Airport vending contract goes to Coke and a company FAA ordered stripped of its DBE status by early October
By David Pendered
A joint venture business comprised of a subsidiary of The Coca Cola Co. and a minority partner who is too wealthy – according to the federal government – to qualify as a disadvantaged business enterprise was awarded a seven-year contract to operate vending machines throughout Atlanta’s airport.
Mack II is the disadvantaged business enterprise partner in a deal approved Monday by the Atlanta City Council. The deal is for 17 vending locations to sell soft drinks, bottled water and snacks in all concourses, the Atrium, north baggage area, and car rental area.
Mack II is owned by Mack Wilbourn, who has had concessions contracts at Atlanta’s airport for decades. The FAA has ordered the state to strip Wilbourn’s company of its DBE status by early October. The prime vendor is Coca Cola Refreshments USA, Inc., which Hoover’s reports is a Coke subsidiary formerly known as Coca Cola Enterprises, a bottler and distributor.
Councilwoman Felicia Moore sought to block the contract, which was not on the agenda for a vote because it was still pending before the council’s Transportation Committee. In order to get the contract to the floor for a vote, the council had to take several procedural steps to move the contract out of the committee.
Moore contended the council was trying to award the vending contract before Mack II is decertified as an Airport Concession Disadvantaged Business Enterprise (ACDBE).
The FAA has ordered Mack II to be decertified by early October.
“What we are doing is trying to get out in front of an inevitable decertification that’s coming through the processes right now,” Moore said during Monday’s meeting. “My vote will not be a party to that, and so I will be voting no.”
The FAA has determined that there is not sufficient evidence that Wilbourn’s personal wealth is less than $750,000, which is the upper limit on personal net worth that was in place at the time of Mack II’s certification.
The FAA instructed the city not to give any scoring preference to Mack II as an ACDBE. The city’s score sheet on the vending contract shows the Coke/Mack II bid received 15 points for its ACDBE participation. Mack II comprises 73.2 percent of the venture, according to the sheet.
The FAA wrote in its letter of April 20 that, until Mack II is decertified:
- “The Airport and the City of Atlanta should not count participation of any firm that has a PNW [personal net worth] in excess of $750,000 or otherwise failed to meet Part 23 requirements towards ACDBE goals.”
The vending contract has been on hold since May, as the council awaited further resolution of the certification issue, Moore said.
City records indicate that Mayor Kasim Reed’s office sent the proposed contract to the council in April; no date was written on the transmittal letter. The contract’s first appearance on an agenda is the May 2 meeting of the Transportation Committee.
The FAA’s warning letter to the city is dated April 20, and Reed’s administration has said it received the letter April 26. The letter states that four companies – including Mack II – did not deserve the DBE certification for a variety of reasons.
Only two companies responded to the city’s request for proposals for vending services: Coca Cola Refreshments USA, with Mack II as its DBE partner; and Gilly Vending, a Miami-based firm certified by GDOT as a DBE in 2010.
The records on Gilly’s proposal show that its offer was dismissed for a lack of documents to prove it was capable of fulfilling the contract. The company’s webpage shows its clients include MARTA and several governmental entities in Florida.
The city’s procurement director, Adam Smith, wrote on March 22 that the firm met its DBE requirements: “All of the proponents have been deemed responsive by the Office of Contract Compliance.”
On April 12, airport General Manager Louis Miller recommended the vending contract go to Coca Cola Refreshments because it was, “the most responsive and responsible proponent.”
The legislative request form used to send the proposed contract from the mayor’s office to the council was signed by Deven Judd, the airport’s concessions development manager.
According to Judd’s remarks: “Gilly was not scored due to being deemed non-responsive by Finance because they did not provide 2009 and 2010 audited financial statements.”
The council voted 10-3 to approve the contract. The three who voted against it were councilmembers Moore, Howard Shook and Alex Wan. Two members did not vote: Natalyn Archibong and Yolanda Adrean.
Mack II is one of four concessionaires that previously were awarded contracts at the airport and later had their DBE status challenged by the FAA.
Procedurally, what has happened is the FAA conducted its own investigation into Atlanta’s concessions contracts and determined that four companies that won contracts were not eligible for the DBE certification that helped them win. The DBE category was worth 15 points on the 100-point scale used to rank companies during the competition.
The FAA on Aug. 9 sent GDOT a letter instructing GDOT to decertify the four companies. GDOT is involved because it is the state’s one-stop shop for certifying disadvantaged business enterprises.
GDOT has not taken any steps to start the decertification process, a spokesman said Wednesday.
The FAA gave GDOT 60 calendar days from Aug. 9 to complete the decertification process, according to FAA’s letter to GDOT.