The city of Atlanta said Friday it will toss out all of the proposals it received for new concessions at Hartsfield-Jackson International Airport and start the process over, possibly affecting the planned opening date of the airport's international terminal.
The issue, according to the city, is that 41 of the 95 proposals submitted for available concessions packages were missing required documents. That would disqualify them from the running and significantly diminish the pool of competitors for the concessions, which could reduce revenue, said the city's chief operating officer Peter Aman.
But restarting the process now could delay the opening of the international terminal from the target date of April 15, Aman said at a meeting with AJC reporters and editors. He and other city officials said they still expect to open in the spring, as they have previously said publicly.
Another possibility is that the terminal may open with only some of its concessions completed, Aman said.
"We're not happy to be in this situation," he said. Concessions are "a core element of what it means to have a preeminent airport."
Hartsfield-Jackson officials have spent years trying to prepare for a smooth opening of the international terminal, which has been under construction since 2008. As a new front door to Atlanta for travelers from all over the world, airport officials know the opening will be closely watched on an international scale. They are also keen to avoid airport terminal opening disasters like Denver International Airport and London Heathrow have experienced in past years. Both had major baggage system problems.
Harstfield-Jackson general manager Louis Miller said Friday that “we will do everything we can to get this terminal open on time.”
With plans to revamp concessions throughout the airport, as well as open new ones for the international terminal, this is the largest round of concessions contracts to be awarded in Hartsfield-Jackson's history, and among the largest nationally. The restart of the process also comes against the backdrop of a history of corruption in contracting at Hartsfield-Jackson.
In response to questions about whether the decision to start the concessions solicitation all over again was related to concessionaires that have made campaign contributions to the mayor and city council members, city officials said it was not. They said chief procurement officer Adam Smith did not share information on which proposals were disqualified with the mayor and other city officials, and that Smith made the decision independently.
Aman said concessionaires' campaign contributions were not a consideration and said many businesses at the airport have contributed to city council members and to the mayor.
He said if the international terminal opening is affected, "we'll apologize profusely if there is some problem, but at the end of the day it's worth the money to the airport, it's worth the service to the citizens and taxpayers, and it's worth the hit because we're able to show that we were honest and fair and that we didn't give favoritism to anybody. We canceled the thing full-on and that's worth it."
Of the 41 proposals missing documents, 34 of them had problems with the form to comply with the Georgia Security and Immigration Compliance Act to ensure the legal status of workers.
"We felt the loss of competition through disqualification was too great," Aman said. "We're trying to maximize the revenue over a seven or ten-year period" -- which is the length of the concessions contracts to be awarded.
The largest group of proposals that would have been disqualified were for small packages of food and beverage concessions, which were aimed at being more accessible for small businesses and new entrants to the airport.
Anthony Joseph, president of Atlanta-based Concessions International, said after hearing about the city's decision, "We're disappointed given all the work, time and effort that went into the proposals."
Pauline Armbrust, chief executive of Airport Revenue News, said Los Angeles also recently redid a concessions process.
"The deals are large and so there's a lot of money at stake," Armbrust said. "It's so competitive out there right now."
Aman did not know how much restarting the process will cost the city. Joseph said for a concessionaire, filing a new proposal could cost anywhere from a few thousands dollars to tens of thousands of dollars more. Accelerating construction for the international terminal opening would also add costs.
Aman acknowledged that the way the city responds to the issue could put it at risk of being sued, but said restarting the entire process over again had the least legal risk because the city has the discretion to do that.
"The problem was anytime you looked at corrective action, you opened yourself up to protests and lawsuits," Aman said. "The right to cancel and reissue is the safest and lowest risk."
Every vendor will have to re-apply – even those who did it right.
The city is making the decision more than a month after receiving the proposals, and now plans to release a new schedule next week.
Aman said the city weighed the decision with the awareness that "we have to do everything we can to make sure we don't look -- for lack of a better word -- dishonest."
AJC reporter Ernie Suggs contributed to this story.
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