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CITY OF DALLAS
Addendum No. 5
(RFP BT1101)
Date: 4.18.11
Proposal Due Date and Time: Changed from May 18, 2011 at 2:00 p.m. to June 1, 2011 at
2:00 p.m. Note: The deadline for questions has been extended from April 8, 2011 to April 22,
2011.
2. The MAG requirements set in the RFP for the Food Court locations are highly
unrealistic and would be considered highest in the industry. The sales volume for
each of the food court locations/categories would have top perform at a $2.4-
$3.0 million dollar range to reach the MAGs the RFP is requiring. Please
reconsider adjusting the Food Court MAGs to an industry standard level.
Answer: Given feedback from the industry, the minimally acceptable MAGs will
be adjusted in a subsequent Addendum.
4. How will the value of each package be determined for the incumbents first right
of refusal? It would be helpful if we understood the value of these packages
before we bid.
Answer: The value of the packages will be listed in a subsequent Addendum.
Bear in mind the value of the packages is solely for the purpose of the right of
first refusal process.
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5. The sub lease states for an annual review for pricing. An annual review could
cause margin erosion for certain commodity type items like coffee where costs
will probably change more frequently. Please consider allowing tenants to
change price quarterly if market fluctuations dictate.
Answer: The reference to “annual review for pricing” in Attachment A – Form
Contract applies to the City’s right to grant exclusive rights throughout the
Terminal to certain products (for example, bottled beverages or other pouring
rights). For other products, concessionaires must comply with the street pricing
policy set forth in Section 9(N) of the Form Contract.
6. Space C2321 Snack, I would like to request that this space be exempt from the
30% closure requirement in the criteria. It is currently best case only 8’-2” open.
If the rule is followed the opening would be only 5’-8” clear which seems unduly
detrimental to the concessionaire.
Answer: The City will consider an exception for this space as part of the
negotiations with the most advantageous proposer.
7. In Package 2, please consider removing the “Coffee & Tea House” requirement
for Location C2261. There are already two Branded Coffee locations nearby
(L2103/Package 5 and C2174/Package 5). In addition, the aromas from the
coffee and tea will conflict with the wine experience. What would the respective
MAG be?
Answer: The proposed mix of concepts has been vetted thoroughly. However,
as with all packages, the City will consider alternatives to the listed concept as
part of the evaluation process.
8. Please consider putting space C2261 in its own package, i.e. Package #15, still
slated to open April 2013 (space C2396 and space L1045 would remain slated
to open October 2014). This will encourage more competition for this space
among local and national proposers.
Answer: The City has considered your analysis and has determined the current
combination as the most advantageous to the City.
9. Regarding the Proposal Evaluation Criteria – Page 15, the evaluation criteria
includes financial factors such as net worth, which typically would not apply to
corporations. Would audited financial statements provide enough information for
the panel to evaluate the “Financial Capability” of the proposer and be accepted
for such?
Answer: Yes.
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12. Please describe the physical condition of the space will be delivered to the
concessionaire (e.g. slab only, vanilla box, demising walls in place, drains in
place).
Answer: Slab only with access to utilities that support the defined use.
13. Will utilities be available directly at each of the spaces? Or will concessionaire
be required to hook-up to utilities at a certain (central) location outside of space?
14. Would you please provide detail on the process and costs related to the central
receiving facility?
Answer: The operation and costs of the Central Receiving Facility has not been
fully determined by the City at this time. It is anticipated that deliveries from the
Central Receiving Facility to the loading dock in the terminal will be handled by a
third-party operator. The fixed costs for all shared services including the central
receiving facility will be capped at no more than 3% of sales. Concessionaires
will be responsible for their merchandise once it is delivered to the loading dock
in the terminal. Please note that the City reserves the right to modify the
operations of distribution services and the Central Receiving Facility at any time
without notice or liability.
15. Will the delivered premises have interior kitchen wall finishes? If so, what type?
16. Will the gas lines provided be delivered via floor or ceiling stubs?
17. Will there be any restrictions on the hours during which construction can occur?
18. Can detail be provided for any barricade or other construction mandates?
Answer: Yes, that information can be provided. Generally, in areas that are
open to the public, any construction activities should not be visible to the public.
Reasonable soundproofing also needs to be considered. Any barricades facing
the public areas should be aesthetically pleasant and inform the public of the
upcoming service/business and opening date.
19. Can you provide detail on the electric service that will be provided to the food
and beverage spaces?
Answer: Electrical Panel 120/240V Electrical Panel, Circuit Breaker Size: 600A,
120/208 3P (400A, 120/208 3P at Kiosks)
20. With regards to Section 8 (N)(1) of Attachment A: Please define “off-Airport”
locations (e.g. may a location at the Dallas/Ft. Worth airport be used as a
“comparable” location?).
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Answer: The City defines ”off–airport” as not being comparable to any airport
location.
21. Can we use stores anywhere within the Dallas metropolitan area?
Answer: Yes if the stores are in a publically accessed location, not located as a
concession space in a controlled access facility, e.g. amusement park, sporting
venue, theaters, hotels, etc.
22. What are the parameters of the Dallas metropolitan area? Does it include
Dallas, Ft. Worth and all suburbs in the metropolitan area?
Answer: City of Dallas limits and immediate suburbs.
23. How many comparison stores are required? How many should a proposer use?
Answer: The City envisions three locations as comparison sites.
24. Is the maximum price to be charged at Love Field the average of the
“comparable” store prices? Or is it below the highest price or the lowest price at
any of the “comparable” locations?
Answer: Average of comparables.
25. Please describe how comparison locations will be determined (in consultation
with the Concessionaire).
Answer: The City envisions three locations as comparison sites. The City
reminds prospective respondents that if they operate another facility in the
Dallas metropolitan area of the same concept/brand as proposed, then that
facility must be a comparison location.
26. How often can we submit new benchmark pricing in order to request a price
increase at Love Field?
Answer: See answer to question #5 above
27. How will we determine a price for items that may be a special promotional item
at some/all comparison stores but where we would need different pricing within
an airport?
Answer: Special promotions will not be considered in the evaluation of street
pricing.
28. What factors (other than a store closing) would cause the City to change the
comparison locations? How often can the Concessionaire change comparison
locations?
Answer: The City will work with the Concessionaire and review any changes to
the comparison stores and restaurants. However, the City anticipates that the
only considerations that would cause a need to change comparison locations
would be the closing of a comparison store or restaurant, change in service
style, change in brand, or substantial change in merchandise mix or menu.
29. Please provide additional detailed guidance on the Food Court Janitorial Service
Fees, Central Receiving Fees, Trash Removal Fees, Utility Costs, etc. (e.g. cost
per sq ft, as a % of sales or a maximum not to exceed).
Answer: The operation and costs of the Central Receiving Facility has not been
fully determined by the City at this time. It is anticipated that deliveries from the
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Central Receiving Facility to the loading dock in the terminal will be handled by a
third-party operator. The fixed costs for all shared services including the central
receiving facility will be capped at no more than 3% of sales. Concessionaires
will be responsible for their merchandise once it is delivered to the loading dock
in the terminal. Please note that the City reserves the right to modify the
operations of distribution services and the Central Receiving Facility at any time
without notice or liability.
30. How will I know if proposer can get storage space in the terminal and where it
will be located?
Answer: There will be limited storage in the terminal, the distribution will not
occur until after the most advantageous proposals are selected and the storage
requests of each concessionaire are known.
31. We recognize from the earlier responses that submittals cannot be offered on a
contingent basis. Is there a limitation on the number of square footage one
vendor can obtain for storage? How can we ensure the minimum remote storage
requirements needed to support the required sales volumes necessary for the
financial obligations?
Answer: There will be limited storage in the terminal, the distribution will not
occur until after the most advantageous proposals are selected and the storage
requests of each concessionaire are known.
33. If the answer to question [32] above is: there are additional charges over and
above the “shared services” charges (e.g. food court charge), could you please
list the additional charges and their estimated amounts?
Answer: See answer for question 32 above.
34. RFP BT1101 - Love Field Food & Beverage – The Restaurant Concept and
Design section (Tab 8) allows, “seven (7) pages for each facility included in the
package.” For purpose of the page limitations, is “facility” to be interpreted as
location or concept? For example, if Proposer is bidding the same concept for 2
of the 3 locations within a package, is Proposer allowed up to 7 pages for each
concept or for each location?
Answer: Each location.
35. Also under this section (Tab 8), is Proposer allowed to separate each concept
with an additional tab, or with a letter-size page that would act as a divider sheet
and would not count toward the page limitation?
Answer: Divider sheet, which will not count toward page limit.
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B. Given the above, the MAG is too high for the package considering the
amount of choices that will be available to travelers.
Answer: See answer to question #2 above.
C. The additional percentage’s owed to the airport food court janitorial services
and central receiving are not defined.
Answer: See answer to question 29 above.
D. Please confirm Street pricing and not Street +10 even though it is currently
that way at both Love and DFW.
Answer: Street pricing.
E. The RFP does not state anything about gas supply or the venting of hood
exhaust for the concessionaires. Will those be available in the food court
locations?
Answer: Yes.
Given several of these factors, it is unlikely that our franchisee will be able to bid
on the package as the probability of making any money, let alone breaking even
seems improbable. This franchisee is a proud Dallas business and we are
excited about the prospect of partnering with Dallas Love Field to represent the
brand. I appreciate your time and help in responding to the above answers.
38. We are working with a franchisee who is interested in bidding our brand for the
RFP at Dallas Love. However, we are having difficulty making the numbers work
for Package #12. In order to help him get his proforma in line can you address
the following concerns:
A. The projected sales seem to be over-estimated for the food court locations
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given the current enplanements and amount of F&B square footage that is
being released. How was it valued?
Answer: See answer to question #2 above.
B. Given the above, the MAG is too high for the package considering the amount
of choices that will be available to travelers.
Answer: See answer to question #2 above.
C. The additional percentage’s owed to the airport food court janitorial services
and central receiving are not defined.
Answer: See answer to question 29 above.
D. Please confirm Street pricing and not Street +10 even though it is currently
that way at both Love and DFW.
Answer: Street pricing.
F. The RFP does not state anything about gas supply or the venting of hood
exhaust for the concessionaires. Will those be available in the food court
locations?
Answer: Yes.
Given several of these factors, it is unlikely that our franchisee will be able to bid
on the package as the probability of making any money, let alone breaking even
seems improbable. You answers to the above may help to get him into the
process.
39. I am looking specifically at package 8. Given the size of the two locations
(407 square feet each) I am anticipating that each would be a large kiosk and
would have the potential for some seating as well. Could you tell me if this is
correct?
Answer: The City anticipates the locations to be kiosks. Any seating a
respondent wishes to propose must fit within the premises.
40. It would be very helpful if you could also tell me the dimensions of the spaces.
Answer: The locations are approximately 10’-0” x 40’-8”. Please see
Exhibit E – LOD Finals.
41. In the two airport locations we currently operate, we will be offering gelato this
summer and would also like to offer that at Love Field if acceptable.
Answer: All concepts need to be submitted as part of a proposal and will be
evaluated according to the published criteria.
42. We understand that many questions about the reality of the minimum MAG’s set
for the RFP continue to be asked. [We] feel the minimum MAG’s proposed for
several locations are highly unrealistic for the following reasons:
1. DAL will have 26,886 square feet for food and beverage concessions in the
new program. This equates to 5.1 square feet of concession space for
every 1,000 enplaned passengers. This calculation (food and beverage
square footage per 1,000 passengers) is a very important metric used in
forecasting sales and Revenue per Enplanement potential. The new
program in Dallas Love will have 16% less square footage per passenger
than the average of the top 25 performing North American airports (see
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attached Airport Retail News Industry fact report). For example, actual
airport programs such as Calgary, Montreal, Memphis and Portland
possess double the square footage (of the new Dallas Love program), but
will drive the same sales volume being projected for Dallas Love. Our
question is, how is this possible?
3. DAL will have a “street” pricing model. Most (if not all) of the top 25 airports
allow “premium” pricing (street plus 10%-15%) allowing operators a greater
change to drive sales (and pay higher rent). Again, how can operators be
expected to pay this high MAG rent with a street pricing model?
Answer: The City has decided as a service to its customers that
competitive affordable pricing is critical in continuing to drive use and
enjoyment of Dallas Love Field.
43. Most of the airport traffic will be on a low-cost carrier (Southwest) and industry
data proves that these customers typically spend less than “legacy” carrier
passengers. This passenger demographic coupled with a “street” pricing model
further adds to the argument that the sales per enplaned passenger projections
are unrealistic and unachievable.
Answer: A number of factors were considered in determining minimally
acceptable MAGs. The City reminds prospective respondents that the minimally
acceptable MAGs in the RFP are shown in 2015 dollars and that certain
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characteristics of the Airport are likely to change due to the expiration of the
Wright Amendment in 2014. Also, see answer to question #2 above.
44. Many of the top 25 airports offer 10 year terms, versus the 7 and 9 years being
offered at DAL.
Answer: The term offered in this RFP has been determined to be in the best
interest of the City.
45. Most airport MAG’s are set at 85% of projected percentage rent (in fact it is
common practice across the industry). Based on factual industry
projections, DAL appears to have set MAGS at over 200% of projected
percentage rent in some locations.
Answer: A number of factors were considered in determining minimally
acceptable MAGs. The City reminds prospective respondents that the minimally
acceptable MAGs in the RFP are shown in 2015 dollars and that certain
characteristics of the Airport are likely to change due to the expiration of the
Wright Amendment in 2014. Also, see answer to question #2 above.
46. The current MAG’s in the RFP are going to cause potential concessionaires not
to bid at all, or those that do bid, will lose money over the term of the
agreement. I understand that we are not the only large firm (or small one for that
matter) questioning the MAG’s. We are not asking for MAG’s to be waived or
percentages to be reduced. We are just asking for them to be set at a level
where we can actually bid and the City will win with any upside in rent.
Answer: See answer to question #2 above.
47. Question: The following question was originally asked and answered as part of
Addendum 3, Set 1, Question 3: Will respondents receive credit for MWBE if
money is spent on capital improvement or only counting operations side?
Revised Answer: Federally-mandated ACDBE participation regulations are
analogous to the City of Dallas’ M/WBE requirements; however, pursuant to 49
CFR Part 23, costs incurred in connection with the construction of a concession
facility cannot be counted toward the ACDBE participation goal.
Note: If you’ve submitted a question and it has not been addressed, please contact
Mario Alvarado at mario.alvarado@dallascityhall.com .
If you have any further questions, please contract Mario Alvarado directly at
214.243.2127.
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