The Los Angeles city attorney is reviewing a protest filed by AIRMALL USA regarding the intention of Los Angeles World Airports (LAWA) to award a contract for a terminal concessions manager to rival Westfield Concession Management. The protest involves a management contract for Terminals Terminals 1, 3 and 6 at Los Angeles International (LAX).
The protest was filed May 16 by AIRWAYMALL LAX, Inc., which is the name AIRMALL bid under for the LAX concession. “We believe the authority needs to take a closer look at how and why they came to their decision,” says Mark Knight, president, AIRMALL USA. “At the same time, we fully intend to respect the process that is now underway.”
LAWA spokeswoman Nancy Castles says she can’t give a time frame for resolution. “The city attorney is reviewing the protest filed by AIRMALL,” she says. “Based on the outcome, we’ll have to decide how to proceed.”
Westfield Concession Management declined to comment on the protest. The other bidder on the management contract, MarketPlace Development, did not file a protest before the deadline.
In its protest, AIRWAYMALL LAX said it “took LAWA’s goals to heart and submitted a proposal that combined significant capital investments and innovative designs with high returns to LAWA.”
Among the contentions in the protest letter was that AIRWAYMALL’s commitment to invest $35M to improve terminals is nearly triple the amount proposed by Westfield, and that AIRWAYMALL’s design would net 20,475 additional square feet for concessions and seating in Terminal 1, which is 18,000 more square feet than was proposed by Westfield. AIRWAYMALL contends that it took responsibility for both leasehold spaces and common area spaces, while Westfield did not. In addition, AIRWAYMALL said that unlike Westfield, it did not demand a management fee or other offset, which could amount to millions of dollars in revenue.
“Despite all of these objective factors, and despite the fact that AIRWAYMALL’s experience in developing airport concessions programs is unmatched in the industry, Westfield was awarded the contract with nearly perfect scores in every category,” the protest letter said. “We respectfully submit that this was an error.”
The protest document outlines several areas in which AIRWAYMALL believes the evaluation process was flawed or arbitrary, including scores for financial capacity and commitment, qualifications and experience, and conceptual plans and design. It claims LAWA’s instructions regarding minimum annual guarantee payments were confusing and “created an apples-to-oranges comparison.”
AIRWAYMALL also claimed Westfield violated the express terms of the RFP by identifying potential vendors when it combined pictures of its proposed concept terminals with pictures of established restaurant and retail brands at its malls, “thereby suggesting that such brands would be coming to LAX,” the protest document said. The RFP specifically prohibited proposers from identifying or suggesting specific local or national retail/dining brands.
Finally, AIRWAYMALL LAX contends that LAWA is taking on needless risk by relying solely on Westfield to complete the development of several terminals simultaneously. The protest involves Terminals 1, 3 and 6, but Westfield is already under contract with LAWA for management of other terminals. In January, Westfield signed a 17-year terminal commercial manager concessions agreement with LAWA, to develop, lease and manage food and beverage and retail at four facilities at LAX: the existing Tom Bradley International Terminal, the new Tom Bradley International Terminal (currently under construction), Terminal 2 and the airport’s Theme Building. Under that contract, Westfield and its concessionaires are required to invest at least $81.9M in initial improvements and $16.4M in mid-term refurbishment improvements.
