The Chron has another article on the upcoming City Council food fight over airport concessions.
Mayor Bill White called the food service at Bush Intercontinental Airport’s Terminal C inferior to that of other airports and said the fastest way to improve it was to extend the contract of the company that dishes it out.
White is asking City Council to extend the contract with JDDA Concession Management another eight years rather than go through a time-consuming and potentially nasty competitive bidding process. Council is set to vote on the controversial extension Wednesday.
But a public bid battle is exactly what should happen, said Councilwoman Anne Clutterbuck, who has emerged as the mayor’s chief rival in the current airport “food fight.”
The controversy reveals how White’s management style, with its stated focus on efficiency and consumer value, can conflict with those who see open government as necessarily messy at times.
“I think it’s a terrible precedent,” Clutterbuck said. “The way it is now, it begs the question of why do we bid any contract? To what other contracts will this process be applied?”
[…]
The Terminal C food courts have pulled in an average of $18.5 million a year since 1999, airport officials said. Yoo’s JDDA Concession Management, bought out the contract in 2005. JDDA receives a percentage of the revenues, as does the city.
The deal put forward by White requires JDDA to spend at least $10.5 million to renovate the food courts and to bring in a more experienced airport food management firm, Creative Host Services, for a 49 percent stake. It also would boost the city’s share of concession revenues.
In a statement issued Monday, White said the contract extension was the fastest way to improve Terminal C’s food service, which he said was worse than that at competing airports.
The full statement is printed here. I’ll get back to it in a second.
Looking back at my previous entry, I thought Council Member Clutterbuck’s position was that this wasn’t really a pro forma contract extension, but a new contract, and that because it was a new contract it should be publicly bid. I inferred that had she viewed this as an extension she would not be arguing for opening the bidding up. Now I’m not so sure this is a correct interpretation of her position. I had thought she saw this as an exceptional case, one which should be treated differently. If that was the case, then the point of contention was fairly narrow. Now I’m thinking maybe she means that any big contract like this should be routinely re-bid when it expires instead of allowing for a no-bid extension. I’m not sure what I think about that. Here’s the crux of the Mayor’s argument:
I have proposed to council that we negotiate an extension because our position with the vendor puts us in a unique position to leverage value for the city. Secondly, it is in the best interest of the city to move forward with this proposed agreement that would allow for expedited conversion of Terminal C, without a protracted battle over contracts.
The City of Houston’s professional airport managers and I announced publicly last spring our intention to replace the current food contractor when the contract expires next summer, unless there were big changes in management and millions more invested in upgrades. Council Members were updated along the way and had input. The process was transparent. The contractor complied with tough demands. Aviation professionals tell us the City obtained the benefit of competition before the current inadequate contract expires.
Hard-nosed managers in the private and public sectors often tell vendors they must immediately offer better contract terms or face replacement later on. By removing contract extension as a tool for City negotiations, we would lose an effective tool for improving existing contracts.
It’s not clear to me that you couldn’t maintain that same leverage while going through a re-bid process. I don’t consider myself to be an expert in these matters, but I don’t see anything here that makes me think CM Clutterbuck’s position is misguided. I’m also not convinced that a delay caused by re-bidding would be all that bad – it’s not like we haven’t had mediocre food choices at the airport for as long as we can all remember, and if the end result is a marked improvement, I think most people would consider it to be worth the wait. I don’t think there’s anything terribly wrong with the Mayor’s argument, but neither do I think it’s all that compelling.