What some have described as a “soap opera” unfolding, the Orange County Commissioners have voted to award the RFP for FBO services to ACI Jet Center, a California-based FBO operator instead of the incumbent Signature Flight Support. (The other John Wayne Orange County Airport incumbent FBO, Atlantic Aviation, was awarded a renewal of its concession in the RFP process.)
On a 4-1 board vote, ACI Jet — which originally was awarded the contract in January before the vote was contested and then rescinded — won it anew to replace incumbent Signature Flight Support, the world’s largest fixed- base operator. ACI Jet’s interim lease, good for about two years, is effective once the operator provides the required insurance and security deposit. (ACI Jet is a smaller, San Luis Obispo-based FBO operator.)
Reviewing reports of the hearings and process by the Orange County Commissioners in industry publications and the local Orange County Register has made for an entertaining insight (as long as you’re not Signature Flight Support) into the politics of airport RFPs for FBO’s.
The brief history in case you lack that background is the Orange County Commissioners decided to entertain an RFP process to qualify either the renewal of the two FBO incumbents, Signature Flight Support and Atlantic Aviation, or possibly award one or both of the two FBO concessions to new operators. It was reported that the County Commissioners had received complaints over possible “price gouging” by these two FBO chain operators, and in particular a complaint by a long term flight school tenant at the airport.
Not surprisingly, what followed was a two-year “exercise” by the Airport Administration Staff in researching, writing, and issuing finally the RFP submittal.
Let the “games begin” or so they say, and with that Signature Flight Support, Atlantic Aviation, Ross Aviation, and a host of others both local and national entered the foray. Four entrants made it to the final round and
were scored by the Airport Administration Staff who made their recommendation for Signature Flight Support and Atlantic Aviation to be (renewed), awarded the two FBO concessions at the airport.
But not so fast. The recommendations to the County Commissioners by the Airport Staff were just that, recommendations subject to consideration by the County Commissioners of Orange County. And apparently the Commissioners were ready for battle.
Several public hearings ensued and some who attended report that for Signature Flight Support it wasn’t “pretty”. The incumbents were accused of highly inflated retail fuel pricing and that pricing by them was not competitive compared to other nearby airports, by approximately a dollar higher per gallon the reports suggested. Signature Flight Support countered by saying that very little fuel they actually dispensed at the airport was sold at the posted rate, (what some refer to as the “rack” or posted retail price). It was also reported that during this process Atlantic Aviation made a significant reduction in their posted fuel price. The “Orange County Register” reported, “When supervisors in July announced their intent to search for alternate contractors, Atlantic rapidly dropped its fuel price by 31 percent, according to Flightaware.com, which tracks airport information. After waiting at least three months, Signature lowered its fuel price by 16 percent around the deadline for contract applications.”
The County Commissioners on February 28, 2017 also re-awarded Atlantic’s fixed-base operator contract. Both roughly two-year interim leases for Atlantic Aviation and ACI Jet will allow for services to be provided while the airport conducts a study for future development of its general aviation facilities, according to county documents.
Signature Flight Support’s response, according to published reports in the Orange County Register was, “Signature, which realized in January it could lose the contract, previously alleged the county had violated federal and local procurement laws and sent complaints to the Federal Aviation Administration and the Department of Transportation”. As quoted in the “Orange County Register” on February 28, 2017, Geoff Heck, Signature’s senior vice president of sales and marketing, said, “The board’s decision, Tuesday, to substitute “an under-qualified bidder” for Signature is in
violation of the county’s agreements with Federal Aviation Administration rules on safety and efficient operations at the airport. Today’s action was not transparent, fair, or objective, and will cause unnecessary disruption at the airport,” Heck added, “Additionally, the disparaging, unfounded and meritless allegations that have been made against Signature to justify this decision are patently false.” Heck said Signature “will vigorously pursue all avenues of redress.”
So what’s next?
ACI Jet is busily preparing to take over for Signature Flight Support at SNA. Atlantic Aviation is continuing their existing operation though probably a little more “price-sensitive”. And Signature Flight Support, well they’ve turned it over to their attorneys and the filing of a complaint with the FAA.
We’ll just have to see where that goes. Our prediction is the FAA will let the local decision stand and not overrule the County Commissioners, and Signature reduces its location count by 1 . . .
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