DENVER (CBS4)- The latest audit of Denver International Airport takes a dim view of how the airport awards concessions contracts. There are millions of dollars at stake for the businesses and the airport.
"Does it provide the traveling customer the kind of access to state of the market goods that should be available?" asked Denver Auditor Timothy O'Brien.
O'Brien said the process isn't exactly fair.
"Of the 147 different concessions, roughly 40% of them did not have to go through a competitive process," said O'Brien.
He said the report focuses on an incentive program allows some businesses to negotiate directly with DIA instead of competing with another business for a contract.
"The competitive process keeps the incumbent sharp on their toes, sort of speak if they think they are going to be replaced by another product or service," said O'Brien.
DIA released this statement to CBS4: Denver International Airport (DEN) has a high-performing, diverse concessions program and we are committed to providing equitable opportunities for all potential concessionaires while providing the tools and incentives for our current concessionaires to thrive. Our contracting processes and program are equitable and in compliance with Executive Order No. 8 and all other city ordinances. Through these processes and programs, we provide many opportunities for new and existing concessionaires to succeed and help DEN meet the needs of our passengers.
Although we agree with the auditor's recommendations, we do fundamentally disagree on a few findings. Specifically, the Premium Value Concession Program (PVC) was authorized within the special circumstances listed in Executive Order No. 8 and was approved by Denver City Council and the Mayor. By allowing concessionaires with outstanding customer service and performance metrics to earn the ability to negotiate a contract for a brand-new concession business, we are able to ensure we are meeting the demand for our growing number of passengers while creating a great customer experience through various shopping and dining options. However, DEN will explore a new internal program to continue to incentivize our concessions program and provide a high-quality experience for our travelers.
As for the contracting process, the language in Executive Order No. 8 provides us the flexibility to maintain, operate and develop the 3rd busiest airport in the world 24 hours a day, seven days a week. It is essential that we meet passenger demand and needs by ensuring we have dining and shopping options for our passengers and our current contracting processes allows us to do so. Executive Order 8 also gives us the ability to adapt to ongoing challenges, which has been essential during the pandemic. Over the last couple of years, we made policy adjustments to allow our concessions to maintain operations during the pandemic and recover while still providing shopping and dining options to our passengers. To further provide more opportunities to concessions, we have recently developed equity enhancements to the procurement process for all DEN contracts, including concession contracts.
DEN strives to provide a high-performing, equitable concessions program and will continue to explore opportunities to improve our program, provide opportunities to concessionaires to expand our program, and provide travelers with a great passenger experience through a variety of shopping and dining options.
O'Brien recommends the program be scrapped altogether.
Despite a disagreement on the incentive program, DIA said they will explore a new program. O'Brien said because they agreed to the audits' other recommendations, he will return in a few months to make sure the changes have been put in place.
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