HomeMy WebLinkAbout2006-06-07 STAFF REPORTS 2I �2
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441FORN,P City Council Staff Report
DATE: June 7, 2006 CONSENT AGENDA
SUBJECT: AGREEMENT AWARDS TO FIVE FULL - SERVICE AIRPORT RENTAL
CAR OPERATORS AVIS RENT A CAR SYSTEM, LLC, BUDGET RENT
A CAR SYSTEM, INC., DTG OPERATIONS, INC., THE HERTZ
CORPORATION, VANGUARD CAR RENTAL USA INC., AND TO ONE
LIMITED SERVICE AIRPORT RENTAL CAR OPERATOR ENTERPRISE
RENT-A-CAR COMPANY OF LOS ANGELES TO OPERATE AIRPORT
RENTAL CAR CONCESSIONS.
FROM: David H. Ready
BY: Aviation Department
SUMMARY
Recommend City Council accepts the highest five bids to provide full service airport
rental car concessions and the highest bid to provide a limited service airport rental car
concession and authorize the City Manager to execute five full service airport rental car
concession agreements and one limited service airport rental car concession agreement
for a term of three years, with two one year option periods at the discretion of the City.
RECOMMENDATION:
1. Approve Minute Order No. , authorizing award of five full service airport
rental car concession agreements to Avis Rent A Car System, LLC, Budget Rent
A Car System, Inc., DTG Operations, Inc. (Dollar/Thrifty), The Hertz Corporation,
and Vanguard Car Rental USA Inc. (National/Alamo), and one limited service
airport rental car concession agreement to Enterprise Rent-A-Car Company Of
Los Angeles for a term of three years and two one year option periods at the
discretion of the City.
2. Authorize the City Manager to execute all necessary documents.
STAFF ANALYSIS:
Currently there are five full service airport rental car concession operators and one
linnited service airport rental car concession operator. The current full service operators
Item No. 2. I .
City Council Staff Report
(June 7, 2006) --Page 2
(Car Rental Concession Awards)
are Hertz, Vanguard (National/Alamo), Avis, Budget and Dollar. The current limited
service operator is Enterprise. The full service operators have customer service
counters, vehicle service facilities and car rental ready and return spaces on the Airport.
The limited service airport rental car operator only has a customer service counter on
the Airport. The six concession agreements will terminate June 30, 2006.
An Invitation for Bid (IFB) was advertised for 30 days beginning March 30, 2006
soliciting bids for five full service airport rental car operators and one limited airport
rental car operator. A pre-bid meeting was held on April 7, 2006 and bids were received
on May 2, 2006,
The highest bid to lowest bid ranking was determined by the total of the three years of
Minimum Annual Guarantee (MAG) offered by each operator in their respective bids.
The MAG is the minimum dollar amount the car rental operator will pay to the City each
year. However, the Concession Fee paid to the City each year will be the higher of the
MAG or 10% of the operator's gross revenues over the one year period. In addition to
this Fee, the concessionaires also pay a rental for counters, service facilities and
vehicle ready parking spaces.
The following bids were received on May 2, 2006 by the City in the order of highest bid.
Full Service Car Rental Operator Bids
1. 'The Hertz Corporation (Hertz) three year amount of$3,130,000,
2. Budget Rent A Car System, Inc. (Budget) three year amount of$2,988,004,
3. DTG Operations, Inc. (Dollar/Thrifty) three year amount of$2,331,110,
4. Vanguard Car Rental USA Inc. (National/Alamo) three year amount of
$2,154,250,
5. Avis Rent A Car System, LLC (Avis) three year amount of$2,150,017, and
6. Enterprise Rent — A — Car Company of Los Angeles (Enterprise) three year
amount of$2,043.971.12.
Limited Service Car Rental Operator Bids
1. Enterprise Rent — A — Car Company of Los Angeles (Enterprise) three year
amount of$1,174,696.04.
2. Avis Rent A Car System, LLC (Avis) three year amount of$968,296
3. DTG Operations, Inc. (Dollar/Thrifty) three year amount of$951,000, and
4. Budget Rent A Car System, Inc. (Budget) three year amount of$871,200.
Based upon the above ranking of high to low bids and all operators passing the
qualifications component of the IFB, it is recommended to award full service airport
rental car concession agreements to the five highest bidders —The Hertz Corporation,
Budget Rent A Car System, Inc., DTG Operations, Inc. (Dollar/Thrifty), Vanguard Car
City Council Staff Report
(June 7, 2006) -- Page 3
(Car Rental Concession Awards)
Rental USA Inc. (National/Alamo), and Avis Rent A Car System, LLC and one limited
service airport rental car concession agreement to Enterprise Rent—A— Car Company
of Los Angeles.
Included in the new concession agreements with the airport rental car operators is the
provision to implement a Customer Facility Charge (CFC). This is a $10.00 per
transaction fee that is collected by the airport rental car operators on behalf of the City
from rental car customers, and is regulated by California State Law. The CFC fee can
only be used for the expansion and enhancement of common airport rental car facility
areas. This fee will only be implemented capon approval by the Council. Staff will first
consult with the airport rental operators regarding the need to expand and enhance
common facilities before requesting Council approval. Upon approval of the Council,
staff will then give no less than a 60 day implementation notice to the airport rental car
operators.
At its regularly scheduled meeting on June 7, 2006, the Airport Commission voted to
recommend to the City Council to approve awarding the six agreements as detailed
above.
FISCAL IMPACT:
At a minimum, these awards add approximately $894,799.85 of operating revenues to
the Airport's budget in the first year of the agreements.
Richard S. Walsh, A.A.E., Director of Aviation David H. Ready, Cjty-1Kd-6ager
Attachments:
Minute Order
Concession Agreement
MINUTE ORDER NO.
AUTHORIZING AWARD OF FIVE FULL - SERVICE AIRPORT RENTAL CAR
CONCESSION AGREEMENTS TO AVIS RENT A CAR SYSTEM, LLC,
BUDGET RENT A CAR SYSTEM, INC., DTG OPERATIONS, INC., THE HERTZ
CORPORATION, VANGUARD CAR (RENTAL USA INC., AND ONE LIMITED
SERVICE AIRPORT RENTAL CAR CONCESSION AGREEMENT TO
ENTERPRISE RENT-A-CAR COMPANY OF LOS ANGELES FOR A TERM OF
THREE YEARS AND TWO ONE YEAR, OPTION PERIODS AT THE
DISCRETION OF THE CITY.
I HEREBY CERTIFY that this Minute Order, authorizing award of five full service
airport rental car concession agreements to Avis Rent A Car System, LLC,
Budget Rent A Car System, Inc., DTG Operations, Inc. (Dollar/Thrifty), The Hertz
Corporation, and Vanguard Car Rental USA Inc. (National/Alamo), and one
limited service airport rental car concession agreement to Enterprise Rent-A-Car
Company Of Los Angeles for a term of three years and two one year option
periods at the discretion of the City was approved by the City Council of the City
of Palm Springs, California, in a meeting thereof held on the 7th day of June,
2006.
JAMES THOMPSON
City Clerk