San Francisco International AirportACDBE Goal Setting Stakeholder Meeting

October 4, 2017

Agenda

• Welcome & Introductions

• ACDBE Program Basics

• Goal Setting Methodology

• Review of 3 Year Goal

• Questions

ACDBE Basics

Why?

The intent of DOT’s Disadvantaged Business

Enterprise (DBE) program is to remedy past and

current discrimination and ensure a level playing

field for socially and economically disadvantaged

firms to compete for airport contracting and

concession opportunities.

49 CFR Parts 26 & 23

ACDBE Basics

When?

Primary/commercial service airports that receive Airport

Improvement Planning (AIP) funding and that have

concession revenues of $200,000 or more for either car

rental or non-car rental concessions must have an Airport

Concession Disadvantaged Business Enterprise (ACDBE)

Program.

ACDBE Basics

How?

Requirements:

1. Overall Goals (set triennially)

2. Certification– Performed by the California Unified Certification Program

3. Contracting Activities

4. Monitoring and Enforcement

5. Reporting – Performed annually

ACDBE Basics

ACDBE Program Objectives §23.1

• Ensure nondiscrimination

• Create level playing field

• Ensure ACDBE program is narrowly tailored

• Ensure that only eligible firms participate as ACDBEs

• Remove barriers to the participation of ACDBEs

• Provide appropriate flexibility to airports in establishing

and providing opportunities for ACDBEs

ACDBE Basics

What is a Concession?

• Engaged in sale of goods and/or services to the public or a

business that provides goods and services to those

businesses

• Even if no office, store or other type of location on the

airport premises, it may still be considered a concession IF

activities take place at the airport

– Advertising

– Web-based or electronic businesses accessible at the airport

– Businesses that provide goods and services to concessionaires

ACDBE Basics

What is a DBE?

A Disadvantaged Business Enterprise or DBE is a for-profit

small business concern

(1) 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;

and

(2) Whose management and daily business operations

are controlled by one or more of the socially and economically

disadvantaged individuals who own it

SFO Goal Setting Methodology

• Step 1. 23.51(c): Determine the base figure for the

relative availability of ACDBEs

• Step 2. 23.51(d): After calculating a base figure of

the relative availability of ACDBEs, examine

evidence to determine what adjustment, if any, is

needed to the base figure in order to arrive at the

overall goal

2 Steps

Review of 3 Year Goal

SFO’s FY 2018-2020 ACDBE Goal

Goal Period:

October 1, 2017 - September 30, 2020

Overall ACDBE Goal:

11.4%

- Base goal (11%) + past history (11.7%) = 22.7%

- Adjusted goal = 22.7%/2 = 11.4%

Review of 3 Year Goal: Three Year Projections

SFO

THREE-YEAR CONCESSION GOALS

GOAL PERIOD: FROM 10/01/2017 to 9/30/2020

ConcessionEstimated Gross

Revenues

Estimated ACDBE

Gross Revenues ACDBE % Goal

Advertising $60,743,008 $0 0.0%

ATM - Expiring $44,000 $0 0.0%

ATM - continuing $209,844 $0 0.0%

Duty Free/Duty Paid Luxury

Goods $484,740,275 $49,928,248 10.3%

Food/Beverage - Expiring $345,622,248 $36,290,336 10.5%

Food/Beverage - Continuing $357,247,943 $82,036,592 23.0%

Foreign Currency $3,617,317 $0 0.0%

Luggage Carts $10,566,436 $0 0.0%

Mail Service $206,050 $0 0.0%

Passenger TSA Clearing Service $16,380,248 $0 0.0%

Cell Phone Rental $3,192,790 $0 0.0%

Retail - Expiring $172,616,305 $12,600,990 7.3%

Retail - Continuing $197,041,284 $850,866 0.4%

Shoeshine $586,000 $0 0.0%

Travel Agency $6,376,433 $0 0.0%

Total $1,659,190,262 $181,707,032 11.0%

Review of 3 Year Goal

Methodology Result Comments

Directory/Census

*Duty Free – N/A CUCP Directory data is not comprehensive.

Census data is over-inclusive, containing all

firms operating in the NAICS code, not

necessarily those ready, willing and able to

perform the contract.

Retail – 0.20%

Food/Beverage – 0.04%

Active Participants List

Duty Free – 25.0% Data is based on number of firms, not

gross revenues.Retail – 15.8%

Food/Beverage – 27.3%

Firms Expressing

Interest

*Duty Free – 5.8% Not all firms listed have participated in

proposals/bids.

*Duty Free included in Retail. Retail – 5.8%

Food/Beverage – 4.3%

Review of 3 Year Goal

Duty Free - 0.2%+25.0%+5.8% = 31.0% ÷ 3 = 10.3%

Retail - 0.2%+15.8%+5.8% = 21.8% ÷ 3 = 7.3%

Food/Beverage – 0.04%+27.3%+4.3% = 31.6% ÷ 3 = 10.5%

Methodology Duty Free Retail Food/Beverage

Directory/Census 0.20% 0.20% 0.04%

Active Participant 25.0% 15.8% 27.3%

Expressions of Interest 5.8% 5.8% 4.3%

Review of 3 Year Goal

Actual Past History of ACDBE Participation

YEARTOTAL GROSS

REVENUES

ACDBE GROSS

REVENUESACDBE %

2016 $524,280,262 $52,850,318 10.08%

2015 $406,844,467 $47,736,902 11.73%

2014 $281,100,244 $35,735,469 12.71%

Base goal of 11.0% + Median ACDBE Participation (2014-2016) of 11.7% = 22.7%

22.7% ÷ 2 = 11.4%

Total estimated gross receipts for all concessions excluding car rentals = $1,659,190,262

Estimated ACDBE gross receipts as adjusted = $189,147,690 (11.4%)

Review of 3 Year Goal

Race‐Neutral measures are activities or programs that

benefit and assist all small businesses equally, including

DBEs. No specific goals are established in any contract.

Race‐Conscious measures, such as the use of individual

contract goals, are those measures and programs that

focus on specifically assisting DBEs only.

Review of 3 Year Goal

Race Neutral Measures1. Locate and identify ACDBEs and other small businesses who may

want to participate as concessionaires

2. Notify ACDBEs of concession opportunities and encourage them to compete, when appropriate

3. Structure concession activities so as to encourage and facilitate ACDBE participation

4. Provide technical assistance to ACDBEs in overcoming limitations, such as inability to obtain bonding or financing

5. Ensure competitors for opportunities are informed during pre-solicitation meetings about how ACDBE program will affect procurement process

6. Inform competitors of availability of ACDBE firms to assist them in obtaining ACDBE participation

7. Establish a business development program, technical assistance program or other steps to foster ACDBE participation in concessions

Questions

Thank you