the Port shall, at its sole cost and expense, be responsible for the repair and maintenance of the Designated Lounges. Without limiting the generality of the foregoing, this includes the roof, foundations, structural components, and interior and exterior walls, doors and windows. It also includes the fire suppression system, HVAC system, security system and any other building system within the Designated Lounges.
7.6 Utility Services. The Port shall, at its sole cost and expense, provide electricity, HVAC, lighting, water, and sewer service to the Designated Lounges. The Port shall, at its sole cost and expense, likewise provide free WiFi service to the Designated Lounges, which service may specifically be provided through the general Airport WiFi service. The Port shall provide all such services in a reasonable quantity given the intended use of the Designated Lounges. If Management Firm fails to take reasonable measures to manage the consumption of any particular utility or, as a result of unusual demand, imposes an undue burden on the system, the Port reserves the right to institute a specific charge therefor.
7.7 Janitorial Services. The Port shall, at its sole cost and expense, provide for, or arrange for the necessary provision of, all necessary janitorial services within the Designated Lounges. While Management Firm is expected to provide table service, clean up small spills and messes, and keep the Designated Lounges neat and tidy, the Port responsible for the janitorial service. Additionally, the Port shall, at its cost, provide pest management services for the Designated Lounges pursuant to its Consolidated Pest Management Program.
- 15 - 7.8 No Guarantee. The Port does not guarantee any particular number of Lounge Users or level of business and does not warrant the continued operation of any Designated Lounges.
SECTION 8: FINANCIAL ACCOUNTS
8.1 Purpose. The Port is a municipal entity organized under Washington law and, as a result, is subject to certain special requirements related to the handling of public funds. The following requirements are established to ensure that the Port and Management Firm comply with those requirements, specifically including Chapter 43.09 of the Revised Code of Washington, and the Port may, from time-to-time, issue such other and further written direction to Management Firm regarding the handling of public funds to ensure the Port and Management Firm comply with all applicable legal requirements.
8.2 Revenue Account. The Port shall establish, and Management Firm shall utilize, an account (the “Revenue Account”) for use in connection with the deposit of Gross Revenues and other receipts associated with the operation of the Designated Lounges.
8.2.1 Specific Port Responsibilities. The Port’s establishment of the Revenue Account shall be subject to the following rights and responsibilities:
8.2.1.1 The Revenue Account shall be maintained with a financial institution as the Port may, from time-to-time, elect.
8.2.1.2 Only the Port shall have authority to make withdrawals or disbursements from the Revenue Account. Only the Port shall have the right to invest amounts on deposit in the Revenue Account. Management Firm shall not have any authority to make withdrawals, disbursements or investments from the Revenue Account.
8.2.1.3 The Port shall provide to Management Firm such other materials and services as may reasonably be necessary for Management Firm to make effective use of the Revenue Account, specifically including, but not limited to, deposit slips, credit card processing equipment, electronic image processing (Check 21 Processing) and services, and duplicate account statements.
8.2.1.4 Excepting only credit card processing fees and bank charges associated with insufficient funds or other dishonored instruments, all costs associated with the Revenue Account and the associated materials and services provided by the Port shall be paid by the Port and shall not be Operating Expenses.
8.2.2 Specific Management Firm Responsibilities. Management Firm’s use of the Revenue Account shall be subject to the following requirements:
8.2.2.1 All funds associated with the operation of the Designated Lounges and received by Management Firm shall be deposited promptly in the Revenue Account. RCW 43.09.240 requires all public money be deposited within 24 hours of receipt.
- 16 - 8.2.2.2 Management Firm shall have no authority to make withdrawals, disbursements, or investments from the Revenue Account.
8.2.2.3 Management Firm shall, unless otherwise agreed by the Port, make use of any materials and/or services provided by the Port in connection with the Revenue Account.
8.2.2.4 Management Firm shall be responsible for reconciling the Revenue Account and providing the Port a monthly statement, in a form reasonably specified by the Port, detailing the nature of the funds deposited into the Revenue Account.
8.2.2.5 To the extent not inconsistent with the terms of the Agreement, Management Firm shall otherwise comply with the Port’s reasonable instructions regarding the receipts of cash, deposits and other internal control and reporting procedures associated with the Revenue Account.
8.3 Revolving Fund for Payment of Expenses. The Port shall establish and fund, and Management Firm shall utilize, a revolving expense account (the “Expense Account ”) for use in connection with the payment of Operating Expenses associated with the operation of the Designated Lounges.
8.3.1 Specific Port Responsibilities. The Port’s establishment of the Expense Account shall be subject to the following rights and responsibilities:
8.3.1.1 The amount of the Expense Account for each calendar year shall be equal to the sum of twenty thousand dollars ($20,000.00) plus the amount of budgeted expenses set forth in the approved Annual Plan for the Designated Lounges for the two highest months for that calendar year.
8.3.1.2 The Expense Account shall be maintained with a financial institution as the Port may, from time-to-time, elect.
8.3.1.3 To the extent that there are any unused or idle funds in the Expense Account, the Port shall have the right (but not the obligation) to invest such amounts as it may, in its sole discretion, elect; provided that such investment does not limit Management Firm’s right to make use of the Expense Account in the manner intended.
8.3.1.4 The Port shall, within ten (10) working days of any request by Management Firm’s for replenishment of the Expense Account, replenish the Expense Account.
8.3.1.5 In connection with Management Firm’s use of the Expense Account, the Port shall also provide to Management Firm such other materials and services as may reasonably be necessary for Management Firm to make effective use of the Expense Account, specifically including, but not limited to, checks, on-line account access, and duplicate account statements.
- 17 - 8.3.1.6 All costs associated with the Expense Account and the associated materials and services provided by the Port shall be paid by the Port and shall not be Operating Expenses.
8.3.2 Specific Management Firm Responsibilities. Management Firm’s use of the Expense Account shall be subject to the following requirements:
8.3.2.1 Management Firm shall make payment of all Operating Expenses related to the operation of the Designated Lounges from the Expense Account.
8.3.2.2 The only persons authorized to make disbursements from the Expense Account shall (in addition to any Port employees designated by the Port) be those Management Firm officers or employees designated by Management Firm and approved by the Port, all as reflected by schedule on file with the Port. All officers and employees authorized to make disbursements shall, notwithstanding any other term of the Agreement, be bonded for the full amount of the Expense Account.
8.3.2.3 Management Firm shall have no responsibility or authority to invest any idle funds remaining in the Expense Account.
8.3.2.4 Management Firm shall, unless otherwise agreed by the Port, make use of any materials and/or services provided by the Port in connection with the Expense Account.
8.3.2.5 Management Firm shall, not less frequently than once each calendar month, seek replenishment of the Expense Account. Management Firm shall request replenishment through use of a form reasonably approved by the Port, and all requests for replenishment shall be accompanied by such documentation as the Port reasonably requests, Management Firm shall also be responsible for reconciling the Expense Account on a monthly basis.
8.3.2.6 In the event that Management Firm uses the Expense Account to create any petty cash or change fund, Management Firm shall specifically notify the Port in writing of this use and adhere to Port policy in connection with any such cash or change fund.
8.3.2.7 To the extent not inconsistent with the terms of the Agreement or this Amendment, Management Firm shall otherwise comply with the Port’s reasonable instructions regarding the disbursements and other internal control and reporting procedures associated with the Expense Account.
8.3.2.8 Management Firm shall promptly remit to the Port any amounts remaining in the Expense Account on the expiration or earlier termination of the Agreement.
SECTION 9: NAMES AND LICENSE FOR MARKS
9.1 Name of Designated Lounges. The Designated Lounges shall generally be operated under the Port Marks and such other and further names as may be agreed by the Port. The name of Designated Lounges may not be changed without the consent of the Port. - 18 -
9.2 Grant. Subject to all of the terms and conditions of this Agreement, the Port hereby grants to Licensee a non-exclusive, royalty free, license to use the Port Marks in conjunction with the operation of the Designated Lounges. Management Firm shall not use the Port Marks in any manner inconsistent with the terms and conditions of this Agreement.
9.3 Appearance. Management Firm agrees that all depictions of the Port Marks will not vary in any way from the appearance of the Port Marks provided by the Port except that the colors and absolute dimensions of the Port Marks may be changed as needed. All uses of the Port Marks shall, as appropriate, include the symbol ® or ™ in close proximity to the Port Marks.
9.4 Ownership. The Port is the owner of the Port Marks and other names as the Designated Lounges may be operated under. Management Firm acknowledges the Port’s right, title, and interest in and to the Port Marks and shall not at any time do or cause to be done any act contesting or in any way impairing or intending to impair any part of such right, title, or interest. Licensee shall not in any manner represent that it has any ownership in the Port Marks and agrees and acknowledges that all use of the Port Marks by Management Firm shall inure to the benefit of the Port.
SECTION 10: INDEMNITY AND INSURANCE
10.1 Indemnity. To the maximum extent permitted by law, Management Firm shall indemnify, defend (with counsel reasonably acceptable to the Port) and save harmless the Port, the commissioners, representatives, directors, officers, agents and employees of the Port, and those in privity of estate with the Port, from and against all claims, expenses (including, without limitation, attorney’s fees) or liability of whatever nature arising from any default, act, omission or negligence of Management Firm, or Management Firm’s subcontractors, licensees, agents, servants or employees, or the failure of Management Firm or such persons to comply with any rule, order, regulation or lawful direction now or hereafter in force of any public authority, in each case to the extent the same are related, directly or indirectly, to Management Firm’s performance under this Management Agreement; provided, however, nothing in this Section shall require Management Firm to indemnify the Port from injury or damage caused by the sole negligence of the Port. This indemnity and hold harmless agreement shall include indemnity against all costs, expenses (including, without limitation, reasonable attorneys’ fees) and liabilities incurred in or in connection with any such claim, or any action or proceeding brought thereon.
10.2 Required Insurance Policies. Management Firm shall obtain and keep in force the insurance specifically set forth on Exhibit C. For purposes of this Section and its referenced exhibit only, Management Firm is referred to as “Consultant.”
SECTION 11: TERMINATION
11.1 For Convenience. The Port may terminate this Agreement at any time and for any reason by written notice delivered or mailed to Management Firm not less than ninety (90) days before the termination date specified in the notice.
- 19 - 11.2 Default by Management Firm. If Management Firm fails to perform any obligation under this Agreement and such failure is not cured within 30 days after written notice from the Port (20 days in the event of a failure to pay money), then Management Firm will be in default. Upon such default, the Port may terminate this Agreement and may exercise any other remedy at law or in equity. Notwithstanding the cure period provided in this Section 11.2, in the event that Management Firm fails to perform any obligation related to health and/or safety (specifically including, but not limited to, the obligations in Section 6.5.5), the following additional rights shall apply:
11.2.1 In the event that the failure is so serious that it results in a food establishment closure order by Seattle & King County Public Health (or other governmental agency subsequently having jurisdiction over food handling at the Designated Lounges), the Port shall have the right to immediately terminate this Agreement by written notice to Management Firm; OR
11.2.2 In the event that Management Firm fails to perform such obligations two (2) or more times in any two-year period, the Port shall – upon the second or any subsequent violation in the two-year period – have the right to immediately terminate this Agreement by written notice to Management Firm without further opportunity to cure.
11.3 Annual Plan; Termination. Management Firm must consult with the Port promptly if total Operating Expenses for any three-month period exceed the Annual Plan by more than ten percent (10%). The Port may, at its option, terminate this Agreement if the Net Operating Income is either: (i) without regard to the cause, negative for three consecutive monthly periods, or (ii) lower than the Annual Plan by more than twenty percent (20%) for two consecutive calendar quarters unless such deficit is due to circumstances beyond the control of Management Firm, including, but not limited to, damage to the Designated Lounges, alterations and improvements by the Port, and strikes.
SECTION 12: ASSIGNMENT
12.1 Prohibition. This Agreement may not be assigned, mortgaged, pledged or otherwise transferred (for convenience in this Section, “assigned” or an “assignment”) by Management Firm without the prior written consent of the Port, which may be granted or withheld in the Port’s sole discretion. The prohibition against assignment contained in this Section shall specifically be construed to include a prohibition against any assignment by operation of law. Furthermore, for purposes of this Section, any sale, transfer or other disposition in the aggregate of fifty percent (50%) or more of the equity ownership in Management Firm (i.e. stock with respect to corporation, partnership interests with respect to a partnership, etc.) shall be deemed an assignment. Any purported assignment contrary to the provisions hereof without consent shall be void. The consent by the Port to any assignment shall not constitute a waiver of the necessity for such consent to any subsequent assignment.
SECTION 13: MISCELLANEOUS
13.1 Notice. All notices hereunder shall be in writing and shall be delivered: (i) personally, (ii) by certified or registered mail, (iii) by recognized overnight courier addressed, or (iv) email, with telephonic confirmation of receipt:
- 20 -
To the Port:
Mailing Address: Street Address: Port of Seattle Port of Seattle Attention: Manager, AV Business Attention: Manager, AV Business Development & Analysis Development & Analysis P. O. Box 68727 17801 Pacific Highway South Seattle, WA 98168 Seattle, WA 98158
Email:[email protected] Phone: 206.787.7935
To Management Firm:
Email: Phone:
or to such other address as either party may designate in writing from time-to-time. Notices shall be deemed delivered (i) when personally delivered; (ii) on the third day after mailing when sent by certified or registered mail and the postmark affixed by the United States Postal Service shall be conclusive evidence of the date of mailing; (iii) on the first business day after deposit with a recognized overnight courier if deposited in time to permit overnight delivery by such courier as determined by its posted cutoff times for receipt of items for overnight delivery to the recipient, or (iv) on the date the email is received, as determined by the date on which receipt is telephonically confirmed.
13.2 Time. Time is of the essence in the performance of the provisions of this Agreement.
13.3 Nondiscrimination. This Agreement is subject to the requirements of Title VI of the Civil Rights Act of 1964 and the U.S. Department of Transportation’s regulations, 49 CFR Part 21. Management Firm agrees that it will not discriminate against any business owner because of the owner’s race, color, national origin, or sex in connection with the award or performance of any concession agreement, management contract, subcontract, purchase or lease agreement or other agreement covered by 49 CFR part 21. Furthermore, during the performance of this Agreement, Management Firm, for itself, its assignees, and successors in interest (for purposes of this Section and its referenced exhibits only, “contractor”) agrees to both (i) comply with the covenants set forth on Exhibit D and (ii) comply with the non-discrimination statutes and authorities set forth on Exhibit E.
13.4 ACDBEs.
13.4.1 It is the policy of the Port to support participation of Airport Concession Disadvantaged Business Enterprises (ACDBEs), as defined in 49 CFR Part 23, in concession - 21 - activities related to the Airport. This Agreement is a “management contract” within the meaning of 49 CFR Sec. 23.3 and is thus a concession subject to the requirements of 49 CFR, Part 23.
13.4.2 If Management Firm identified itself as a DBE in its response to the Request for Proposal or during negotiation of this Agreement, Management Firm agrees to submit to the Port, upon execution of this Agreement, certification from the State of Washington that Lessee is a certified DBE.
13.4.3 It is the policy of the Port to ensure that Disadvantaged Business Enterprises (DBEs) as defined by federal regulations at 49 CFR Part 23, and other small businesses that meet the U.S. Small Business Association size standard have an equal opportunity to receive and participate in DOT-assisted contracts. The Port encourages Management Firm to make every reasonable effort to maximize the contracting opportunities for DBEs and other small businesses in the procurement of goods and services necessary for the operation of the Designated Lounges at the Airport.
13.4.4 Management Firm shall not be penalized in the event that Management Firm fails to offer contracting opportunities to DBEs or fails to otherwise obtain their participation in the operation of Lounge Services; provided, however, Management Firm shall submit such reports as may be required by the Port, for the purpose of demonstrating compliance with 49 CFR Part 23 and shall comply with the nondiscrimination and assurance requirements of 49 CFR Part 23 as set forth in Section 13.3.
13.5 Equal Benefits. Management Firm certifies that it does not, and will not, discriminate in providing employee benefits and that such benefits are made available on an equal basis to all of its non-union and union employees with spouses and its employees with a domestic partner OR legally domiciled member of household (same-sex and opposite-sex), and agrees to furnish a completed Compliance with Equal Benefits form. The completed Compliance with Equal Benefits form shall be furnished before the execution of this Agreement.
13.6 No Adverse Interest. Management Firm covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of services required to be performed under this Agreement. Management Firm further covenants that in the performance of this Agreement, no person having any such interest shall be employed.
13.7 Port Ethics Policy. Management Firm has read and agrees to be bound by the Port’s Consultant Ethics and Conflict of Interest policy, CC-2, as the same may be revised or replaced from time to time. A current copy of the policy is attached hereto as Exhibit F.
13.8 Captions. The captions in this Agreement are for convenience only and do not in any way limit or amplify the provisions of this Agreement.
13.9 Governing Law; Venue. This Agreement shall be construed under the laws of Washington without regard to its choice of law principles. Exclusive jurisdiction and venue for any action relating hereto shall be in the state or federal courts located in King County, Washington.
- 22 - 13.10 Liens. Management Firm shall keep the Designated Lounges free and clear of any liens and encumbrances arising out of the use of the Designated Lounges.
13.11 Attorneys’ Fees. In the event that either party shall be required to bring any action to enforce any of the provisions of this Agreement, or shall be required to defend any action brought by the other party with respect to this Agreement, and in the further event that one party shall substantially prevail in such action, the losing party shall, in addition to all other payments required therein, pay all of the prevailing party’s actual costs in connection with such action, including reasonable attorneys’ fees and any costs of litigation.
13.12 Invalidity of Particular Provisions. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or enforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and shall continue in full force and effect.
13.13 Survival of Indemnities. All indemnities provided in this Agreement shall survive the expiration or any earlier termination of this Agreement. In any litigation or proceeding within the scope of any indemnity provided in this Agreement, Management Firm shall, at the Port's option, defend the Port at Management Firm's expense by counsel satisfactory to the Port.
13.14 Entire Agreement; Amendments. This Agreement, together with any and all exhibits attached hereto, shall constitute the whole agreement between the parties. There are no terms, obligations, covenants or conditions other than those contained herein. No modification or amendment of this agreement shall be valid or effective unless evidenced by an agreement in writing signed by both parties.
13.15 Exhibits. Exhibits A, B, C, D, E, and F are attached to this Agreement after the signatures and by this reference incorporated herein.
SECTION 14: SIGNATURES
IN WITNESS WHEREOF the parties hereto have signed this Agreement as of the day and year first above written.
PORT OF SEATTLE
By: By: Its: Its:
- 23 -
EXHIBIT A
– Initial Designated Lounges –
- 1 - EXHIBIT B
– Initial Approved Menu –
- 1 - EXHIBIT C
– Insurance Requirements –
A. Prior to commencement of services under this Agreement and if required below, CONSULTANT shall procure and maintain one or more lines of insurance coverage to be kept in force for the life of this Agreement. If required, insurance shall be procured from insurance carriers including captives, with a current A.M. Best’s rating of no less than ”A Minus V”. Captives who are not rated by A.M. Best shall provide evidence of equivalent solvency that is acceptable to the PORT. CONSULTANT shall submit to the PORT a Certificate of Insurance which shows that it has obtained the required coverage(s). Coverage shall not lapse or be terminated without written notification to the PORT, delivered electronically or by mail, not less than thirty (30) days prior to any such lapse or termination. CONSULTANT agrees to notify the PORT upon any material change of coverage or reduction in limits. Where identified below, CONSULTANT shall submit endorsements with the Certificate of Insurance. CONSULTANT shall provide evidence of insurance on each insurance renewal date, throughout the duration of the Agreement. When insurance is required, CONSULTANT shall procure and maintain insurance in the following minimum form and limits. The limits shall not be construed as to relieve the CONSULTANT from liability in excess of the limits. The minimum limits indicated below do not indicate that the PORT has assessed the risks that may be applicable to the CONSULTANT under this Agreement. All deductibles or self-insurance retentions are the responsibility of the CONSULTANT. CONSULTANT may meet required insurance limits through a combination of primary and umbrella or excess insurance. Any insurance the PORT may carry will apply strictly on an excess basis over any applicable insurance the CONSULTANT may carry. The CONSULTANT shall provide to the PORT, if requested, a copy of any insurance policy required under this Agreement, including a copy of the policy declarations, binder, all endorsements, and any policy amendments. 1. Commercial General Liability insurance on ISO Form CG 00 01 10 01 (or equivalent) for third party property damage, bodily injury, personal and advertising injury, and medical payments in an amount which is not less than $2,000,000 per occurrence and $2,000,000 annual aggregate. The insurance shall cover liability arising from premises, operations, independent contractors, products completed operations, personal and advertising injury, and liability assumed under an insured Agreement. The CONSULTANT’S insurance shall be primary and non-contributory with respect to any insurance the PORT carries and apply separately to each insured. This Agreement Does Does not require commercial general liability insurance. a) PORT shall be named as an additional insured for all work arising out of CONSULTANT’S work using ISO Form CG 20 26 or an equivalent endorsement approved by the PORT.
- 1 - b) When a self-insured retention (SIR) or deductible exceeds $25,000 the PORT reserves the right, but not the obligation, to review and request a copy of the CONSULTANTS most recent annual report or audited financial statement. c) If the services to be provided in this Agreement include the installation or construction of a product on PORT property, the CONSULTANT shall be required to add the PORT as an additional insured with respect to “completed operations” using ISO Form CG 20 26 11 85 or equivalent. This Agreement Does Does not require an endorsement to add the PORT as an additional insured for completed operations. 2. Automobile Liability Insurance: Agreements in which the CONSULTANT, will utilize one or more vehicles to complete the scope of work may require evidence of automobile liability insurance. This Agreement Does Does not require automobile liability insurance. When automobile liability insurance is required, it shall be provided on a combined single limit basis for bodily injury and property damage using ISO Form CA 00 01 (or equivalent). Coverage is to be extended to all “owned, non-owned, hired, leased, and borrowed automobiles” (as defined on ISO Form CA 00 01). Sole proprietors may provide coverage on a Personal Auto Policy in lieu of a Commercial Auto coverage form. The box or boxes marked below indicate the type of coverage and limit needed; more than one box may be checked. a) The limit of insurance shall be not less than $1 million per occurrence for all driving on PORT Terminals, 5, 10, 18, 25, 30, 46, 47, 86, 90, 91, 104, and 115; b) The limit of insurance shall be not less than $5 million per occurrence for all driving on the non-movement area of the airfield operations area at Seattle-Tacoma International Airport; c) The limit of insurance shall be not less than $10 million per occurrence for all driving on the movement area of the airfield operations area at Seattle-Tacoma International Airport; d) The limit of insurance shall be not less than $300,000 per occurrence e) The limit of insurance shall be not less than $500,000 per occurrence for any individual or entity that is to use a PORT Vehicle. 3. Professional Liability Insurance (also referred to as Errors and Omissions). Agreements requiring professional services such as, but not limited to: engineering design or surveying, architectural services, software services, information technology services, environmental services, real estate management, legal services, or financial advisory services, may require Professional Liability insurance coverage. This Agreement Does Does not require Professional Liability insurance coverage. If required, CONSULTANT shall provide Professional Liability (E&O) insurance in an amount not less than $1,000,000 per claim or wrongful act and $2,000,000 in the policy aggregate on a practice policy to cover the CONSULTANT and its employees. CONSULTANT may choose to provide a project specific policy, in lieu of a practice
- 2 - policy, in which case the insurance shall be in an amount not less than $NA per claim or wrongful act and in the policy aggregate. Subconsultants retained by CONSULTANT who are performing professional services, shall either be added onto the policy of the CONSULTANT, or, subconsultant shall provide and obtain a similar policy of Professional Liability insurance coverage that covers the Subconsultant and its employees. When a self-insured retention (SIR) or deductible exceeds $25,000, the PORT reserves the right, but not the obligation, to review and request a copy of the CONSULTANT’S most recent annual report or audited financial statement. If coverage is to be provided on a claims-made basis, the CONSULTANT shall warrant that any policy retroactive date precedes the effective date of this Agreement. In addition, continuous coverage must be maintained throughout the Agreement and for one year beyond the completion of the Agreement, or the CONSULTANT shall purchase an extended discovery period policy for not less than one year from the completion of work. 4. Employers Liability Insurance (Washington Stop Gap Liability). If CONSULTANT is providing services that include the installation or construction of a product on PORT property, the CONSULTANT shall be required to provide Washington State Stop Gap employers’ liability insurance. This shall be in an amount of $ 1 million per accident and $1 million per disease using ISO CG 04 42 11 03 or equivalent. This coverage may be provided by endorsing the primary commercial general liability policy. This Agreement Does Does not require stop gap employers liability insurance. 5. Certain Agreements may require specialized insurance or specialized policy endorsements to cover the unique aspects of the Scope of Work. This may result in a requirement for the CONSULTANT to provide specialized insurance or a specialized policy endorsement to cover employee dishonesty liability, aircraft liability, pollution liability (including lead, asbestos, and mold), watercraft liability, network security/cyber liability, liquor liability, special event liability or other liability associated with the work to be performed. If the box below is checked, then specialized insurance coverage or a specialized endorsement is to be provided, in accordance with the following additional requirements: a) Crime/Fidelity Insurance. Contractor shall have an employee dishonesty, forgery, computer fraud, and extortion policy. Coverage shall be on an ISO CR DS 10 07 02 form, or equivalent, or an equivalent Fidelity Bond. The amount of coverage shall not be less than $2,000,000 per occurrence. b) The commercial general liability policy shall be endorsed to provide coverage for liquour liability – in the amount of $1,000,000 per occurrence relative to property damage and bodiliy injured due to the operations and oversight of the Contractor. This Agreement Does Does not require specialized insurance coverage, or a specialized policy endorsement. B. CONSULTANT is responsible for complying with the Washington State laws that pertain to industrial insurance (Reference Revised Code of Washington, Title 51 Industrial Insurance) for CONSULTANT, its employees, and subconsultants. CONSULTANT shall submit a current employer liability certificate as issued by the Washington Department of Labor and Industries that shows the status of CONSULTANT’S worker compensation account prior to - 3 - commencing work, including those CONSULTANTS who are qualified self-insurers with the state. CONSULTANT bears the responsibility to ensure that any out-of-state (non- Washington) employees and subconsultants have appropriate workers compensation coverage while working for the PORT in Washington State. CONSULTANT may be exempt from state worker compensation insurance requirements (Reference RCW 51.12.020) such as if CONSULTANT is a sole proprietor. CONSULTANT shall indicate its status below by marking the appropriate box. If neither box is checked, CONSULTANT must show evidence of industrial insurance coverage with a current employer liability certificate. CONSULTANT is Is not exempt from state worker compensation and industrial insurance requirements. The PORT reserves the right to recover funds owed to CONSULTANT under this Agreement for any fees the PORT pays to the Washington State Department of Labor and Industries that are the responsibility of the CONSULTANT under RCW 51.12.070. C. Certain work or services under this Agreement may require Longshore and Harbor Worker's Compensation Act (33 U.S.C. §§901 et seq.) insurance coverage, coverage to comply with the Federal Employers Liability Act, or Jones Act coverage. Failure to obtain coverage, in the amount required by law, may result in civil and criminal liabilities. CONSULTANT is fully responsible for ascertaining whether or not such insurance is required. If these or any other federally required insurance coverages apply to this Agreement, the CONSULTANT is responsible for obtaining the coverage, and/or meeting any self-insurance requirements to qualify as a self-insurer.
- 4 - EXHIBIT D
– Additional Non-Discrimination Covenants –
1. Compliance with Regulations: The contractor (hereinafter includes consultants) will comply with the Acts and the Regulations relative to Non-discrimination in Federally- assisted programs of the U.S. Department of Transportation, Federal Aviation Administration, as they may be amended from time to time, which are herein incorporated by reference and made a part of this contract. 2. Non-discrimination: The contractor, with regard to the work performed by it during the contract, will not discriminate on the grounds of race, color, or national origin in the selection and retention of subcontractors, including procurements of materials and leases of equipment. The contractor will not participate directly or indirectly in the discrimination prohibited by the Acts and the Regulations, including employment practices when the contract covers any activity, project, or program set forth in Appendix B of 49 CFR part 21. 3. Solicitations for Subcontracts, Including Procurements of Materials and Equipment: In all solicitations, either by competitive bidding, or negotiation made by the contractor for work to be performed under a subcontract, including procurements of materials, or leases of equipment, each potential subcontractor or supplier will be notified by the contractor of the contractor’s obligations under this contract and the Acts and the Regulations relative to Non-discrimination on the grounds of race, color, or national origin. 4. Information and Reports: The contractor will provide all information and reports required by the Acts, the Regulations, and directives issued pursuant thereto and will permit access to its books, records, accounts, other sources of information, and its facilities as may be determined by the Recipient or the Federal Aviation Administration to be pertinent to ascertain compliance with such Acts, Regulations, and instructions. Where any information required of a contractor is in the exclusive possession of another who fails or refuses to furnish the information, the contractor will so certify to the Recipient or the Federal Aviation Administration, as appropriate, and will set forth what efforts it has made to obtain the information. 5. Sanctions for Noncompliance: In the event of a contractor’s noncompliance with the Nondiscrimination provisions of this contract, the Recipient will impose such contract sanctions as it or the Federal Aviation Administration may determine to be appropriate, including, but not limited to: a. withholding payments to the contractor under the contract until the contractor complies; and/or b. cancelling, terminating, or suspending a contract, in whole or in part. 6. Incorporation of Provisions: The contractor will include the provisions of paragraphs one through six in every subcontract, including procurements of materials and leases of equipment, unless exempt by the Acts, the Regulations and directives issued pursuant - 1 - thereto. The contractor will take action with respect to any subcontract or procurement as the Recipient or the Federal Aviation Administration may direct as a means of enforcing such provisions including sanctions for noncompliance. Provided, that if the contractor becomes involved in, or is threatened with litigation by a subcontractor, or supplier because of such direction, the contractor may request the Recipient to enter into any litigation to protect the interests of the Recipient. In addition, the contractor may request the United States to enter into the litigation to protect the interests of the United States.
- 2 - EXHIBIT E
– Pertinent Non-Discrimination Authorities –
• Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin); and 49 CFR part 21. • The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. § 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects); • Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794 et seq.), as amended, (prohibits discrimination on the basis of disability); and 49 CFR part 27; • The Age Discrimination Act of 1975, as amended, (42 U.S.C. § 6101 et seq.), (prohibits discrimination on the basis of age); • Airport and Airway Improvement Act of 1982, (49 USC § 471, Section 47123), as amended, (prohibits discrimination based on race, creed, color, national origin, or sex); • The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the Federal-aid recipients, sub-recipients and contractors, whether such programs or activities are Federally funded or not); • Titles II and III of the Americans with Disabilities Act, which prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 U.S.C. §§ 12131 – 12189) as implemented by Department of Transportation regulations at 49 CFR parts 37 and 38; • The Federal Aviation Administration’s Non-discrimination statute (49 U.S.C. § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex); • Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, which ensures discrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations; • Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. at 74087 to 74100); • Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq).
- 1 - EXHIBIT F
– Port Conflict of Interest Policy for Consultants –
- 1 -
Lounge Management Services RFP 00317808-14 Attachment G Lounge Pro-Formas *available under “Documents” tab of the solicitation on the Port’s PRMS site
Lounge Management Services RFP 00317808-14 Attachment H Port Consultant Ethics Policy CC-2 CONSULTANT ETHICS AND CONFLICT OF INTEREST
Serving the Port With Integrity CC-2 as of 8/16/2011
Original – 1/1/2010 Revisions: 8/16/2011 ______
I. The Port’s Interests Come First
Port of Seattle consultants (“Consultants”) are expected to serve the Port with the highest standards of ethical conduct and to avoid situations that create a real or perceived “conflict of interest.” Consultants are also expected to conserve and responsibly use the resources that the public has entrusted to the Port, to act in accordance with applicable laws and professional standards and to conduct business with the Port in a manner that will reflect positively on the Port, its employees, its consultants, and the community.
For purposes of this policy:
“Consultant” or “Consultants” refers to any organization or individual that responds to a Port solicitation or receives compensation directly or indirectly from a Contract with the Port. The term “Consultant” or “Consultants” includes individuals working for or on behalf of the consulting organization.
“Contract” refers to an agreement for the provision of personal or professional services.
“Financial or Beneficial Interest” is defined to include (a) a creditor, debtor or ownership interest in an amount or value in excess of $1,500; (b) any employee, consultant or partnership arrangement; or (c) any option to purchase real or personal property. A Consultant shall be presumed to have knowledge of any Financial or Beneficial Interest held by a Relative.
“Representing Consultant” is a Consultant who is retained to represent, or who gives the appearance of representing, the Port.
“Relative” is defined to include a Consultant’s spouse, domestic partner, parent, child, sibling, aunt, uncle, cousin, niece, nephew, grandparent, grandchild, in-law, and any person with whom the Consultant has a relationship that is substantially equivalent to any of the above.
A “conflict of interest” exists when a Consultant’s obligations and commitments to the Port are, or may be, in conflict with the Consultant’s financial or other personal interest, or with the Consultant’s obligations or commitments to others. A conflict of interest may exist in a specific Contract , or when the nature of the services to be performed in a specific Contract creates an actual or potential conflict of interest in future work for the Port. Consultants must ensure that any financial or personal interest, or other business activity, is kept separate from their consulting role at the Port and does not influence their services to the Port. Consultants need to use common sense and keep the interests of the Port in mind at all times. In addition to avoiding actual conflicts of interests, Consultants must avoid situations that could appear to be a conflict of interest.
Port Consultant Ethics Policy CC-2 Page 1 of 5 Conflicts of interest are not always obvious or clear. When in doubt, review the situation with the Port Central Procurement Office representative identified in the solicitation (“CPO Representative”) or the Port project manager identified in the Contract. (“Project Manager”). You may also contact the Port Workplace Responsibility Officer with any questions about this policy or to review a potential conflict of interest situation or other ethics issue.
II. Real or Perceived Conflicts of Interest
The following are examples of situations in which a Consultant may feel conflicting loyalties between the Consultant’s private interests or other business activities and the Consultant’s responsibilities and commitments to the Port.
A. Disclosable Conflicts from Business Relationships
The fact of a disclosable conflict of interest is not in itself a violation of this policy. Instead, it is something that must be disclosed and waived by the Port.
A conflict of interest may exist when a Consultant performs services for another entity if those services (i) potentially adversely impact the Port of Seattle or (ii) require or result in disclosure of confidential information.
A conflict of interest may exist when a Representing Consultant, a Relative, or someone with whom a Representing Consultant has a significant personal relationship, directly or indirectly, owns any significant interest in or operates an organization that competes with the Port, is doing business with the Port, or plans to do business with the Port. Representing Consultants should, therefore, avoid owning interests in or operating companies that compete with the Port, other than minimal amounts of stock in publicly traded companies.
A conflict may also arise when a Representing Consultant or a Relative is employed by or represents a regulatory agency with authority over Port functions.
Duty to Disclose: Consultants must disclose to the CPO Representative or Project Manager all potential situations that could present a real or perceived conflict of interest. The disclosure should be made as soon as practicable, but not later than seven days after the potential conflict was known or should reasonably have been known to the Consultant. The Port will document the disclosure. The Central Procurement Office, with the concurrence of the Workplace Responsibility Officer, will determine whether the Port will waive the conflict of interest and/or identify appropriate steps to be taken to avoid or mitigate the conflict of interest. The Consultant shall not execute any contracts or perform any services for the Port of Seattle that are related to the actual or perceived conflict of interest unless and until a waiver is granted.
B. Prohibited Conflicts
Prohibited conflicts are a violation of this policy and must be disclosed to the Port.
No Consultant shall accept, directly or indirectly, any compensation, gratuity or reward in connection with a contract from any other person beneficially interested therein.
Port Consultant Ethics Policy CC-2 Page 2 of 5 A Consultant shall not participate in any decision-making, review, approval, selection, authorization or supervisory activity concerning any contract or Port transaction in which the Consultant or a Relative has a Financial or Beneficial Interest.
A Consultant shall not, directly or indirectly, ask for or give or receive or agree to receive any compensation, gift, reward, or gratuity from a source outside the Port for performing, omitting, or deferring the performance of any contractual, legal or professional obligation relating to the Consultant’s consulting role, unless otherwise authorized by law.
A conflict of interest arises when a Consultant is in a position to exploit the Consultant’s role or use of Port resources to advance the Consultant’s financial or other business or personal interests. Consultants must avoid circumstances in which it appears, or to a reasonable person might appear, that the Consultant is requesting or otherwise seeking special consideration, treatment or advantage because of the Consultant’s engagement with the Port.
Consultants shall not use their consulting role to secure special privileges or exemptions for themselves or a Relative. This includes obtaining any items or services at below market rates or confidential information from Port customers, suppliers, contractors, consultants, or lessees (or potential customers, suppliers, contractors, consultants, or lessees) or other Consultants. It also includes a Consultant using his or her engagement with the Port to help a Relative get a job offer from the Port or obtain a job offer from a Port business partner.
Duty to Disclose: Consultants must disclose to the CPO Representative or Project Manager all situations that potentially or actually constitute a prohibited conflict of interest. The disclosure should be made as soon as practicable, but not later than seven days after the prohibited conflict was known or should reasonably have been known to the Consultant.
III. Use of Port Equipment
Consultants are expected to use Port-owned property and equipment for official Port business related to an existing Contract. Consultants may not use Port owned property or equipment for any other business purpose.
A Consultant shall not take or use Port-owned property and equipment for personal purposes, convenience, or profit. This includes, but is not limited to, taking or using Port vehicles, shop tools, fax machines, copiers, postage, office supplies, cameras, smartphones and laptops. It is not a violation of this policy for a Consultant to engage in de minimis or incidental personal use of such property or equipment while at the Port workplace.
When using Port electronic systems and social media, Consultants must comply with the Port’s Electronic Systems and Social Media policies, which are posted on the Port’s public web site.
IV. Safeguarding Confidential Information
A Consultant shall not use or disclose confidential information to third parties, unless authorized by the Port in writing. “Confidential Information” includes, without limitation, any information in any form that the Port
Port Consultant Ethics Policy CC-2 Page 3 of 5 considers to be confidential and proprietary, and is not publicly available. A Consultant shall not use Confidential Information for the benefit of the Consultant or a Relative. A Consultant shall not use or disclose Confidential Information in any manner that is detrimental to the Port, regardless of whether the use or disclosure results in any benefit to the Consultant or Relative.
A. Employment
A Consultant shall disclose an offer of employment or receipt of compensation from an Employer if the Consultant knows, has reason to believe, or the circumstances would lead a reasonable person to believe, that the offer of employment or compensation was intended, in whole or in part, directly or indirectly, to influence the Consultant or as compensation or reward for the performance or nonperformance of a duty by the Consultant during his/her Port engagement. For purposes of this policy, “Employer” means any person, partnership, association, corporation, firm, institution, or other entity, whether or not operated for profit.
V. Expectations of Former Consultants For purposes of this policy, “Termination” of Port engagement is defined as the latest date on which the Consultant provided services on a Contract or, in the case of a retainer, was paid for services.
A. Disclosure Requirements
For one (1) year after Termination of a Port engagement, a Former Consultant must disclose the Former Consultant’s past Port engagement to the Port before participating in any Port business or activity and must also disclose the Former Consultant’s past Port engagement before participating in any proceeding before the Commission. The disclosure shall be made in writing to the CPO Representative or Project Manager and/or the Commission President.
B. Special Consideration Prohibited
A Former Consultant shall not request or otherwise seek special consideration, treatment or advantage from other Port staff or Port Commissioners. A Former Consultant shall avoid circumstances in which it might appear to a reasonable person that the Former Consultant requesting or otherwise seeking or receiving special consideration, treatment or advantage from other Port staff or Port Commissioners.
C. Appearances Before Commission
For one (1) year after Termination of Port engagement, a Former Consultant may not appear before the Port Commission on behalf of another individual or entity, whether or not for compensation of any kind, in relation to any matter, issue, contract, case, proceeding, application or matter in which such Former Consultant participated in a decision-making, negotiation, review, selection, supervisory or other significant activity.
By way of limited exception, the Commission may waive this provision if so requested by a Former Consultant and after public discussion and a finding by the Commission that the public or the Port’s interests would be better served. The Former Consultant must seek application to participate in the proceeding at least 14 days in advance of the Commission meeting. Such application shall be submitted in writing to the Central Procurement Office identifying all facts and the rationale for the appearance.
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D. Participation in Contracts with the Port
A Former Consultant may not participate as a competitor in any competitive selection process, or have a direct or indirect Financial or Beneficial Interest in any agreement, contract, concession, or lease that was made by, authorized or funded by Port action in which the Former Consultant participated in a decision- making, negotiation, review, preparation, selection, supervisory or other significant activity.
After one (1) year following Termination of a Former Consultant’s Port engagement, the Port may waive this provision at its sole discretion. The Central Procurement Office, with the concurrence of the Workplace Responsibility Officer, will make this determination. The waiver shall be in writing and identify all facts and the rationale for the waiver. The waiver shall be granted prior to a Former Consultant participating in a competitive selection process or obtaining a Financial or Beneficial Interest.
VI. Reporting Other Potential Violations
Consultants should report potential conflicts of interest, financial or otherwise, of any Port employee or other Consultant who is in a position to influence the selection, non-selection, or conduct of business between the Port and any entity. Reports should be made to the Port Workplace Responsibility Helpline (206-787-4357) or the Ethics & Compliance Hotline (1-877-571-5237). Consultants will not be retaliated against for reporting good faith concerns or potential violations of this policy.
For further information about this policy, please contact the Port Workplace Responsibility Helpline.
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