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![Page 1: Federal Aviation Administration Airport Concession DBE Rule Goal-Setting Presented to: So Reg Transp Civil Rights Trng By: External Program Manager FAA.](https://reader035.fdocuments.us/reader035/viewer/2022070308/551bc7e4550346af588b4f36/html5/thumbnails/1.jpg)
Federal AviationAdministration
Airport Concession DBE Rule
Goal-Setting
Presented to: So Reg Transp Civil Rights Trng
By: External Program Manager FAA Office of Civil Rights Southern Region
Date: August 3, 2005
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Concessions Goal-Setting2Federal Aviation
AdministrationAugust 3, 2005
Part 23 revises and updates the Department’s regulation concerning participation by airport concessionaire disadvantaged business enterprises (ACDBEs) in the concessions activities of primary airports.
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Concessions Goal-Setting3Federal Aviation
AdministrationAugust 3, 2005
• You are not required to submit goals if:
(1) Average car rental revenue <$200k
(2) Non-car rental average revenue<$200k
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Concessions Goal-Setting4Federal Aviation
AdministrationAugust 3, 2005
• If you have an existing ACDBE program, it must remain in effect and you must seek to continue to fulfill the objectives outlined in section 23.1
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Concessions Goal-Setting5Federal Aviation
AdministrationAugust 3, 2005
Part 23 is parallel in many important respects to the Department’s DBE regulation for Federally-assisted
contracts, Part 26.
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Concessions Goal-Setting6Federal Aviation
AdministrationAugust 3, 2005
• Courts have found that Part 26, including its goal-setting mechanism, meets the narrow tailoring requirements.
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Concessions Goal-Setting7Federal Aviation
AdministrationAugust 3, 2005
• Under Part 26, many airports have had to continue race-conscious methods to achieve their goals. There is no information to suggest that airport-concession programs are exempt from the effects of discrimination to which other public-sector business activities are subject.
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Concessions Goal-Setting8Federal Aviation
AdministrationAugust 3, 2005
DOT believes it essential to conform the Part 23 goal-setting provisions as closely as possible to those of Part 26.
Both 23 and 26 require the maximum use of race-neutral measures; and,
Race-conscious methods continue to be a necessary part of a narrowly tailored strategy to ensure nondiscrimination.
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Concessions Goal-Setting9Federal Aviation
AdministrationAugust 3, 2005
• You must establish two separate percentage overall ACDBE goals:
1. Concessions (other than car rentals)
2. Car Rentals.
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Concessions Goal-Setting10Federal Aviation
AdministrationAugust 3, 2005
• Each overall goal must cover a three-year period. You must review your goals annually to make sure they continue to fit your circumstances.
• You must report to the FAA any significant adjustments that you make to your goal in the time before your next scheduled submission.
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Concessions Goal-Setting11Federal Aviation
AdministrationAugust 3, 2005
Base of Goal
• To calculate the base for the goal, project potential concession revenue three years into the future.
• Take into account preceding 3 years of gross concession receipts and upcoming new opportunities.
• Actual dollar amount will vary by airport and by year, and will be a “best estimate” of potential concession revenue.
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Concessions Goal-Setting12Federal Aviation
AdministrationAugust 3, 2005
EXAMPLE 1
• Average concession receipts over past three years is $1 million. Airport expects this level of revenue to continue through next three years.
• Airport estimates that revenues to existing concessions will grow by 5% over the next three years (e.g., inflation + increased passenger traffic).
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Concessions Goal-Setting13Federal Aviation
AdministrationAugust 3, 2005
EXAMPLE 1 - Continued
• Airport does not anticipate any major changes that would markedly increase or decrease concession revenues over next three years.
• Base for goal is $1, 050, 000.
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Concessions Goal-Setting14Federal Aviation
AdministrationAugust 3, 2005
EXAMPLE 2
• Preceding 3-year average concession revenues are $1m, as in Example 1. 5% growth estimate same as in Example 1.
• Airport is opening a new terminal, which is projected to bring in an additional $3m in concession revenues over the next 3 years.
• Apply growth percentage to total of projected continuing and new revenues.
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Concessions Goal-Setting15Federal Aviation
AdministrationAugust 3, 2005
EXAMPLE 2 - continued
• So, $1m + $3m = $4m• 5% of $4m = $200, 000• Total base is $4,200,000
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Concessions Goal-Setting16Federal Aviation
AdministrationAugust 3, 2005
EXAMPLE 3
• Preceding 3-year average concession revenue is $3m.
• In Year 2 of the period to be covered by the goal, Useless Airlines plans to abandon its hub at the airport.
• This is projected to reduce concession revenues by $1m per year.
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Concessions Goal-Setting17Federal Aviation
AdministrationAugust 3, 2005
EXAMPLE 3 - Continued
• So projected continuing revenues for Year 1 are $3m; for Years 2 and 3 corresponding figure is $2m.
• Three-year total is $7m.• Airport estimates a 3% increase in
remaining revenues due to inflation
(3% of $7m = $210,000)• Total base is $7,210,000.
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Concessions Goal-Setting18Federal Aviation
AdministrationAugust 3, 2005
• You must submit your ACDBE goals to the FAA Regional Civil Rights Office for approval. The first goals are due on the following schedule:
• Large or Medium Hub – January 1, 2006
(next submission 10/1/2008);
Small Hub – October 1, 2006;
Non-hub Primary – October 1, 2007
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Concessions Goal-Setting19Federal Aviation
AdministrationAugust 3, 2005
• You must then submit new goals every three years after the date that applies to your Airport. Timely submission of goals is a condition of eligibility for grants.
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Concessions Goal-Setting20Federal Aviation
AdministrationAugust 3, 2005
• Your goals established under this part
must provide for participation by all certified ACDBEs and may not be subdivided into group-specific goals.
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Concessions Goal-Setting21Federal Aviation
AdministrationAugust 3, 2005
• §23.51 talks about how to calculate and express the goals.
• It applies to both the overall goal for car rentals and the overall goal for concession activities.
• It is designed to parallel the goal-setting mechanism of Part 26.
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Concessions Goal-Setting22Federal Aviation
AdministrationAugust 3, 2005
• You must complete the goal-setting process separately for concessions and car rentals.
• Each overall concessions goal must be based on demonstrable evidence of ready, willing, and able ACDBEs.
• You cannot simply rely on the 10% national aspirational goal.
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Concessions Goal-Setting23Federal Aviation
AdministrationAugust 3, 2005
• Your market area is defined by the geographical area in which the substantial majority of firms that seek to do concessions business with the Airport are located, and,
• The geographical area in which the firms which receive the substantial majority of concession-related revenue are located.
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Concessions Goal-Setting24Federal Aviation
AdministrationAugust 3, 2005
Part 23 – Goal Setting
• Subpart D applies to the goal-setting process.
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Concessions Goal-Setting25Federal Aviation
AdministrationAugust 3, 2005
• If you need additional time to collect data or take other steps to develop an approach to setting overall goals, you may request approval for an interim goal and/or goal-setting mechanism.
• Such steps must reflect the relative availability of ready, willing, and able ACDBEs.
• Must avoid imposing burdens on non-ACDBEs.
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Concessions Goal-Setting26Federal Aviation
AdministrationAugust 3, 2005
Goal-Setting – Non-Car Rental
• The base of your goal includes the total gross receipts of concessions including goods and services.
• This base does not include the gross receipts of car rental operations or management contracts/subcontracts with non-ACDBE firms
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Concessions Goal-Setting27Federal Aviation
AdministrationAugust 3, 2005
Goal-Setting-Car Rentals
• The base for this goal is the total gross receipts of car rental operations at your airport.
• Do not include gross receipts of other concessions in this base.
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Concessions Goal-Setting28Federal Aviation
AdministrationAugust 3, 2005
Goal Setting-Procedure
• Your submission must include a description of the method used to calculate your goals and the data you relied on.
• Show your work - provide FAA the data, calculations, assumptions, and reasoning used.
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Concessions Goal-Setting29Federal Aviation
AdministrationAugust 3, 2005
Goal Setting-Procedure
Your submission must include your projection of the portions of your overall goals you propose to meet through use of race-neutral and race-conscious means.
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Concessions Goal-Setting30Federal Aviation
AdministrationAugust 3, 2005
Public Participation
• 23.43 – You must provide for public participation by taking at least the steps listed in (b):
• These steps are identical to the public participation section at 26.45(g)(1) regarding consultation.
• Publication of the goal is not required.
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Concessions Goal-Setting31Federal Aviation
AdministrationAugust 3, 2005
New Opportunities
• If a new concession opportunity arises that offers an estimated average annual gross revenue of $200k or greater, even at a time between normal submission dates, you must submit an appropriate adjustment to your overall goal at least six months in advance of ratifying any new concessions agreement.
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Concessions Goal-Setting32Federal Aviation
AdministrationAugust 3, 2005
Exemptions
• You may apply for an exemptions from any provision of this part by writing to the Office of the Secretary or the FAA. The Secretary will make final decision.
• You must document special or exceptional circumstances not likely to be generally applicable;
• You must agree steps specified by the DOT or FAA.
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Concessions Goal-Setting33Federal Aviation
AdministrationAugust 3, 2005
Waivers
• You can apply for a waiver of any provision of subpart B or D.
• The FAA Administrator has the authority to approve your application.
• Program waivers are for the purpose of operating an ACDBE program that achieves the objectives of Part 23.
• See 23.13 (d) (1).
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Concessions Goal-Setting34Federal Aviation
AdministrationAugust 3, 2005
Counting ACDBE Car Rentals
• You may count the value of purchases or leases from any ACDBE vendor.
• You may count the purchases from ACDBE providers of goods and services.
• You may count fees and commissions charged by an ACDBE to manage a car rental concession.
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Concessions Goal-Setting35Federal Aviation
AdministrationAugust 3, 2005
Counting ACDBE Non-Car Rental Participation
• You may count ACDBE participation that results from a commercially-useful function.
• Count the total dollar value of gross receipts an ACDBE earns under a concession agreement or sub-agreement and count the total dollar value of an ACDBE management contract or subcontract.
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Concessions Goal-Setting36Federal Aviation
AdministrationAugust 3, 2005
Counting ACDBE Non-Car Rental Participation
• Count the portion of the gross receipts earned by an ACDBE under a sub-agreement.
• Count the portion of the gross receipts equal to the distinct, clearly defined portion of the work an ACDBE performs with its own forces under a joint venture agreement.
• You may count fees and commissions charged by an ACDBE firm.
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Concessions Goal-Setting37Federal Aviation
AdministrationAugust 3, 2005
Terminal Leases
• You must pass through applicable requirements of this part to the private terminal operator or lessee via your agreement with the owner or lessee.
• You must ensure that the terminal owner or lessee complies with the requirements of this part.
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Concessions Goal-Setting38Federal Aviation
AdministrationAugust 3, 2005
Terminal Leases
• Primary airports must obtain from the terminal owner or lessee the goals and other elements of the ACDBE program required under Part 23.
• If the terminal building is at a non-primary commercial service airport or general aviation or reliever airport, you must ensure that the owner complies with 23.21(e)
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Concessions Goal-Setting39Federal Aviation
AdministrationAugust 3, 2005
Long-Term Exclusive Agreements
• A long-term, exclusive agreement is one having a term of longer than five years.
• Is a five year lease with a five year extension controlled solely by the airport long-term exclusive? It depends…
• FAA’s Regional Offices can grant approval for a long-term lease if deemed acceptable.
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Concessions Goal-Setting40Federal Aviation
AdministrationAugust 3, 2005