TO: HONOR ABLE MAYOR FROM: John Aitken
AND CITY COUNCIL
S
UBJECT: SEE BELOW DATE: April 24, 2023
Approved Date
5/8/23
CO
UNCIL DISTRICT: 6
S
UBJECT: AIRPORT CONCESSION DISADVANTAGED BUSINESS ENTERPRISE PROGRAM FOR FEDERAL FISCAL YEARS 2024-2026
RE
COMMENDATION
A
dopt a resolution:
(
a) Approving the proposed Airport Concession Disadvantaged Business Enterprise program update in accordance with the Federal Aviation Administration regulations for the San José Mineta International Airport;
(b) Approve the three-year Airport Concession Disadvantaged Business Enterprise race- neutral goal of 7.7% for all San José Mineta International Airport concessions, other than car rentals, for Federal Fiscal Years 2024-2026;
(c) Approve the three-year Airport Concession Disadvantaged Business Enterprise race- neutral goal of 0.40% for rental cars for
Federal Fiscal Years 2024-2026;
(d) Authorizing the City Manager to submit the three-year Airport Concession Disadvantaged Business Enterprise program to the Federal Aviation Administration; (e) Authorizing the City Manager to make revisions to the three-year ACDBE plan as requested by the Federal Aviation Administration.
S
UMMARY AND OUTCOME
A
pproval of the updated Airport Concession Disadvantaged Business Enterprise (ACDBE) program and submission to the Federal Aviation Administration (FAA) results in the City being compliant with ACDBE program requirements, allowing the City to remain eligible to receive an estimated $66.5 million in FAA and United States Department of Transportation grants for San José Mineta International Airport (Airport) development and operations between 2024 and 2026.
COUNCIL AGENDA: 5/23/23
FILE: 23-736
ITEM: 2.10
HONORABLE MAYOR AND CITY COUNCIL
May 1, 2023
Subject: Airport Concession Disadvantaged Business Enterprise Program for Federal Fiscal Years 2024-2026
BACKGROUND
T
he ACDBE program was created to minimize concerns related to minority discrimination in the award and administration of concession opportunities at airports. Adherence to ACDBE program regulations is required to remain eligible to receive federal grants for airport development from the FAA’s Airport Improvement Program (AIP).
U
nder the FAA regulations, the City is required to submit an updated ACDBE participation plan every three years that identifies new concession opportunities, potential ACDBE participants, and new percentage targets for ACDBE participation. The last ACDBE participation plan submitted to the FAA was for Federal Fiscal Years (FFY) 2021 through 2023. The FFY begins on October 1 and ends on September 30 of the following year.
T
he purpose of the ACDBE program is:
1. T
o ensure nondiscrimination in the award and administration of opportunities for concessions by airports receiving FAA financial assistance;
2. To create a level playing field on which ACDBEs can compete fairly for opportunities for concessions;
3. To ensure that the ACDBE program is narrowly tailored in accordance with applicable law;
4. To ensure that only firms that fully meet applicable eligibility standards are permitted to participate as ACDBEs at the Airport;
5. To help remove barriers to the participation of ACDBEs in opportunities for concessions at the Airport; and
6. To provide appropriate flexibility to the City in establishing and providing opportunities for ACDBEs at the Airport.
D
efinitions
AC
DBE
Under the ACDBE regulations, an airport concession disadvantaged business enterprise means a for-profit small business concern that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged or, in the case of a corporation, in which 51 percent of the stock is owned by one or more such individuals. The ACDBE regulations further require that one or more of the socially and economically disadvantaged individuals who own it must control the management and daily business operations of the company claiming ACDBE status and be independent.
A
irport Concessions
ACDBE regulations define concessions to include businesses located on an airport that are engaged in the sale of consumer goods or services to the public under an agreement with the owner of the airport, the non-airport owner or lessee of a terminal on the airport, or another concessionaire. Covered concessions also include management contracts and subcontracts, web- based or other electronic business in a terminal or which passengers can access at the terminal,
HONORABLE MAYOR AND CITY COUNCIL
May 1, 2023
Subject: Airport Concession Disadvantaged Business Enterprise Program for Federal Fiscal Years 2024-2026
an advertising business that provides advertising displays or messages to the public on the airport, or a business that provides goods and services to concessionaires.
M
arket Area
The ACDBE program regulations define market area as the geographical area in which the substantial majority of firms which seek to do concessions business with the airport are located and where they receive the substantial majority of concessions related revenues.
Q
uotas or Set-Asides Prohibited
The ACDBE regulations expressly prohibit the use of quotas or set asides in the ACDBE program.
R
ace-Conscious Measures
The ACDBE program must provide for the use of race-conscious measures when race-neutral measures, standing alone, are not projected to be sufficient to meet the City’s overall ACDBE goal. The City of San José is subject to the rulings of the Ninth Circuit Court of Appeals, which established/identified specific rules and situations before a jurisdiction can utilize race-conscious measures. When a race-conscious measure is adopted, the following are examples of race- conscious measures that are acceptable under the ACDBE regulations:
• E
stablishing concession-specific goals for particular concession opportunities; or • Negotiation with a potential concessionaire to include ACDBE participation, through direct ownership arrangements or measures, in the operation of the concession.
R
ace-Neutral Measures
In implementing its ACDBE program, the City is first required to use race-neutral measures to the maximum extent possible to achieve its ACDBE goals. Examples of race-neutral measures include:
• L
ocating and identifying ACDBEs and other small businesses that may be interested in participating as Airport concessionaires;
• Structuring concessions so as to encourage and facilitate the participation of ACDBEs; • Providing technical assistance to ACDBEs in overcoming limitations, such as inability to obtain bonding or financing; and
• Establishing a business development program, technical assistance program, or taking other steps to foster ACDBE participation in concessions.
S
mall Business Concern
In order to qualify as an ACDBE, a firm must also qualify as a small business concern. As a general rule, the ACDBE regulations treat a firm as a small business eligible to be certified as an ACDBE if its gross receipts, averaged over the firm’s previous three fiscal years, do not exceed $56.42 million. The following types of businesses have different ACDBE size standards:
• Banks and financial institutions: $1 billion in assets; • Car rental companies: $75.23 million average annual gross receipts over the firm’s three previous fiscal years;
HONORABLE MAYOR AND CITY COUNCIL
May 1, 2023
Subject: Airport Concession Disadvantaged Business Enterprise Program for Federal Fiscal Years 2024-2026
• Automobile dealers: 350 employees
S
ocially and Economically Disadvantaged
Socially and economically disadvantaged individual means any individual who is a citizen, or lawfully admitted permanent resident, of the United States and who meets one or more of the following conditions and does not have a personal net worth exceeding $1.32 million:
• A
ny individual to be a socially and economically disadvantaged individual on a case-by- case basis;
• Any individual in the following groups whose members are presumed to be socially and economically disadvantaged:
o "Black Americans," which includes persons having origins in any of the Black racial groups of Africa;
o "Hispanic Americans," which includes persons of Mexican, Puerto Rican, Cuban, Dominican, Central or South American, or other Spanish or Portuguese culture or origin, regardless of race;
o "Native Americans," which includes persons who are American Indians, Eskimos, Aleuts, or Native Hawaiians;
o "Asian-Pacific Americans," which includes persons whose origins are from Japan, China, Taiwan, Korea, Burma (Myanmar), Vietnam, Laos, Cambodia (Kampuchea), Thailand, Malaysia, Indonesia, the Philippines, Brunei, Samoa, Guam, the United States Trust Territories of the Pacific Islands (Republic of Palau), the Commonwealth of the Northern Marianas Islands, Macao, Fiji, Tonga, Kirbati, Juvalu, Nauru, Federated States of Micronesia, or Hong Kong; o "Subcontinent Asian Americans," which includes persons whose origins are from India, Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal, or Sri Lanka; o Women; and
o Any additional groups whose members are designated as socially and economically disadvantaged by the Small Business Administration, at such time as the Small Business Administration designation becomes effective.
G
eographic Preferences
ACDBE regulations prohibit the use of geographic preferences as a factor in obtaining business or doing business as, or with, an airport concession.
ANAL
YSIS
T
he City is required to prepare an ACDBE participation program update for the Airport every three years (Please see Attachment - Federal Aviation Administration (FAA) Overall Airport Concessionaire Disadvantage Business Enterprise (ACDBE) Goal-Setting Methodology - for the complete program goal updates). Targets are prepared to estimate the percentage of concession revenues that will be performed by ACDBEs in the absence of discrimination. The first target is for all concessions other than rental cars and the second target is for rental cars. The reason for setting separate ACDBE participation targets is that the FAA
HONORABLE MAYOR AND CITY COUNCIL
May 1, 2023
Subject: Airport Concession Disadvantaged Business Enterprise Program for Federal Fiscal Years 2024-2026
has determined that there are differences between car rental concessions and other types of concessions. Each target must cover a three-year period, with annual reviews and reporting to the FAA, to ensure that the Airport is tracking the ACDBE participation.
P
ursuant to FAA regulatory requirements, the proposed ACDBE participation targets were determined based on the marketplace and on demonstrable evidence of the availability of ready, willing, and able ACDBE firms relative to all businesses that were also ready, willing, and able to participate in the Airport’s concession opportunities.
T
he Airport contracted with consultant company, GCAP Services Group LLC, to determine ACDBE participation goals for the Airport for FFY 2024-2026. In determining these overall ACDBE participation goals, the consultant closely followed the United States Department of Transportation Disadvantaged Business Enterprise program regulations set forth for goal setting in 49 Code of Federal Regulations Part 23, including a two-step goal-setting methodology identified in 49 Code of Federal Regulations Section 23.51.
T
o determine the overall ACDBE participation goal, the consultant is required to:
• Examine the types of concession opportunities that the Airport anticipates for the plan period;
• Base requirements on the Federal laws, regulations, and guidance set forth by the United States Department of Transportation;
• Base goals on evidence of ACDBE firms that are “ready, willing, and able”; and, • Narrowly tailor the goals to the evidence.
T
he ACDBE participation targets are based on demonstrable evidence and using formulas approved by the FAA. The Airport’s ACDBE concession participation targets for FFYs 2024 through 2026 are 7.7% for concessions other than rental cars and 0.40% for rental cars. Given the lack of ACDBE rental car companies, rental car ACDBE goals rely on the purchases of goods and services from ACDBE businesses, which are often limited given the national and/or regional supply chain of car rental companies.
T
he City proposes to meet the overall goal by using the race-neutral methods for ACDBE and small business participation in accordance with 49 Code of Federal Regulations 23.
T
he Airport will use the following methods to encourage ACDBE participation:
• E
ncourage ACDBE participation in all new Airport concession request for proposals; • Prior to granting an extension or option to renew an agreement, assess the potential for new ACDBE participation;
• Require monthly ACDBE participation reporting by concessionaires; • In the event that opportunities for new entrants arise, identify ACDBEs and other small businesses that may be interested in participating as Airport concessionaires and conduct outreach;
• Encourage ACDBE certification of concessionaires currently operating at the Airport that are ACDBE eligible;
HONORABLE MAYOR AND CITY COUNCIL
May 1, 2023
Subject: Airport Concession Disadvantaged Business Enterprise Program for Federal Fiscal Years 2024-2026
• Encourage prime concessionaires with new opportunities to include ACDBE participation; and
• Request that concessionaires identify ACDBE goods and services providers and report the amount of those transactions.
T
he City can be penalized or treated as being in noncompliance by the FAA only if the City fails to administer its ACDBE program at the Airport in good faith. If ACDBE participation falls short of the targets, the FAA may require the City to provide a statement explaining why the overall targets were not met and what is being done to improve ACDBE participation in Airport concessions.
T
he City held a stakeholder meeting on April 6, 2023, to present these proposed goals to the community and to seek input about the availability of disadvantaged and non-disadvantaged opportunities, the effects of discrimination on opportunities for ACDBEs, and the City’s efforts to establish a level playing field for the participation of ACDBEs.
T
he City also plans to present this same presentation directly to the Airport Commission on May 8, 2023, to ensure all stakeholder are given opportunity to review and comment on the proposed goal.
F
ollowing the consultation with stakeholders, notice of the proposed 7.7% goal for concessions other than rental cars and 0.40% goal for rental cars was published by the Airport Minority Advisory Council and on the Airport’s websites. Additionally, the presentation was also posted to the Airport’s website for all stakeholders to see even if they did not make it to the original presentation. Furthermore, the Airport and its consultant conducted additional outreach to multiple trade organizations, including
Airport Minority Advisory Council, Airport Council
International –North America, and American Association of Airport Executives.
R
acial Equity Impact Analysis
United States Department of Transportation set up the ACDBE and Disadvantage Business Enterprise programs to help remedy discrimination along with past discrimination in contracting with transportation agencies. Considering a significant portion of the ACDBEs and Disadvantaged Business Enterprises hold their certifications based on race, this program has a direct racial equity impact.
Th
ese programs seek to help lower barriers of entry into contracts for many businesses that are owned 51% or more by a disadvantaged owner including but not limited to women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian-Pacific Americans, or other minorities found to be disadvantaged by the United States Small Business Administration.
Th
erefore, the ACDBE program at the Airport takes steps along with the general federal program to help these ACDBE businesses receive opportunities to bid on contracts at the Airport. This is done through outreach, networking, pre-proposal meetings, and training events. These efforts strive to help these business owners increase their awareness of Airport opportunities, including
HONORABLE MAYOR AND CITY COUNCIL
May 1, 2023
Subject: Airport Concession Disadvantaged Business Enterprise Program for Federal Fiscal Years 2024-2026
how to apply for and to receive certification for Disadvantaged Business Enterprise or ACDBE status. This also allows them to create teams with other ACDBEs or primes and strengthen their abilities to get contracts they may not qualify for alone. The Airport also makes available an Airport ACDBE and Disadvantaged Business Enterprise liaison, who will include these firms in communications for future opportunities and to engage with these firms for when they have questions. The liaison is available directly via a call or email or even by attending any of the many events. This allows the liaison to provide insight via comments, concerns, and questions to better lower the barriers and help find additional ways to even the playing field in participating in Airport contracts.
E
VALUATION AND FOLLOW-UP
T
his memorandum will not require any follow-up from staff.
COORDINATION
T
his memorandum has been coordinated with the City Attorney’s Office and City Manager’s Budget Office.
P
UBLIC OUTREACH
T
his memorandum will be posted on the City’s Council Agenda website for the May 23, 2023 City Council meeting.
T
he Airport held a stakeholder meeting on April 6, 2023, to present the ACDBE goal setting process and subsequent goals and to seek community input. A notice of the proposed goal and methodology was published on March 7, 2023 on the Airport’s website, Federal Airport Administration’s Airport goal page of the FAA website, and the Airport Minority Advisory Council’s Events Page. Additionally, this notice was forwarded out to ACDBE’s in our market area, all vendors and parties on our interested party list, that includes primes, small and local businesses, and the local Chambers of Commerce.
T
he notice informed the public of the upcoming ACDBE FFY 2024-2026 proposed goal for the Airport. The notice to the public included information on:
- W
ho to contact about the goal
- How to inspect the details about the goal and methodology - The deadline for providing comments
- N otice of the April 6, 2023 stakeholder meeting
T
he stakeholder meeting that took place on April 6, 2023 was presented by Nicole Chang, our ACDBE consultant from GCAP Services Group LLC. Nicole presented on the proposed goal and methodology.
HONORABLE MAYOR AND CITY COUNCIL
May 1, 2023
Subject: Airport Concession Disadvantaged Business Enterprise Program for Federal Fiscal Years 2024-2026
A
n additional presentation will take place by GCAP Services Group LLC to the Airport Commission on May 8, 2023.
T
he presentation was also shared on the Airport website to ensure stakeholders had access to the presentation even if they could not attend either presentation.
N
o comments have been received as of the writing of this memorandum.
O
nce approved by the City, the ACDBE program will be posted to the Airport website and submitted to the FAA.
CO
MMISSION RECOMMENDATION AND INPUT
T
he Airport Commission will be briefed at a public meeting on May 8, 2023 on the ACDBE goal setting process.
CE
QA
N
ot a project, File No. PP17-008, General Procedure and Policy Making resulting in no changes to the physical environment.
P
UBLIC SUBSIDY REPORTING
T
his item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution. /
s/
John Aitken, A.A.E
Director of Aviation
Fo
r questions, please contact Magdelina Nodal, Senior Analyst, at [email protected] or (408) 392-3673.
AT
TACHMENT: Federal Aviation Administration (FAA) Overall Airport Concessionaire Disadvantage Business Enterprise (ACDBE) Goal-Setting Methodology Triennial ACDBE Goal Methodology for FFY 2024-2026
1 Attachment
Triennial ACDBE Goal Methodology for FFY 2024-2026
2 Federal Aviation Administration (FAA)
Overall Airport Concessionaire
Disadvantage Business Enterprise (ACDBE)
Goal-Setting Methodology
Fiscal Federal Years (FFY) 2024-2026
Goal Period
S
ubmitted in fulfillment of:
Title 49 Code of Federal Regulations Part 26
Triennial ACDBE Goal Methodology for FFY 2024-2026
3 Contents
1 Introduction .................................................................................................................................................................... 4
1.1 Market Area ............................................................................................................................................................ 4 2 ACDBE GOAL METHODOLOGY FOR NON-CAR RENTAL CONCESSIONS FOR FFYs 2024-2026 ......................................... 4
2.1 Current Non-Car Rental Concessions ...................................................................................................................... 4
2.1 Step 1: Determination of the Base Figure ............................................................................................................... 5
2.2 Step 2: Adjusting the Base Figure ........................................................................................................................... 6 Historical Non-Car Rental ACDBE Participation .............................................................................................................. 7 Disparity Studies ............................................................................................................................................................. 7 Other Considerations ...................................................................................................................................................... 7
2.3 ACDBE Triennial Goal for Non-Car Rental Concessions FFY 2024-2026 ................................................................. 7
2.4 Race -Neutral Measures .......................................................................................................................................... 8 3 ACDBE GOAL METHODOLOGY FOR CAR RENTAL CONCESSIONS FOR FFYs 2024-2026 .................................................. 8
3.1 Current Car Rental Concessionaires ........................................................................................................................ 8
3.2 Step 1: Determination of Base Figure ..................................................................................................................... 9
3.3 Step 2: Adjusting the Base Figure ........................................................................................................................... 9 Historical ACDBE Participation ........................................................................................................................................ 9 Disparity Studies ........................................................................................................................................................... 10 Other Considerations .................................................................................................................................................... 10
3.4 ACDBE TRIENNIAL GOAL FOR CAR RENTAL CONCESSIONS FFY 2024-2026 .......................................................... 10
3.5 Race -Neutral Measures ........................................................................................................................................ 10 4 Public Participation ....................................................................................................................................................... 11 ATTACHMENT 1: Website Notification ................................................................................................................................. 12 Attachment 2: Sample E-Blast .............................................................................................................................................. 14 Attachment 3: Consultative Process Summary ..................................................................................................................... 15 ATttachment 4: Webinar Presentation ................................................................................................................................. 19 Triennial ACDBE Goal Methodology for FFY 2024-2026
4 1 INTRODUCTION
The San Jose Mineta International Airport (Airport), as a recipient of federal funds, is required under 49 Code of Federal Regulations (CFR) Part 23 to establish an Airport Concessionaire Disadvantaged Business Enterprise ( ACDBE) program.
Under these regulations, recipient airports are required to establish goals for ACDBE participation in airport concessionaire opportunities if concessionaire revenues annually exceed prescribed amounts. The goals are determined for a three (3) year period on a triennial basis. The following sections detail the methodologies used to determine ACDBE participation goals for car rental concessionaires and non-car rental concessionaires. The methodology for setting each goal includes a determination of a base figure, followed by an adjustment to that base figure, and recognition of several factors.
1.1 Market Area
The Airport’s market area is the geographical area in which the substantial majority of firms which seek to do concessions business with the Airport and in which the firms receive a substantial majority of concessions related revenues are located.
The Airport has defined their market area as the State of California. 2 ACDBE GOAL METHODOLOGY FOR NON-CAR RENTAL CONCESSIONS FOR FFYS 2024-2026 Based on historical data, the Airport annually has non -car rental con cession revenues greater than $200,000. Because revenues exceed this amount, according to Part 23, the Airport must establish a goal for non -car rental ACDBE participation. The goal is intended to cover the three (3) year period for Federal Fiscal Years (FFYs) 2024-2026. The following subsections outline the methodology used to determine the goal for non-car rental ACDBE participation.
2.1 Current Non-Car Rental Concessions
Currently the Airport has contracts with nineteen (19 ) non-car rental concessionaires. These include retail and food & beverage. The concessionaire categories are listed below in Table 1 with fiscal year gross receipts. The Airport’s current gross receipts for non-car rental concessionaires exceeds $200,000 as shown in Table 1 below.
Table 1
Non-Car Rental Concessionaire
Gross Receipts for
FFY 2022
Host (Food and Beverage) $23,511,466
AMS-SJC Joint Venture with JR Lester $17,464,489
WDFG NA (World Duty Free Goods) $418,166
SSP America Inc. (Food and Beverage) $10,826,080
PRI Provenzano Resources $536,983
Alclear $12,530,060
ALD Development Corp (both locations) $3,664,275
Drop Water (was listed as part of canteen but
they are their own company)
$12,700
Clear Channel Advertising $7,014,870
Certified Folder $47,413
ReadyCARD $13,633
Smarte Carte-Luggage Carts $242,641
Smarte Carte-Massage Chairs $140,077
Bank of America $0
Commpass Group USA, Inc DBA Canteen $61,928
Prepango, LLC $7,481
SecurityPoint Media, LLC $162,000
Total $76,654,262
Triennial ACDBE Goal Methodology for FFY 2024-2026
5 Source: San Jose Mineta International Airport Accounting
2.1 Step 1: Determination of the Base Figure
To establish the Base Figure of the relative availability of ACDBEs to all comparable firms (ACDBEs and n on-ACDBEs) available to bid or propose on concessions, the Airport followed one of the five prescribed federal goal- setting methodologies in accordance with the 49 CFR Part 23 regulations. This was accomplished by accessing the California Unified Certification Directory of Certified ACDBE Firms and the 2020 U.S. Census Bureau Coun ty Business Patterns Database. Comparisons were made within the Airport market area and by the specified industries and types of businesses identified in Table 2.
Table 2 represents the projected gross receipts for each concessionaire type for Federal Fis cal Years 2024-2026. Table 2 also shows the concessionaire type weighting. This percentage is the amount of each concessionaire type divided by the total projected gross receipts for FFY 2024-2026.
Table 2
NAICS
Code Concessionaire Type
Projection of
Gross Receipts for
FFY 2024-2026
% by
Concessionaire
Type
451212 News dealers and newsstands $19,611,091 7.7%
453220 Gift, novelty, and souvenir stores $18,609,753 7.3% 454210 Vending machine operators $304,806 0.1%
488119 Other airport operations $19,945,519 7.8%
488190 Other support activities for air transportation $19,945,519 7.8% 541850 Outdoor advertising $22,332,730 8.7%
541890 Other services related to advertising $515,748 0.2% 722310 Food service contractors $30,902,490 12.1%
722410 Drinking places (alcoholic beverages) $11,833,093 4.6% 722511 Full-service restaurants $32,111,375 12.5%
722513 Limited-service restaurants $16,397,691 6.4%
722515 Snack and nonalcoholic beverage bars $49,992,087 19.5% 812199 Other personal care services $13,482,459 5.3%
Total $255,984,360 100.00%
Source: San Jose Mineta International Airport Accounting To determine the base figure for the relative availability of ACDBEs within the market area, the Airport calculated the ratio of ready, willing and able ACDBE firms to all firms (ACDBEs and non -ACDBEs) located in the market area for each of the concessionaire types.
∑ Number of Ready, Willing, and Able ACDBEs X Concessionaire Type % = ACDBE Relative Availability Number of All Available Firms •For the numerator: California Unified Certification Program Directory of Certified ACDBE Firms •F
or the denominator: 2020 U.S. Census Bureau’s County Business Pattern (CBP) Database Triennial ACDBE Goal Methodology for FFY 2024-2026
6 The Base Figure resulting from this weighted calculation is shown in Table 3 below.
T
able 3
Concessionaire Type NAICS
Code ACDBEs1 All
Firms2
ACDBE
Relative
Availability3
Weighting
%4
Adjusted
Base
Figure
News dealers and newsstands 451212 38 79 48.1% 7.7% 3.7% Gift, novelty, and souvenir stores 453220 73 2,042 3.6% 7.3% 0.3% Vending machine operators 454210 8 239 3.3% 0.1% 0.0% Other airport operations 488119 4 186 2.2% 7.8% 0.2%
Other support activities for air
transportation
488190 1 432 0.2% 7.8% 0.0%
Outdoor advertising 541850 7 277 2.5% 8.7% 0.2%
Other services related to
advertising
541890 7 782 0.9% 0.2% 0.0%
Food service contractors 722310 44 2,504 1.8% 12.1% 0.2% Drinking places (alcoholic
beverages)
722410 18 3,166 0.6% 4.6% 0.0%
Full-service restaurants 722511 47 31,036 0.2% 12.5% 0.0% Limited-service restaurants 722513 67 31,771 0.2% 6.4% 0.0% Snack and nonalcoholic beverage
bars
722515 32 11,707 0.3% 19.5% 0.1%
Other personal care services 812199 6 2,884 0.2% 5.3% 0.0% Total ACDBE Goal Figure 4.7%
2.2 Step 2: Adjusting the Base Figure
Upon establishing the Base Figure, the Airport reviewed and assessed other known evidence potentially impacting the relative availability of ACDBEs within the market area, in accordance with prescribed narrow tailoring provisions set forth under 49 CFR Part 23.51 Step 2 ACDBE Goal Adjustment guidelines. 1 Total ACDBEs located in the market area from the California Unified Certification Program (CUCP) database . 2 2020 U.S. Census Bureau County Business Pattern Database. 3 Percent of Estimated Revenues by Concessionaire Type (Table 2). 4 Base Figure = (ACDBE/All Firms) x weighting
Triennial ACDBE Goal Methodology for FFY 2024-2026
7 Historical Non-Car Rental ACDBE Participation
Past ACDBE participation attainment provides demonstratable evidence of ACDBE availability and capacity to perform on the Airport’s non -car rental concessions. Table 4 shows the ACDBE participation achieved on non- car rental concessionaires for the last three (3) federal fiscal years.
T
able 4
Non-Car Rental
ACDBE Goals
Non-Car Rental
ACDBE
Participation
FFY 2020 10.64% 16.07%
FFY 2021 10.10% 8.19%
FFY 2022 10.10% 10.74%
Median ACDBE Participation
Within the Last Three (3) Years 10.74%
Source: Overall ACDBE Triennial Goal Methodologies for FFY 2018-2020 and FFY 2021-2023 and Uniform Reports for FFY 2020-2022.
To arrive at an overall goal, the Airport added the Step 1 ACDBE Base Figure with the Step 2 Adjustment Figure and then averaged the total.
Non-Car Rental
ACDBE Base
Figure
+
Non-Car Rental Median ACDBE
Participation Within the Last
Three (3) Years
÷ 2 = Non-Car Rental
ACDBE Triennial Goal
(4.7%) (10.74%) (7.7%)
Disparity Studies
The Airport has not conducted a Disparity Study nor are they aware of any relevant studies of a similar size and location.
Therefore, no adjustment was made to the base figure based on disparity study data.
Other Considerations
The Airport is not aware of any other factors or adverse considerations that would have a material effect on ACDBE availability within the Airport marketplace or on ACDBE’s ability to participate (meeting bonding, insurance and financial requirements) in the Airport’s FAA -assisted contracting program. Therefore, no further consideration toward a goal adjustment was made. The Airport will continue to explore and consider all available evidence that materially would affect the opportunities for ACDBEs to form, grow, and compete in the Airport’s concessionaire program.
2.3 AC
DBE Triennial Goal for Non-Car Rental Concessions FFY 2024-2026 The Airport Non-Car Rental ACDBE Triennial Goal for FFY 2024-2026 is 7.7%.
The Airport must project the amount of the goal that will be met with both race-conscious and race-neutral means. The Airport operates a strictly race -neutral ACDBE program and will meet all of the goal with race -neutral means, as shown below.
Triennial ACDBE Goal Methodology for FFY 2024-2026
8 Non-Car Rental ACDBE Goal 7.7%
Race-Conscious Projection 0.0%
Race-Neutral Projection 7.7%
2.4 Race -Neutral Measures
49 CFR Part 23 requires that airports meet the maximum feasible portion of their overall ACDBE goals utilizing race-neutral means. Race -neutral participation includes any time that an ACDBE wins a contract through customary competitive procedures. Race-conscious methods are those that are focused specifically on assisting only ACDBEs, such as establishing a contract goal of ACDBE participation. Although the airport has not achieved its non-car rental participation goals in the past, the Airport will provide greater effort in executing the following race-neutral measures to help achieve the non-car rental ACDBE goal:
• Locating and identifying ACDBEs and other small businesses who may be interested in participating as concessionaires.
• Notifying ACDBEs of concession opportunities and encouraging them to compete, when appropriate. • When practical, structuring concession activities so as to encourage and facilitate the participation of ACDBEs. • Ensuring that competitors for concession opportunities are informed during pre-solicitation meetings about how the Airport’s ACDBE program will affect the procurement process; • Providing technical assistance to ACDBEs in overcoming limitations, such as obtaining bonding or financing. 3 ACDBE GOAL METHODOLOGY FOR CAR RENTAL CONCESSIONS FOR FFYS 2024-2026 The Airport annually has car rental concessionaire revenues greater than $200,000. Because revenues exceed this amount, according to Part 23, the Airport must establish a goal for car rental ACDBE participation. The goal is intended to cover the three (3) year period for FFY 2024 -2026. The following subsections outline the methodology used to determine the goal for non-car rental ACDBE participation.
3.1 Current Car Rental Concessionaires
Current car rental concessionaires and their FFY 2022 revenues are listed in Table 5 below.
Table 5
Concessionaire FFY 2022
Gross Revenue
Contract
Commencement Date
Contract
Termination Date
Avis Budget Car Rental, LLC $48,428,490 February 18, 2008 June 30, 2030 DTG Operations, Inc. $12,051,274 February 19, 2008 June 30, 2030 EAN, LLC dba Enterprise Rent a Car $50,634,582 February 19, 2008 June 30, 2030 Fox Renta A Car, Inc. $7,332,855 February 19, 2008 June 30, 2030 Hertz Corporation $26,470,400 February 19, 2008 June 30, 2030 NOCAL Rentals, Inc. dba Payless Car
Rental
$944,599 April 5, 2012 June 30, 2030
Sixt Rent a Car $8,150,607 January 31, 2013 June 30, 2030 Source: San Jose Mineta International Airport’s Car Rental Concessionaires’ Contractor Agreements Since the car rental concessionaires at the Airport has annually seen average revenues in excess of $200,000 over the past three years, the Airport is required to establish a goal of ACDBE participation for car rental concessions.
Triennial ACDBE Goal Methodology for FFY 2024-2026
9 3.2 Step 1: Determination of Base Figure
The methodology used to determine a base fi gure of car ACDBE rental participation is to obtain the number of ready, willing and able ACDBE firms that provide car rental services or provide goods and services to car rental concessionaires and dividing that number by the total number of ready, willing and able firms in the market area. For the purpose of determining this goal, the market area is considered to be the State of California as car rental firms generally operate on a regional basis, shifting cars and resources among a region as needs dictate.
Table 6 below details the types of firms that are expected to be able to provide car rental sales and or goods and services to the Airport.
Table 6
Type of Service NAICS Code ACDBE
Firms All Firms
Motor vehicle supplies and new parts
merchant wholesalers
424720 6 237
Tire and tube merchant wholesalers 441110 0 1,943
Motor vehicle parts (used) merchant
wholesalers
441120 0 1,496
Other miscellaneous durable goods merchant
wholesalers
441310 0 3,292
Petroleum and petroleum products merchant
wholesalers (except bulk stations and
terminals)
441320 1 2,262
New car dealers 524210 2 14,354
Used car dealers 811111 3 9,470
Automotive parts and accessories stores 811112 0 215
Tire dealers 811121 1 4,088
Insurance agencies and brokerages 811122 0 691
General automotive repair 811191 1 701
Automotive exhaust system repair 811192 5 2,015
Total 19 40,764
Base Figure 0.05%
3.3 Step 2: Adjusting the Base Figure
After determining the base figure of ACDBE participation, the figure may be adjusted based upon local supporting evidence such as historic participation, disparity study information, and local availability of ACDBE firms.
Historical ACDBE Participation
Table 7 below shows the historical car rental ACDBE participation obtained by the Airport for the last three (3) federal fiscal years (FFY).
Table 7
Federal Fiscal Year
Car Rental
ACDBE Goal
Car Rental ACDBE
Participation
FFY 2020 3.64% 0.77%
Triennial ACDBE Goal Methodology for FFY 2024-2026
10 Federal Fiscal Year
Car Rental
ACDBE Goal
Car Rental ACDBE
Participation
FFY 2021 0.40% 0.72%
FFY 2022 0.40% 1.15%
Source: Overall ACDBE Triennial Goal Methodologies for FFY 2018-2020 and FFY 2021-2023 and Uniform Reports for FFY 2020-2022.
To arrive at an adjusted base figure, the airport added our Step 1 ACDBE Base Figure with our Step 2 Adjustment Figure (the median ACDBE participation) and divided by two (2) to get the average.
Car Rental
ACDBE Base Figure +
Car Rental Median ACDBE
Participation Within the
Last Three (3) Years
÷ 2 = Car Rental ACDBE
Triennial Goal
(0.05%) (0.77 %) (0.4%)
Disparity Studies
The Airport has not conducted a Disparity Study nor are they aware of any relevant studies of a similar size and location.
Therefore, no adjustment was made to the base figure based on disparity study data.
Other Considerations
The Airport is not aware of any other factors or adverse considerations that would have a material effect on ACDBE availability within the Airport marketplace or on ACDBE’s ability to participate (meeting bonding, insurance and financial requirements) in the Airport’s FAA -assisted contracting program. Therefore, no further consideration toward a goal adjustment was made. The Airport will continue to explore and consider all available evidence that materially would affect the opportunities for ACDBEs to form, grow, and compete in the Airport’s concessionaire program.
3.4 ACDBE TRIENNIAL GOAL FOR CAR RENTAL CONCESSIONS FFY 2024-2026 In accordance with the requirements of 49 CFR Part23, the Airport has established a Car Rental ACDBE Triennial Goal for FFY 2024-2026 of 0.4%.
The Airport must project the amount of the goal that will met with both race -conscious and race-neutral means. As the Airport has exceeded car- rental ACDBE goals in the past, it expects to meet the triennial goal with race -neutral means.
Further, the Airport operates a strictly race-neutral ACDBE program all will meet all of the goal with race -neutral means, as shown below.
Car Rental ACDBE Goal 0.4%
Race-Conscious Projection 0.0%
Race-Neutral Projection 0.4%
3.5 Race -Neutral Measures
49 CFR Part 23 requires that airports meet the maximum feasible portion of their overall ACDBE goals utilizing race-neutral means. Race -neutral participation includes any time that an ACDBE wins a contract through customary competitive procedures. Race-conscious methods are those that are focused specifically on assisting only ACDBEs, such as establishing a contract goal of ACDBE participation. The airport expects to solely utilize race neutral methods to achieve its car rental participation goals and does not expect to establish contract goals to achieve this goal. The underlying reason for the use of race-neutral means to achieve the goal is the market availability of ACDBE firms in the Airport’s market area.
Triennial ACDBE Goal Methodology for FFY 2024-2026
11 Some race-neutral methods the airport will utilize are listed below:
• Locating and identifying ACDBEs and other small businesses who may be interested in participating as concessionaires.
• Notifying ACDBEs of concession opportunities and encouraging them to compete, when appropriate. • When practical, structuring concession activities so as to encourage and facilitate the participation of ACDBEs. • P roviding technical assistance to ACDBEs in overcoming limitations, such as obtaining bonding or financing. 4 PUBLIC PARTICIPATION
A Public Notice will be issued on the Airport website (Attachment 1), publishing the Draft Proposed FAA publishing the Draft Proposed FAA Overall ACDBE Goal-Setting Methodology for FFY 2024-2026. The notice informed the public that the proposed goal and rationale were available for inspection at the Airport’s principal office during business hours for 30 days following the date of the Public Notice, and that the Airport would accept comments on the goal analysis for 30 days from the date of the Public Notice.
In accordance with Public Participation Regulatory Requirements of Title 49 CFR Part 26, minority, women, local business associations, and community organizations within the market area were contacted and provided an opportunity to review the triennial goal analysis and provide input. The Airport reached out to nine (9) local minority, women, and community business organizations to provide them information on the Airport’s ACDBE program and specifically t he Draft Proposed ACDBE Goal- Setting Methodology for FFY 2024 -2026 and to solicit their comments. Each organization was contacted multiple times by both telephone and email. The email blast distributed is Attachment 2. The summary of all contact made in an attempt to receive input as part of this process can be found in Attachment 3. The Airport hosted a webinar for public comment and showed a presentation outlining the methodology (Attachment 4). The Airport recorded the presentation and has the recorded if the public would like to review the Triennial ACDBE Goal Methodology for FFY 2024- 2026.
Triennial ACDBE Goal Methodology for FFY 2024-2026
12 ATTACHMENT 1: WEBSITE NOTIFICATION
Triennial ACDBE Goal Methodology for FFY 2024-2026
13 Triennial ACDBE Goal Methodology for FFY 2024-2026
14 ATTACHMENT 2: SAMPLE E-BLAST
Triennial ACDBE Goal Methodology for FFY 2024-2026
ATTACHMENT 3: CONSULTATIVE PROCESS SUMMARY
Organization Contact Efforts Comments
Hispanic Chamber of Commerce of Sonoma County
[email protected]
[email protected]
707-575-3648
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/29/23/23 called and left voicemail.
None received.
Hispanic Chamber of Commerce Silicon Valley
Dennis King
408-248-4800
[email protected]
[email protected]
[email protected]
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/29/23 attempted to call organization; number
disconnected.
None received.
North Bay Black Chamber of Commerce
[email protected]
707-623-2701
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and left voicemail.
None received.
Sonoma Small Business Development Center
707-595-0060
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and left voicemail.
None received.
Napa Chamber of Commerce
Travis Stanley, President & CEO
[email protected]
(707) 254-1146
(707) 226-7455
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and spoke with a representative.
Provided information on the goals, upcoming
webinar, and where to find the public notice online.
None received.
Solano County Black Chamber of Commerce
Tamuri Richardson, President
[email protected]
[email protected]
707-378-5301
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and spoke with a representative.
Provided information on the goals, upcoming
webinar, and where to find the public notice online.
None received.
Triennial ACDBE Goal Methodology for FFY 2024-2026
16 Organization Contact Efforts Comments
Marin Small Business Development Center
Miriam Karell, Director
[email protected]
415-482-1819
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and spoke with a representative.
Provided information on the goals, upcoming
webinar, and where to find the public notice online.
None received.
San Francisco Bay Area Hispanic Chamber of Commerce
Two Embarcadero Center, 8th FL
San Francisco, CA 94111
Evodio "Vo" Walle, President
[email protected]
[email protected]
[email protected]
415-572-3568
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 attempted to call organization; number
disconnected.
None received.
Hispanic Chamber of Commerce Alameda County
[email protected]
415-572-3568
510-522-0414
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and spoke with a representative.
Representative confirmed they received the emails
and notified Airport that this information was shared
with their members. No additional information was
requested by the representative.
None received.
East Bay Small Business Development Center
[email protected]
510-516-4118
510-885-4806
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 attempted to call organization; numbers
posted online have been disconnected.
None received.
Santa Clara & San Benito Counties Building & Construction Trades Council
Josué Garcia
Norene Sakazaki, Office Manager
[email protected]
[email protected]
[email protected]
408-265-7643
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and left voicemail.
None received.
Triennial ACDBE Goal Methodology for FFY 2024-2026
17 Organization Contact Efforts Comments
Chinese American Chamber of Commerce Santa Clara
Valley
[email protected]
408-615-7300
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 attempted to call organization; number
posted online has been disconnected.
None received.
Filipino American Chamber of Commerce of Silicon Valley [email protected]
408-283-0833
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 attempted to call organization; number
posted online has been disconnected.
None received.
Hispanic Chamber of Alameda County
[email protected]
415-572-3568
510-536-4477
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 attempted to call organization; unable to
leave voicemail due to full voicemail.
None received.
Silicon Valley Minority Business Consortium
Walter Wilson
[email protected]
REGINALD SWILLEY
[email protected]
408-660-9171
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 attempted to call organization; unable to
leave voicemail due to full voicemail.
None received.
San Jose MBDA Business Center
Paula Tran
Raymond Au Yeong
Tony Tang
[email protected];
[email protected]
[email protected]
408-998-8058 x 139
408-998-8058 x 137
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and spoke with a representative.
Provided information on the goals, upcoming
webinar, and where to find the public notice online.
None received.
National Association of Women Business Owners Silicon
Valley
[email protected]
408-657-7190
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and spoke with a representative.
Provided information on the goals, upcoming
webinar, and where to find the public notice online.
None received.
Triennial ACDBE Goal Methodology for FFY 2024-2026
18 Organization Contact Efforts Comments
Oakland African American Chamber of Commerce
[email protected]
[email protected]
510-268-1600
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and left voicemail.
None received.
Silicon Valley Vietnamese American Chamber of
Commerce
Nancy Kieu Nga Avila
[email protected]
[email protected]
408-673-7181
408-658-7785
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and spoke with a representative.
Provided information on the goals, upcoming
webinar, and where to find the public notice online.
None received.
The Silicon Valley Black Chamber of Commerce
Carl Davis
[email protected]
[email protected]
408-288-8806
• Sent e-blasts on 3/21/23, 3/23/23, 3/30/23/23,
4/3/23, 4/5/23, 4/6/23
• 3/30/23 called and left voicemail.
None received.
Triennial ACDBE Goal Methodology for FFY 2024-2026
ATTTACHMENT 4: WEBINAR PRESENTATION
Triennial ACDBE Goal Methodology for FFY 2024-2026
20 Triennial ACDBE Goal Methodology for FFY 2024-2026
21 Triennial ACDBE Goal Methodology for FFY 2024-2026
22 Triennial ACDBE Goal Methodology for FFY 2024-2026
23 Triennial ACDBE Goal Methodology for FFY 2024-2026
24 Triennial ACDBE Goal Methodology for FFY 2024-2026
25 Triennial ACDBE Goal Methodology for FFY 2024-2026
26 Triennial ACDBE Goal Methodology for FFY 2024-2026
27 Triennial ACDBE Goal Methodology for FFY 2024-2026
28