Research Projects

Increasing diversity and reducing airport resource requirements in airport concessions. In Reserve

Included in USDOT's Airport Concessions Disadvantaged Business Enterprise (ACDBE) regulation (49 CFR Part 23) is the requirement for many airports to set ACDBE goals for participation in traditional concessions activities (such as food/beverage/retail) and non-traditional concessions activities such as car rental, advertising, internet access, cable television, and customer amenities. While the effort by airports to set and achieve goals, and report and monitor attainment for non-traditional concessions can be significant, the resulting attainment is often low.

Background (Describe the current situation or problem in the industry, and how your idea would address it.)

Even before the impacts of COVID-19, the landscape of non-traditional concessions at airports had significantly changed since 49 CFR Part 23 was last significantly revised in 2005. Some of those impacts include mergers and acquisitions of prime concessionaires operating in these industries (particularly in the car rental arena). Additionally, there have been shifts in consumer demand for car rentals (impacted by transportation network companies such as Uber and Lyft and increases in public transit bus and rail routes serving airports) and passenger services such as baggage carts and coin operated pay phones (replaced by wheeled luggage and cell phones).

However, the requirement that airports evaluate diversity in these areas has not evolved to meet these changes in the intervening 16 years. For example, while the car rental program may still represent a significant segment of airport concessions opportunities, it appears to be producing de minimis ACDBE achievement at many airports. In many locations this appears to be due to how these businesses operate and the national scale of operations on their major expenditure (fleet level vehicle purchases from the vehicle manufacturers); superimposed with the structure of the ACDBE Program as a small business program. Vehicle purchases are by far the largest portion of car rental businesses purchases. Should a person having the rebuttable presumption of social disadvantage desire to seek certification as an ACDBE, he or she would likely exceed the Personal Net Worth standard or the Business Size Standard as a vehicle manufacturer or dealer. Similar dynamics appear to be currently at play in other segments of non-traditional airport concessions such as cable television, advertising, and internet access.

Individual airports and the FAA can spend significant time to compile, report on, and review attainment by airports for national firms. In addition to historically low goals set and ACDBE attainment met on goods and services in non-traditional concessions, there can be difficulty receiving timely and accurate expenditure data from prime concessions firms on a local (not national) basis to support generation of an airport-specific analysis. It has been conveyed to some airports that this type of data, and the purchase of significant goods and services, is primarily collected at the national rather than the local level. Researching best practices, along with other potential means of implementing the ACDBE regulation for non-traditional concessions (as the Federal Transit Administration does for transit vehicle manufacturers under 49 CFR 26.49) could result in both reduced burdens for airports and increased diversity attainments.

Objective (What is the desired product or result that will help the airport industry?)

Research could identify both best practices and suggested changes to airport's requirements in non-traditional concessions and result in a guidebook to increase diversity in non-traditional concessions. This research could additionally support recommendations to USDOT to revise regulations in this area.

Approach (Describe in general terms the steps you think are needed to achieve the objective.)

A combination of research of available attainment data, USDOT regulations and industry trend data related to non-traditional concessions; survey and interviews of airports, USDOT personnel, and providers; and focus groups or case studies for recommendations would support this research. Some suggestions data points could include:

• Change and consolidations in non-traditional concessions providers at airports over the past several years

• ACDBE goals and attainment for non-traditional concessions activity and results of innovative efforts currently undertaken

• Time/effort/resources required by recipients to set ACDBE goals (overall and per agreement) for non-traditional concessions activity

• Time/effort/resources required by providers, recipients, and FAA to report and review attainment data on non-traditional concessions ACDBE activity

• Existence of local or small business programs that may serve to supplement or replace non-traditional concessions goal

• Review of FAA's Civil Rights Connect database for universe of certified firms

• Review of FTA's experience in implementing a national model for equity in transit vehicle manufacturing

Cost Estimate and Backup (Provide a cost estimate and support for how you arrived at the estimate.)

Because of the narrow focus of this research and the easy accessibility of much of the data, it is estimated that this effort could be accomplished in nine to twelve months for approximately $100,000. This would allow for up to approximately 650 hours of research in the following areas:

Research of current industry trends and innovate practices: 100

Documentation and evaluation of applicable regulations:: 50

Accumulation and analysis of goal and attainment data: 100

Development and deployment of survey tool 100

Interviews with stakeholders 50

Analysis of survey and stakeholder input 50

Development of recommendations, best practices, and guidebook 200

Related Research - List related ACRP and other industry research; describe gaps (see link to Research Roadmaps above), and describe how your idea would address these gaps. This is a critical element of a synthesis topic submission.

• ACRP Research Report 217 - Guidance for Diversity in Airport Business Contracting and Workforce Programs. This document summarizes high-level ACDBE non-car rental and car rental goals and attainments and highlights a Diversity Contracting Benefit-Cost Tool which will be a useful input. However, it does not delve deeply into non-traditional concessions and diversity attainment.

• ACRP Report 126: A Guidebook for Increasing Diverse and Small Business Participation in Airport Business Opportunities.

• ACRP Report 215: Transportation Network Companies (TNCs): Impacts to Airport Revenues and Operations—Reference Guide

• FAA 2015: Best Practices for Fostering Participation from New DBEs and ACDBEs at Airports.

• Office of the Inspector General 2014: Audit Report: New Disadvantaged Business Enterprise Firms Face Barriers to Obtaining Work at the Nation's Largest Airports, Departmental Office of Civil Rights, Federal Aviation Administration

• ACI–NA. 2016: Report of ACI–NA Multi-Committee Task Force on Airport Concessions

• ACI–NA. 2016 Paper "THE TERM "CONCESSIONS" IN THE DOT ACDBE REGULATION (49 CFR Part 23) SHOULD BE UNDERSTOOD TO REFER ONLY TO BUSINESSES THAT SERVE THE TRAVELING PUBLIC"

• Airport Minority Advisory Council (AMAC) 2015 Paper: "REFORMING THE U.S. DEPARTMENT OF TRANSPORTATION DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAMS - A WINNING APPROACH: RECOMMENDATIONS TO REALIZE GREATER ACDBE AND DBE GOODS AND SERVICES SUPPLIER OPPORTUNITIES AND PARTICIPATION WITHIN THE CAR RENTAL INDUSTRY"

• Overcoming Hurdles: Airports, ACDBEs Seek Common Ground. ARN June 2011.

Annotations
Idea No. 720