HOUSTON, TX - Today, Mayor Pro Tem Martin and Houston City Council voted, 11 - 6, to uphold the City of Houston's procurement process, which has been in place for a number of years, awarding Food and Beverage Concessions Package One for William P. Hobby Airport to Areas HOU JV, LLC. The City of Houston's Procurement Process, which in regards to Houston Airport Concessions is a competitive bid process for the Hobby Airport Concession's Contract. There have been three previous votes on Hobby Airport Concessions at Houston City Council most recently last month and with this vote today the fourth. The previous three followed the same process, and were passed unanimously by Houston City Council without issue including one to Pappas/Four Families.
Mayor Pro Tem Martin went to great lengths to perform due diligence in the evaluation of this procurement process. It is Martin's belief the City's procurement process was followed as it has been in the past when Pappas/Four Families has been a participant and won on several occasions. The procurement process was open and transparent with the highest scorer and highest revenue producer winning. Pappas/Four Families officials have said the process was flawed. Pappas/Four Families lost the final round of bidding by a score of 85.8 to 85.2. Areas won because it offered a substantially higher share of revenue to the city. Areas has offered 22 percent of its sales to the Houston Airport System, whereas the Pappas/Four Families group offered 15.5 percent. Pappas/Four Families prevailed when compensation to the city was not included by an average score of 78.2 to 75.8, or 2.4 points. Areas, however, got 9.8 points for its proposed compensation, which gave the company a lead of four-tenths of a point. The best-and-final offer bumped its compensation points to 10.
Mayor Pro Tem Martin had these comments to say in the City Council Meeting this morning: "Life is about too close to call, the winner is the winner, that's why present your best and final as just that, best and final". The Pappas/Four Families group lost the competitive procurement process during their evaluation due to their revenue to the airport/city being $50 Million less than the winning firm. The procurement process was specific and companies were asked to present best and final. Pappas/Four Families chose not to increase their revenue, to the City of Houston, making their proposal less competitive and allowing Areas to edge them out as the winner in this process. The Pappas/Four Families groups staged a public relations campaign that played to the emotions and community giving the perception the City of Houston was trying to "evict" them from Hobby Airport, which could not be further from the truth.
Mayor Pro Tem Martin had these final remarks in closing: "If the process was flipped and Firm A had a higher RFP score and Firm A had a $50 Million in additional revenue to the City BUT, the Mayor recommended Firm B as the winner, he would be chastised, ridiculed, and screams of "fix" would be shouted on every media outlet". At the end of the day, it comes down to the City process and upholding the proposals as they are presented. Pappas/Four Families continues to operate at public facilities including: Bush Intercontinental Airport, The George R. Brown Convention Center, and Hilton Americas in addition to their locations around the city. Additionally, Mayor Pro Tem Martin did have two recommendations for changes in the procurement process for future consideration: no less than 25% on pricing and to eliminate reopening bid process when results are too close to call.
For more information, please contact Mayor Pro Tem Dave Martin's office at (832) 393-3008 or districte@houstontx.gov.
