CITY OF NEWPORT AND PORT OF ASTORIA -- BASIC INFORMATION DEADLINE FOR SUBMISSION: October 15, 2008 -- 5:00 pm SUBMIT PROPOSALS TO: Gary Firestone City Attorney City of Newport 169 SW Coast Highway Newport, OR 97365 Fax: (541)574-0609 E-mail: g.firestone@thecityofnewport.net OR to Jack Crider Executive Director Port of Astoria 422 Gateway Ave., Suite 100 Astoria, Oregon 97103 Fax: (503) 325-4525 E-mail: j.crider@portofastoria.com PROPOSALS MUST BE PHYSICALLY RECEIVED BY THE DEADLINE. PROPOSALS MAY BE DELIVERED IN PERSON, BY COURIER, BY MAIL, BY FAX OR BY E-MAIL TO EITHER THE PORT OF ASTORIA OR THE CITY OF NEWPORT. The words PROPOSAL FOR AIRLINE SERVICE TO NEWPORT AND ASTORIA must be written out the outside of the box or envelope for mailed and delivered proposals, in the subject line for proposals submitted be e-mail, and on the cover sheet of proposals submitted by fax. PROPOSALS SUBMITTED IN RESPONSE TO THE RFP FOR AIRLINE SERVICES PREVIOUSLY ISSUED BY THE CITY OF NEWPORT AND PORT OF ASTORIA WILL BE CONSIDERED AS SUBMITTED IN RESPONSE TO THIS RFP, UNLESS THOSE PROPOSALS ARE WITHDRAWN. PREVIOUSLY SUBMITTED PROPOSALS MAY BE AMENDED IN WRITING SUBMITTED BY THE DEADLINE FOR SUBMISSION LISTED ABOVE. CITY OF NEWPORT AND PORT OF ASTORIA Page 1 of 12
Proposals must contain: (1) a cover letter; (2) a narrative describing in detail the proposal for providing scheduled airline service connecting Newport and Astoria with Portland International Airport; (3) information and documentation supporting the narrative. Financial information regarding the proposer shall be either provided with the proposal or provided prior to final contract award. Any financial information about the proposer will be maintained confidential. The City of Newport (Newport) and the Port of Astoria (Astoria) seek an airline to provide scheduled airline service between their respective airports and Portland International Airport, with the service to start no later than May 1, 2009. Newport and Astoria are willing to provide compensation to the airline for the provision of airline service, with the payment to be adjusted based on the revenue received by the airline. CITY OF NEWPORT AND PORT OF ASTORIA Page 2 of 12
ADDITIONAL INFORMATION For additional information not contained in this request for proposals, please contact: or Jack Crider Executive Director Port of Astoria 422 Gateway Ave., Suite 100 Astoria, Oregon 97103 (503) 325-4521 j.crider@portofastoria.com Gary Firestone City Attorney City of Newport 168 SW Coast Highway Newport, OR 97365 (541) 574-0607 g.firestone@thecityofnewport.net CANCELLATION OR REJECTION This request for proposals may be cancelled at any time. Any or all proposals may be rejected for noncompliance with required procedures and standards. All proposals may be rejected if it is in the public interest to do so. PROCESS AND STANDARDS Newport and Astoria anticipate that the best proposal submitted by a qualified proposer will be tentatively awarded the contract by mutual agreement of their respective local contract review boards, subject to final agreement on a contract. Newport and Astoria may interview two or more airlines if competitive proposals are received, but need not interview if one of the proposers is clearly superior to all others, if only one proposal is received, or if no acceptable proposal is received. The selection criteria will include the airline s experience and expertise in providing service of this type, availability of aircraft, quality of proposed service, ability and commitment to meet the requirements for providing air service and the desired service characteristics as listed in this RFP, and cost and plan for creating profitable airline service serving the two airports. A complete scoring sheet is included in this request for proposals. Newport and Astoria recognize that they are asking for a substantial amount of information in the proposals, and reserve the right to award the proposal based on a proposal that substantially responds to this RFP, even if some questions are not fully answered. CITY OF NEWPORT AND PORT OF ASTORIA Page 3 of 12
PROTESTS Any person objecting to any provision of this proposal other than the Requirements for Providing Air Service, the Desired Service Characteristics, or the Sample Evaluation Sheet may submit a protest to Gary Firestone City Attorney City of Newport 169 SW Coast Highway Newport, OR 97365 g.firestone@thecityofnewport.net or to Jack Crider Executive Director Port of Astoria 422 Gateway Ave., Suite 100 Astoria, Oregon 97103 j.crider@portofastoria.com Protests must be in writing, clearly identified on the outside of the envelope or in the subject line of the e-mail as PROTEST REGARDING AIRLINE SERVICE REQUEST FOR PROPOSALS and must be received prior to the deadline for submitting a proposal. Any objections to the requirements for Providing Air Service, the Desired Service Characteristics, or the Sample Evaluation Sheet shall be made in the proposals. CITY OF NEWPORT AND PORT OF ASTORIA Page 4 of 12
AIRPORT INFORMATION AND SERVICE EXPECTATION Newport operates the Newport Municipal Airport (ONP), located within Newport s city limits about 4 miles south of Newport s city center. ONP has one 6000 foot ILS runway and one 3400 foot runway. ONP is 87 air miles from Portland International Airport (PDX). Astoria operates the Astoria Regional Airport (AST), located in Warrenton, Oregon, about 2 miles from Astoria s downtown. AST has one 5,796 instrument runway with ILS, VOR and GPS approaches, and one 4467 VFR runway. AST is 68 air miles from PDX. Neither ONP nor AST currently has scheduled airline service. But both have had airline service in the past. Newport and Astoria believe that the historic ridership levels and trends support the conclusion that air service to each can be successful if properly managed with appropriate aircraft. Newport and Astoria are willing to provide compensation to an airline to provide service during an initial startup period. The compensation would be reduced by an amount equal to the revenue received by the airline to operate the service. ONP and AST prefer proposals that allow the airports to provide input on scheduling and ticket pricing. Newport and Astoria believe that the service should be self-sustaining and profitable within 24 to 36 months. Newport and Astoria believe that economies of scale can be achieved by having one airline provide service to each airport. The selected airline would be required to provide service between each airport and PDX, but would not be required to provide service between ONP and AST. Newport and Astoria desire an average of four flights a day in each direction between each of the airports and PDX, but proposals for alternate levels of service will be considered. Newport and Astoria have been awarded funding to provide compensation for the provision of airline service, including both federal and state grants. The selected airline will be required to comply with any and all requirements imposed by grants received by Newport and Astoria. The final contract will include provisions required by state law and by the state and federal grants. CITY OF NEWPORT AND PORT OF ASTORIA Page 5 of 12
REQUIREMENTS FOR PROVIDING SERVICE Airline must have or be able to obtain sufficient aircraft to provide reliable service on the two routes (PDX-ONP and PDX-AST). Newport and Astoria require an average of at least three roundtrips per day on each route, with the earliest coast to PDX flights arriving in time to connect with the main morning bank of flights leaving PDX, and with the latest PDX to coast flights leaving at a time that connections are possible from the late afternoon bank of arrivals into Portland. Schedules that provide more flights during peak seasons and fewer flights during non-peak seasons will be considered. The airline must use aircraft that have sufficient passenger seating and baggage capacity to provide acceptable scheduled airline passenger service. The aircraft used on the routes must be of a size that TSA screening is not required for the flights. Alternatively, an airline may propose service that would require TSA screening or TSA-approved screening, but would have to demonstrate that the proposed screening is acceptable and would have to fully describe responsibilities and costs associated with screening at each airport. The airline will provide appropriate arrangements for passenger service at PDX, including check-in of passengers, taking arriving passengers to the unsecured side of the airport from the aircraft parking area, making sure that all through luggage is appropriately screened, and providing normal levels of passenger service. If security screening is to be located at ONP and AST, these requirements may be amended. Interline bag and ticketing agreements with at least one connecting airline or the ability to obtain agreements within a reasonable time is a requirement. Stationing of sufficient personnel at ONP and AST to provide appropriate passenger service and aircraft service or the ability to contract for those services is a requirement. Liability insurance coverage of at least $10 million. (Proof to be provided prior to contract). CITY OF NEWPORT AND PORT OF ASTORIA Page 6 of 12
DESIRED SERVICE CHARACTERISTICS At least four roundtrips per day per route during peak season. Code-sharing with one or more major airlines. Interline bag and ticketing agreement with most airlines. Through fares to destinations other than Portland. A marketing representative stationed in Oregon with responsibility for promoting the service. A commitment to advertising the service on regular and long-term basis. CITY OF NEWPORT AND PORT OF ASTORIA Page 7 of 12
ISSUES TO BE ADDRESSED IN ALL PROPOSAL NARRATIVES Operations What type of aircraft will be used? How many aircraft will be used on the two routes? Where will aircraft overnight? What flight schedules will be offered? What arrangements will there be for mechanically servicing the airplanes? How many persons will be based full time in Oregon? - How many in each city, including Portland? - What types of jobs? What level of experience will there be in management and pilot positions? How will the airline provide passenger service at PDX? - Using its own personnel? - By contract with an airline or other service provider? What code-share arrangements does the airline have? - Are additional code-share arrangements anticipated? What interline ticket and baggage agreements does the airline have? - Does the airline anticipate entering into interline ticket and baggage agreements? What are the airline s plans to expand on this type of service? Has the airline participated in this type of arrangement in other location? If so, what were the results? What has been the airline s reliability (cancelled flights, delayed flights) history? - What is the airline s on-time record? How long has the proposer been providing scheduled air service? - Where? Financial and Management What ticket prices are anticipated? How much compensation will be required from Newport and Astoria for the airline service? How will the compensation payments be structured? (Newport and CITY OF NEWPORT AND PORT OF ASTORIA Page 8 of 12
Astoria anticipate paying for blocks of service time or flights, with deductions for revenue received from ticket sales, but would consider other options). How will credit for passenger and other revenue be calculated? What is the airline s business plan for the service? Will the airline be able to offer through fares to cities other than Portland? (Fares less than the total cost of the two fares if calculated separately) - How many and which cities? How does the airline plan to establish profitability without subsidies? - When does the airline project profitability? Provide information on anticipated costs and profitability for the two routes including but not limited to: What is the airline s cost per hour of service or per flight? What load factor is needed to break even? How much revenue will it take to break even? How much debt does the airline have? What additional debt will the airline take on to provide the service? What are the airline s projected revenues from the service? Does the proposer have a parent company? What is the name of the parent company? How long has it been in business? Who are the principal owners of the proposer? Marketing What is the airline s marketing plan for the service? - What will the airline do to promote the airline service to the two cities? - What type and amount of advertising will the airline provide? What relationship does/will the airline have with travel agents? Security How will security be handled at PDX? - How do you plan to approach PDX or otherwise handle security? - How does the airline propose to obtain approval from TSA for its proposed security arrangements? CITY OF NEWPORT AND PORT OF ASTORIA Page 9 of 12
SPECIFIC INFORMATION REQUIRED TO BE INCLUDED IN THE PROPOSAL A. The proposal must include a detailed description of the proposed financial arrangements for providing the service. Proposers are encouraged to submit as much detail as possible regarding costs and payment, and may suggest alternate forms of payment arrangements. The information should include: 1. An estimate of the average cost per departure, not including profit, for both the Newport and Astoria routes. 2. An estimate of the break-even point by fare and passenger load. 3. A statement whether the proposer is willing to contractually agree to a maximum cost per flight for each route, excluding fuel cost, if cost is to be a component in determining the amount of payment. 4. A statement whether the proposer is willing to agree to a maximum payment from Newport and Astoria per flight or per month. B. The proposal must address the criteria listed in the score sheets. C. The proposal must explain how the proposer plans to achieve profitable status for the service. CITY OF NEWPORT AND PORT OF ASTORIA Page 10 of 12
DETAILS REGARDING SELECTION PROCESS After the deadline, the proposals will be opened, and copies of the proposals will be made available to the members of the local contract review boards of both Newport and Astoria. The contract review boards in public meetings will each decide which proposal to award the contract to. They may schedule one or more joint meetings to interview proposers and to make decisions. The award by each body will be contingent on the decision of the other contract review board and shall be effective only if both boards award to the same proposer. If the two boards do not reach the same decision, the boards shall meet jointly to try to resolve their differences. A notice of intent to award will be issued after both contract review boards have made their decisions. After the selection of the best proposer, a contract shall be negotiated and entered into, consistent with the requirements of this RFP and the selected proposal. If no agreement on the final form of a contract is reached, the contract award may be withdrawn and the contract re-awarded to the second-best proposer, subject to successful negotiation and execution of a contract. Alternatively, a new proposal process could be initiated. Negotiations with the best proposer are authorized to finalize the agreement, provided that any changes from the submitted proposal are not so great that they make the process unfair to any other proposer. CITY OF NEWPORT AND PORT OF ASTORIA Page 11 of 12
CRITERIA FOR APPROVAL The standards criteria for approval shall be those included in the evaluation sheet in this section, using the weighting and scoring system in the evaluation sheet. Sample Evaluation Sheet Appropriate Airplane Type (Maximum 10) If the proposed airplane type requires TSA security and the proposal does not include a feasible means of providing TSA security, or if it does not carry sufficient passengers and baggage, the score must be 0 and the contract cannot be awarded to this proposer. 10 = Perfect aircraft for the proposed service, considering size, economy, comfort, reliability. 7-9 = Good aircraft for proposed service. 5-6 = Acceptable but not desirable. 1-4 = Poor, but not disqualified. Adequate Number of Aircraft For the Proposed Service. (Maximum 10) 10 = 4 or more aircraft. 8 = 3 aircraft. 2 = 2 aircraft. The score may be adjusted upwards if the airline proposes arrangements that would allow use of other aircraft, or other arrangements that maximize the use of aircraft. 0 = 1 or fewer aircraft with no provision for obtaining or leasing additional aircraft. Staffing. (Maximum 10). 10 = Optimal staffing at all locations and in all positions. 7-9 = Adequate. 5-6 = Acceptable, but not desirable. 1-4 = Poor. 0 = Totally unacceptable. Experience/Expertise (Maximum 10). Experience and expertise of management team of proposer (both headquarters and in Oregon). Plan for Airline Service (Maximum 10). Rate the approach to providing service. 10 = Excellent plan. 7-9 = Good Plan 5-6 = Acceptable but not desirable 1-4 = Poor, but not disqualified 0 = Unacceptable Marketing Plan (Maximum 10). How strong is applicant s marketing plan? 10 = Excellent. 7-9 = Good Plan 5-6 = Acceptable but not desirable 1-4 = Poor, but not disqualified 0 = Unacceptable Commitment to Service/Likelihood of Continuing Service After Termination of Payment from Newport and Astoria (Maximum 50) How likely is it that the proposer will continue to provide service for a protracted period of time after the last payment under the contract. Cost. (Maximum 25) How much is the airline proposing to charge Newport and Astoria to provide service? What is the total anticipated cost to Newport and Astoria? 25 = Lowest possible cost 18-24 = Low cost, well within anticipated budget 13-17 = Cost not low, but not unrealistic 1-12 = High anticipated cost 0 = Unacceptable cost Intangibles/Personality. (Maximum 15) Does the proposer seem like the right entity to provide the service, considering commitment, enthusiasm, credibility and other intangibles. Knowledge of Local Conditions. (Maximum 10) TOTAL (Max. 150) A score of 0 on any item may be sufficient to disqualify any proposer. CITY OF NEWPORT AND PORT OF ASTORIA Page 12 of 12