Department of Airports Cynthia A. Nichol Director of Airports

County of Sacramento

County Executive

Navdeep S. Gill

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

October 23, 2018 Posted on SMF Website and Sent Via E-Mail

To: Prospective Proposers

From: Jennifer Simkins

Airport Economic Development Specialist Sacramento County Department of Airports (Department)

Subject: Addendum #2 – Automated Concessions Agreement Request For Proposals - Sacramento International Airport

Addendum #2 to the Automated Concessions Agreement Request for Proposal (RFP) at Sacramento International Airport includes answers to questions received prior to and by the

deadline as well as corrections and clarifications to the RFP. 1. Corrections and Clarifications to the RFP and Agreement

a. The timeline is revised as follows: Revised Timeline:

Mandatory Pre-Proposal Meeting: October 16, 2018 Questions Due by: October 18, 2018 at 2:00 p.m. PST Addenda Issued (if necessary): October 23, 2018

Proposals Due: November 13, 2018 by 2:00 p.m. PST Panel Evaluation of Proposals: Week of November 26th

Anticipated Board of Supervisors review/approval of selected proposer(s): January 29, 2019

b. Right to Negotiate on Page 17, Part 2, Section A of the RFP is revised as follows:

Proposer acknowledges that the Selection Committee and the Department retain the right to negotiate any terms and/or conditions of the Agreement and to

negotiate and recommend award of Automated Concessions in locations that differ from locations originally proposed prior to execution of the Agreement by the Board or the Director of Airports. The County reserves the right to negotiate

Agreements with other companies outside of the RFP process, even if such companies did not participate in the RFP process.

c. Proposal Submittal on Page 5, Part 1, Section B of the RFP is revised as follows:

Submit one (1) clearly marked “Original” and four (4) copies, as well as an electronic version (flash drive or CD) of the proposal in a sealed envelope at

the location and by the deadline stated on page 3.

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

d. Agreement Section 2.03 Term is revised as follows: “The term of this Agreement shall be for a period of five (5) Lease Years

commencing on XXXXX, and terminating on XXXXX, hereinafter “Term” or “term”.” (Remainder of Section in Draft Agreement to be eliminated due to conflict with

Section 3.21)

e. Agreement Section 3.21 Early Termination by Concessionaire is revised to add: “e. Should Concessionaire experience a loss of brand rights, Concessionaire shall make every effort to procure a new brand or concept. In the event making such

efforts have failed, Early Termination may apply.

2. Questions received by the October 18, 2018 2:00 p.m. deadline and answers:

a. Question: Is there a requirement for Disadvantage Business Enterprise (DBE)

participation and is there a goal for each project?

Answer: No, DBE participation is not required and while the Department has an

overall goal of 7.9% participation, this goal is not required on each project.

b. Question: Why is there not a mandatory DBE goal?

Answer: The Department’s goal, approved by the FAA, is race-neutral and

therefore it is not required. The Airport is currently preparing the three-year goal.

The 2018 ACDBE goal was seven and nine-tenths percent (7.9%) of gross sales.

The Airport has not assigned an ACDBE requirement to each concession

agreement but encourages ACDBE participation. ACDBE participation is reported

to the FAA annually.

c. Question: Is there a preference for having an ACDBE participation in the

agreement and if so will that reflect in the evaluation of the proposals (Under Qualifications and experience?)? Answer: While the Department encourages all businesses certified as ACDBE to

propose, there is no preferential treatment in the evaluation of the proposals.

d. Question: On the schematics of the terminals and other areas with vending

machines it shows ATM's. Are ATM's part of this bid?

Answer: ATM’s are not part of this RFP. Locations identified for point of

reference only.

e. Question: What are the Airport’s current hours of operation?

Answer: Airport's hours of operation:

The public areas of Terminal A and Terminal B are open 24 hours a day. The concourses close 30 minutes after the last flight has landed. Although this

changes depending on flight schedules, it is currently between midnight and 1 a.m.

TSA checkpoint's hours of operation: The TSA security checkpoints open at 4 a.m. daily and close at 12:30 a.m.,

depending on flight schedules.

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

f. Question: Is it acceptable that the machines accept credit cards only?

Answer: Yes.

g. Question: Is high end candy allowed for the dessert locations?

Answer: Yes. Please keep in mind that the Department is interested in

receiving proposals for concepts and locations that the proposer deems to be the

best fit. All concepts proposed will be evaluated by the committee.

h. Question: Is there a required timeline for changing out product offerings?

Answer: Per the Agreement, Section 2.15, Concessionaire shall provide a

written request to the Director for each location no later than 30 calendar days

prior to the proposed change-out date for approval. Please include in your

proposal the anticipated/proposed timeline for the change out of products.

i. Question: Can product types be changed?

Answer: Per the Agreement, Section 2.12, all products must be approved by

the Director as to the type, quality and price throughout the term of the

Agreement and product changes must be submitted in written request per the

terms in Section 2.15.

j. Question: 2.04 B Percentage Rent (p.7) – Could the following language be added

to this section? “If the concepts are changed at either the County or

Concessionaire’s request, the Director shall approve the Percentage Rent for the

new concept.”

Answer: The proposed percentage rent for all concepts should be referenced in

the written request to add or change product types or concepts.

k. Question: Can you provide the revenue from the vending concessions and the

market share for each brand?

Answer: See Attachment 1.

l. Question: Please provide historical sales by location and concept – ideally you

can show recent sales by month for the past year. Answer: See Attachment 1.

m. Question: Please provide the current revenue share (RENT %) by concept or

category from the current operators.

Answer: See Attachment 1.

n. Question: Is there a minimum rent structure that the airport is looking for? Answer: The Department expects proposers to have performed research of other airports to determine industry standards for percentage fees.

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

o. Question: In reference to Section 3.61 on page 37 of the Draft Agreement, what

is the process for installing equipment and restocking machines?

Answer: Installation of machines will be coordinated with Concessionaire

through the Property Manager. Airport Ops will be notified by Property Manager

and Ops will determine procedure, time and method. The plan will be

communicated through a Special Activity Notice to Concessionaire.

Concessionaire will restock machines

p. Question: Do any of the current vending concessionaires use outside vendors for

maintenance and stocking?

Answer: Yes. That information can be provided upon award of Agreement.

q. Question: Can vending service and re-stock take place during regular business hours? Answer: Yes.

r. Question: Can the machines advertise products that are available in the

machines? Are customer surveys allowed (re: customer satisfaction)?

Answer: The machine may advertise only the products available in the

machines, without audio. Surveys are conducted by a third party and results are

provided to the Department, therefore surveys are not allowed.

s. Question: Can the machines play audio?

Answer: No. Per Section 2.09 of the Agreement, No automated concession

machine installed by Concessionaire shall have any sound producing device as

part of the normal operation thereof.

t. Question: Please confirm the size of the space for the vending machines is 20

square feet.

Answer: Yes. The Department will consider all proposed concepts reasonably

sized near the predetermined 20 square feet.

u. Question: Can the number of SIDA badges be increased?

Answer: There is not a limit to the number of badged employees you may have,

as long as the employees use their badge at least once per week. It is not

permitted to badge a contractor or vendor that performs infrequent visits.

v. Question: Is there storage space available and what is the rental rate?

Answer: Yes, there is storage space available in the lower level of the

terminals. The current rental rate is $39.20 per square foot per year, increasing

by CPI every November. Please include any storage space needs in your proposal.

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

w. Question: Please provide the current retail concession program concepts in

relation to the automated concession locations for each terminal.

Answer: See Attachment 2.

x. Question: Please provide complete list of the total units by concept and location

Answer: See Attachment 2.

y. Question: Does the Department have a preference for any concepts?

Answer: No. While the employee breakrooms are expected to offer food and

beverage and not retail, the Department is interested in receiving proposals from

proposers who are experts in the industry and have done research proving which

concepts are desired by passengers.

z. Question: Since the Department reserves the right to negotiate concepts and

locations, do proposers need to submit new proposals?

Answer: No, the Department will negotiate with the selected concessionaires to

include the new concept/location in the final agreement.

aa. Question: Do you want proposers to recommend or propose additional locations

with this proposal or can the selected operator request new locations during the

term of the agreement?

Answer: The Department will allow proposals for different locations during this

RFP process and will allow the option to receive recommendations during the term

of the awarded agreement(s).

bb. Question: Is the Department interested in receiving proposals for unique

products?

Answer: Yes, the Department will review all proposals and is interested in

providing the best products and services for passengers.

cc. Question: Are the locations shown in the RFP labeled with the products offered in

the current vending program or the desired program?

Answer: The locations shown in the RFP describe what is currently offered.

While there are requirements to offer food & beverage in the employee break

rooms, the Department will review all proposed concepts for all locations.

dd. Question: Does retail experience count towards the required 2 year minimum

experience?

Answer: No. Proposer(s) are required to have at least 2 years’ experience

within the last 5 years operating automated concessions. No substitutions are

allowed.

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

ee. Question: Can you provide the acceptable delivery schedule?

Answer: Per Section 3.19 of the Agreement, Concessionaire will provide to the

Director the arrangements for all locations and it will be reviewed for approval.

Should the Director issue schedules, it will be provided at that time.

ff. Question: For employee breakrooms, can we please get the number of employees accessing breakrooms?

Answer: While there is no specific data available pertaining to employees accessing break rooms, it is estimated that County employee break rooms can be accessed by approximately 20-50 employees per day and Concession break rooms

can be accessed by approximately 40-100 employees per day.

gg. Question: Please confirm the date the FuelRod agreement expires Answer: The FuelRod Agreement expired July 31, 2018 and is currently in hold over.

hh. Question: Although we are two independent entities, for this RFP, if the award is

successful, we may form a Joint Venture for its operation. How then should we answer the Corporation Statement and the Joint Venture Statement as we would only create the Joint Venture if awarded?

Answer: Your answers should be complete, accurate and true to your situation at the time of proposing.

ii. Question: According to Agreement Article 1 Definitions of Gross Revenues, 1.09

d., if our current electronics concept receives fixed marketing funds by the various

electronics brands that are being sold inside the unit, is our concept required then to declare and remit those revenues in a pro-rata format to the airport?

Answer: Fixed marketing revenues should be included in Gross Revenue Receipts since it is a revenue source for the proposer.

jj. Question: Is there an age limit on how OLD the equipment may be? For example, is equipment over 7 years old from date of manufacture permitted for installation?

Answer: The year, make, model and appearance must meet the Directors approval. Machines must be newer than 7 years during the entire term of Agreement.

kk. Question: Agreement Section 2.01 General Scope of Services (p.6): Requires

24/7 being open, no downtime for maintenance, restocking and repair. Can this

language be modified to allow for reasonable downtime to allow for required

maintenance and replenishment?

Answer: Section 2.01 of the Automated Concession Agreement refers to the

Concessionaire operating their concession continuously, 24/7 through the term.

Section 2.09 requires Concessionaire to state what their proposed maintenance

schedule is within their proposal, therefore the section does not require

modification.

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

ll. Question: Agreement Section 2.09 Automated Concession Machines (p.10) –

Payment options – Agreement indicates all machines shall accept cash, credit

cards and provide change. Can this be updated to reflect that the machines

must take credit cards? Most modern automated retail machines take credit

cards only (unlike traditional vending machines).

Answer: Please refer to the answer for Question d.

Relocation – Agreement indicates relocation notification upon 10 days’ notice.

Can this be modified to 14 days? Also, can the following language be added?

“In the event Concessionaire’s brand partner does not reasonably agree to

the relocation, Concessionaire may remove the affected automated retail

machine upon 30 days’ notice. The Director may upon 60 days’ notice require

Concessionaire to install additional automated retail machines […]. Director

acknowledges that any request for additional machines must be approved by

Concessionaire’s brand partners and is subject to machine availability. All

additions, removals, or relocations are on Concessionaire’s sole cost and

expense.“

Answer: No. The timeframes provided in agreement have proven to be

reasonably accommodated by concessionaires.

mm. Question: Please provide clarification between paragraphs 3.22 Early

Termination by Concessionaire and 2.03 Term.

2.03 Allows Tenant to terminate for convenience upon 30 days’ notice.

3.21 Allows Tenant to only terminate in events a-d and for no other reason.

Answer: Please see correction in the Corrections and Clarification of the RFP

and Agreement above.

nn. Question: Does section 2.03 trump section 3.21? Also, can language be added to

section 3.21 to termination rights due to loss of brand?

Answer: Section 2.03 and 3.21 have been revised as referenced above.

oo. Question: Exhibit A-2 – The retail space allows for 20 sq. feet. The wall space is

120” wide. Historically, there was a unit around 32 sq. feet in this space (3 Fl oz

was the Brand Concept). Since precedent of a larger unit in the space has been

established, would a unit slightly larger than 20 sq. feet be considered for the

space?

Answer: The Department will consider all proposed concepts reasonably sized

near the predetermined 20 square feet.

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

Attachment 1 – Historical Financial Data

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Department of Airports Cynthia A. Nichol Director of Airports

County of Sacramento

County Executive

Navdeep S. Gill

Attachment 1 – Automated Concession RFP Addendum 2

Total Gross Sales

Total Revenue Earned

SMF FY 17-18 FYTD 18-19

Retail $205,393.47 $45,737.53

Food and Beverage $250,411.85 $51,177.90

Passenger Service $55,058.00 $9,215.00

Total $510,863.32 $106,130.43

SAC

Food and Beverage $4,627.86 $766.14

Total $4,627.86 $766.14

SMF FY 2017 FYTD 2018

Retail $14,377.54 $3,201.63

Food and Beverage $77,627.62 $15,865.15

Passenger Service $5,505.80 $921.50

Total $97,510.96 $19,988.28

SAC

Food and Beverage $1,434.68 $237.51

Total $1,434.68 $237.51

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

Attachment 1 – Automated Concession RFP Addendum 2

Terminal/Concourse A - Total Sales (rounded) by Concept per Month

SMF-A Food &

Beverage

Food & Beverage Employee

Benefit FuelRod Dippin’ Dots

2017

September 5,868 266 3,491 2,220 1,560

October 7,488 223 4,403 2,140 1,632

November 8,886 256 3,035 1,856 1,724

December 7,247 53 3,657 1,738 2,224

2018

January 5,332 234 3,010 1,760 1,768

February 5,149 171 2,992 1,578 1,420

March 7,703 271 3,249 2,378 $1,549

April 6,116 188 3,199 2,316 $1,444

May 8,751 264 3,461 1,960 1,830

June 5,601 318 3,824 1,880 2,316

July 7,270 217 3,395 1,232 $2,645

August 10,705 178 2,684 2,055 1,858

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

Attachment 1 – Automated Concession RFP Addendum 2

Terminal/Concourse B - Total Sales (rounded) by Concept per Month

SMF-B Food & Beverage

Food & Beverage Employee

Best Buy FuelRod Dippin’ Dots

2017

September 6,426 2,070 12,907 2,538 1,544

October 4,970 1,807 9,560 2,938 1,540

November 7,623 2,912 13,067 2,678 2,044

December 5,576 1,714 16,085 2,136 2,752

2018

January 8,344 1,659 10,120 2,120 1,972

February 5,651 2,265 13,154 1,936 1,732

March 9,831 3,019 11,263 2,618 1,048

April 6,216 2,676 16,055 2,694 484

May 9,146 3,923 14,975 3,038 756

June 7,141 2,789 17,767 2,840 1,698

July 7,915 2,990 17,418 2,890 2,754

August 9,984 3,443 22,241 3,038 2,502

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

Attachment 1 – Automated Concession RFP Addendum 2

Rental Car Facility - Total Sales (rounded) by Concept per Month

SMF-RAC Food & Beverage

Dippin’ Dots

2017

September 5,581 888

October 6,668 644

November 7,426 544

December 5,206 780

2018

January 4,857 564

February 5,022 628

March 7,451 747

April 6,423 803

May 8,190 989

June 7,090 952

July 6,643 1,063

August 8,252 984

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

Attachment 1 – Automated Concession RFP Addendum 2

Sacramento Executive - Total Sales (rounded) by Concept per Month

SAC Food & Beverage

2017

September 288

October 357

November 591

December 137

2018

January 354

February 323

March 405

April 402

May 442

June 346

July 407

August 359

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

Attachment 1 – Automated Concession RFP Addendum 2

Revenue share (RENT %) by concept or category

Benefit – Retail 7%

Best Buy - Retail 7%

FuelRod – Passenger Service 10%

Canteen – Food & Beverage 31%; employee break rooms 0%

Dippin’ Dots – Dessert 33%

6900 Airport Boulevard • Sacramento, California 95837 • phone (916) 874-0719 • fax (916) 874-0636 • www.smf.aero

Attachment 2 – Location Layout

(Attached. Remainder of page intentionally left blank)

TERMINAL A - UPPER LEVEL

TENANT SPACE LAYOUT

Possibility for up to 4 concessions:1 Dessert1 Retail2 Passenger ServiceOther

ATTACHMENT 2

Automated Concessions

FEC-1 FEC-1 FEC-1

FEC-1

FEC-1

FEC-1 FEC-1

FEC-1

FEC-1 FEC-1 FEC-1

FEC-1

FEC-1

FEC-1

FEC-1

FHVCFHVCFHVC FHVC

FUTURE LOUNGE

CONCOURSE B - SECOND FLOOR

TENANT SPACE LAYOUT

Automated Concessions

ATTACHMENT 2

Possibility for up to 9 concessions:3 Dessert3 Retail3 Passenger ServiceOther

UP

FIDS

UP

DN

UP

DN DN

UP

DN

DN

FIDS

03 04

05 06

07 08

DN

FIDS

AE

D 1

AE

D 1

AED 1

FIDS

VM

VM

VM

VM

ATM

DN

05060708

TB

32

72

TB

33

41B

TB

33

69B

TB

33

41A

VM

TERMINAL B - THIRD FLOOR

TENANT SPACE LAYOUT

Possibility for up to 12 concessions:4 Food & Beverage2 Dessert2 Retail2 Passenger Service2 Other

ATTACHMENT 2

Automated Concessions