After an overhaul of the city’s procurement process, lucrative airport concessions contracts on hold for more than a year because of the federal corruption investigation into City Hall will be rebid, Atlanta Mayor Keisha Lance Bottoms said Wednesday.
“We are going to start over,” Bottoms said at an editorial meeting with The Atlanta Journal-Constitution.
For the more than 100 million travelers that pass through the Atlanta airport each year, the decision means that the modernization of the concessions and retail shops at the world’s busiest airport will be delayed even longer.
But Bottoms said questions about the integrity of the city’s procurement process needed to be addressed before the city could take any action on contracts worth millions of dollars in revenue.
She said a series of reforms have strengthened the city’s procedures and and now a contracting process clouded by subpoenas from federal prosecutors in a multi-year corruption investigation will receive a fresh start.
Tossing out such bids has resulted in costly legal challenges in the past.
However, Bottoms said some companies that bid on the contracts for a massive revamp of more than 80 retail shops aren’t the same organizations they were when they were awarded the contracts. She cited one successful bidder that had since merged with another company.
“Even the structure of some of the companies has changed,” Bottoms said.
The mayor said the city will rebid the contracts sometime in 2019.
“Everything that’s been held, I do think we have the process in such a way that our team is comfortable putting them back out,” Bottoms said.
Meanwhile, existing concessions contracts will have to be further extended.
Bottoms said she had been considering rebidding the contracts, “But I didn’t want to put them back out until we cleaned up the procurement process.
Now, with a new e-procurement system planned and a new city chief procurement officer in place, “I’m more comfortable than I’ve ever been that we need to probably put those back out for bid,” she said.
Controversy over contracts
Multiple people and companies involved in airport concessions contracting have been tied to issues being investigated.
The city’s former chief procurement officer Adam Smith was in charge of contracting for the airport and the rest of the city, and was sentenced to prison earlier this year for his role in a cash-for-contracts scandal.
And, the winner selected for some of the contracts for the Concourse E shops and restaurants, Hojeij Branded Foods, is linked to a company run by the wife of a Hartsfield-Jackson executive fired in March after revelations about a possible conflict of interest.
An Atlanta Journal-Constitution investigation last year also found that people and businesses with interest in the contracts for airport shops donated more than $287,000 to candidates for mayor, including Bottoms.
The FBI raided the office of a potential bidder, Jeff Jafari, who represented the Airport Retail Concessions Group and resigned from another firm, the PRAD Group, shortly after the raid.
All of the major mayoral candidates except for Bottoms called for Reed to halt the concessions contracts because of the ongoing federal bribery investigation.
Now, as she prepares to rebid them, Bottoms said Wednesday: “Those bids were submitted some time ago…. They’re old bids.”
Among Bottoms’ reforms is a new e-procurement system that allows contractors to submit bids electronically. The mayor said it costs roughly $30,000 to assemble bids on some contracts in large part due to the requirement that they be submitted on paper.
“You have got boxes and boxes of paper,” Bottoms said.
The city will now require that all small purchases greater than $50 but less than $20,000 be submitted to the Department of Procurement for sourcing. In the past, Bottoms said, individual departments approved the purchases leaving the city vulnerable to double billing.
Bottoms said without centralized oversight of smaller purchases vendors could bill one department and then another for the same goods and services.
“It’s often not the big things that get us in trouble,” Bottoms said. “It’s the broken tail light.”
Other reforms include mandatory annual ethics training for the procurement department employees and independent audit reviews on all contracts that exceed $1 million
Bottoms also hired David Wilson to serve as the city’s new procurement officer. Wilson, a retired U.S. Air Force lieutenant colonel, has been an awarded a Bronze Star for meritorious service; supported 40 diverse organizations that managed $1.2 billion in commodity, service and construction contracts; and consistently led teams recognized by the Air Force for outstanding contracting and management.
History of airport contracting delays
Delays in airport contracts have raised eyebrows for years.
After former Atlanta airport manager Miguel Southwell was fired by then-Mayor Kasim Reed, his attorney wrote that the Concourse E contracting had been held by the city’s Department of Procurement starting in August 2015 “despite the fact that the existing agreements were due to expire in Spring 2016.”
The contracting process for Concourse E restaurants moved forward in 2016, but has since been put on hold.
Because of that, contracts have been extended for current restaurateurs on Concourse E led by people who were major campaign contributors to Reed.
One of those restaurateurs, Jackmont Hospitality, last week celebrated the 10-year anniversary of an award-winning upscale airport restaurant on Concourse E, One Flew South.
Bottoms and Atlanta City Council transportation committee chair Andre Dickens appeared at the anniversary event at the Porsche Cars North America headquarters by the airport.
Hartsfield-Jackson general manager John Selden has said the delays have slowed the update of concessions that could modernize the airport, which “possibly could bring additional profits.”
“But my priority is to do this right,” he said.
Yet to be seen is what kind of legal risk the city could face by rebidding the contracts, particularly if different winners are chosen in the rebid.
Winners had already been selected in city recommendations for the airport retail shops.
Any legal risk is “something our legal team will have to weigh in on,” Bottoms said Wednesday.
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