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HomeMy WebLinkAbout2/19/2003 - STAFF REPORTS (5) f`1`111)� J� DATE: February 19, 2003 TO: City Council FROM: Executive Director-Airports APPROVE PURCHASE OF FOUR RETAIL MERCHANDISE UNITS (RMUs) FROM CAB-TECH MANUFACTURING, INC. , TOTAL PRICE NOT-TO-EXCEED $82,500. RECOMMENDATION: That City Council approve the purchase of four new RMUs (concession carts) from Cab-Tech Manufacturing,at a unit price of$17,200 plus applicable taxes, delivery and customization charges for a total amount not to exceed $82,500. SUMMARY: Staff of the Palm Springs International Airport have been studying ways to improve passenger services and enhance revenue-generating activities at the Airport. Staff believes that significant improvement can be made to both passenger service delivery and revenue generation by replacing the existing RMUs and competing the resulting concession opportunities. BACKGROUND: Staff has identified a portion of the Airport's concession program as an area where improvement can be achieved. The airport's retail concession program consists chiefly of 2 parts: the terminal shops currently under contract to Paradies Shops, and the concession carts, or so called "retail merchandise units" (RMU). Staff believes that significant improvement can be made to both passenger service delivery and revenue generation by replacing the existing RMUs and competing the resulting enhanced concession opportunities. Staff's conclusion was based on examination of the current program and research of similar programs at other airports. Particular emphasis was given to examining the award-winning concession program at Portland International Airport(PDX). The Deputy Director of Administration worked with PDX staff to identify areas for improvement in the airport's concession program. The chief opportunity identified was in re-vamping the RMU portion of the program. The proposed enhancements to the RMU program can be achieved by procuring new RMUs and by competing the resulting concession opportunities. Airport staff, working together with staff from the Department of Procurement & Contracting, developed a RFP for procuring four new RMUs. RFP 02-03 was issued and sent to four suppliers known to fabricate RMUs. Two proposals were received by the closing date and time. Cab-Tech Manufacturing of Portland, Oregon was the highest evaluated proposerwhen scored on the evaluation criteria which were: design of proposed equipment, qualifications and experience of offeror, options and accessories available, consistency of design to the Airport, architectural elements, warranty, delivery time and proposed cost. Approve purchase of RMUs Page 2 February 5, 2003 Staff recommends City Council approve the purchase of four new RMUs from Cab-Tech Manufacturing,at a unit price of$17,200 plus applicable taxes,delivery and customization charges (see below) for a total amount not to exceed $82,500. The second step of this effort is to solicit proposals from concessionaires to operate the RMUs.An RFP is currently being developed for this purpose. The goal of this RFP will be to offer a variety of merchandise and services to visitors and enhance revenues to the Airport. Consideration must be given to Paradies Shops to prevent a dilution of their investment in the Airport's concession program by undercutting their position with the RMU operators. The RMUs proposed by Cab-Tech can be equipped for a variety of concession applications. Because the City has not yet selected RMU operators, staff is requesting City Council approve award to Cab-Tech in an amount not to exceed$82,500. After taxes and delivery as indicated,this will provide staff with about$1,200 per unit to appropriately equip or customize each RMU for each firm selected for concession operators (via the City CFP). From a revenue standpoint, the airport stands to gain between $18,000 to $40,000 annually with the operation of a minimum of four Retail Merchandise Units. Currently, the airport owns two outdated RMUs. The new units will provide significant improvement to merchandise display capabilities, appearance, functionality and security. The Airport Commission has reviewed and approved the proposed acquisition. Funds for the RMUs is are available in the Airport Development, Specialized Equipment Account, 415-6400-50015. ALLEN F. SMOO , A.A.E. HAROLD E. GOOD Executive Director - Airports Director of Procurement & Contracting APPROVED: City Manager Attachment: Minute Order REVIEWED BY DEPT. OF FINANCE _Z_ spa MINUTE ORDER NO. APPROVING THE PURCHASE OF FOUR NEW RMUS (CONCESSION CARTS) FROM CAB-TECH MANUFACTURING, AT A UNIT PRICE OF $17,200 PLUS APPLICABLE TAXES, DELIVERY AND CUSTOMIZATION CHARGES FOR A TOTAL AMOUNT NOT TO EXCEED $82,500. I HEREBY CERTIFY that this Minute Order approving the purchase of four new RMUs (concession carts)from Cab-Tech Manufacturing, at a unit price of$17,200 plus applicable taxes, delivery and customization charges for a total amount not to exceed $82,500., was adopted by the City Council of the City of Palm Springs, California; in a meeting thereof held on the 19th of February, 2003. PATRICIA A. SANDERS City Clerk hwoo� -3-