I. PROJECTED THREE-YEAR NON-CAR RENTAL CONCESSION OPPOTUNITIES

PHL has estimated gross receipts of $373,481,153 for non-car rental concessions for Fiscal Years 2006-2008. The estimated three-year gross receipts were calculated by establishing a base year consisting of average gross receipts for Fiscal Years 2002-2004 then assuming an annual growth rate of 3% for each subsequent year.

II. METHODOLOGY

A. Step One: Relative Availability Base Calculation

In establishing the base percentage for the relative availability of ACDBEs we have determined that the majority of firms currently operating concessions and those seeking concession contracts are located in the Philadelphia Metropolitan area. The Philadelphia Metropolitan Area is comprised of Philadelphia, Bucks, Burlington, Camden, Chester, Delaware, and Montgomery Counties and defines PHL's market area. The following sources were used to identify the availability of ACDBEs in our market area:

1. Pennsylvania Unified Certification Program Database (PAUCP)
2. Philadelphia Minority Business Enterprise Council Directory (MBEC)
3. MarketPlace Redwood Limited Partnership Active Participant List (APL)
4. 2003 Census Bureau County Business Patterns (data accessed using NAICS Codes)

Using the resources listed above, the following data was obtained:

There were 895 firms identified that perform food and beverage concession functions. Of the 895 firms, 41 were identified as ACDBEs. The relative availability of ACDBEs ready, willing and able to propose on concession contracts is approximately 4.58% of all food and beverage firms ready, willing and able to participate.

There were 4,603 firms identified that perform airport retail concession functions. Of the 4,603 firms, 18 were identified as ACDBEs. The relative availability of ACDBEs ready, willing and able to propose on concession contracts is approximately 0.39% of all retail concessionaire firms ready, willing and able to participate.

There were 326 firms identified that perform hotel concession functions. Of the 326 firms, none were identified as ACDBEs. The relative availability of ACDBEs ready, willing and able to propose on concession contracts is approximately 0.00% of all hotel concession firms ready, willing and able to participate.

There were 39 firms identified that perform advertising concession functions. Of the 39 firms, 6 were identified as ACDBEs. The relative availability of ACDBEs ready, willing and able to propose on concession contracts is approximately 15.38% of all advertising firms ready, willing and able to participate.

There were 498 firms identified that perform wired telecommunication payphone concession functions. Of the 498 firms, 2 were identified as ACDBEs. The relative availability of ACDBEs willing and able to propose on concession contracts is approximately 0.40% of all wired telecommunication payphone firms ready, willing and able to participate.

There were 249 firms identified that perform wireless telecommunication concession functions. Of the 249 firms, 8 were identified as ACDBEs. The relative availability of ACDBEs willing and able to propose on concession contracts is approximately 3.21% of all wireless communication firms ready, willing and able to participate.

There were 558 firms identified that perform passenger service concession functions. Of the 558 firms, 7 were identified as ACDBEs. The relative availability of ACDBEs willing and able to propose on concession contracts is approximately 1.25% of all passenger service firms ready, willing and able to participate.

There were 98 firms identified that luggage cart service functions. Of the 98 firms, none were identified as ACDBEs. The relative availability of ACDBEs willing and able to propose on concession contracts is approximately 0.00% of all luggage cart service firms ready, willing and able to participate.

There were 159 firms identified that perform rooftop antennae telecommunication concession functions. Of the 159 firms, 4 were identified as ACDBEs. The relative availability of ACDBEs willing and able to propose on concession contracts is approximately 2.52% of all rooftop antennae telecommunication firms ready, willing and able to participate.

There were 135 firms identified that perform satellite television broadcasting concession functions. Of the 135 firms, 2 were identified as ACDBEs. The relative availability of ACDBEs willing and able to propose on concession contracts is approximately 01.48% of satellite television broadcasting firms ready, willing and able to participate.

Based upon the information above Philadelphia International Airport has established 1.16% as its relative availability base of ACDBEs applicable to concession opportunities. We divided the number of available ready, willing and able ACDBEs (numerator) by the total number of firms (denominator) from the same concession area and added the percentages from each concession opportunity category to arrive at a base figure of 1.16%.

B. Step two: Adjustment

Philadelphia International Airport has not conducted a disparity study to examine any contracting anomalies with ACDBE concession firms. However, the chart below provides information on ACDBE past participation.

The median ACDBE past participation for PHL concessions is 25.84%. Using the past participation median as a guide the formula used in the step two adjustment is as follows:

Median ACDBE past participation + step one ACDBE availability 2

Step two calculation 25.84% + 1.16% = 13.50%

2 Philadelphia International Airport proposes an overall ACDBE goal of 13.50% for Fiscal Years 2006-2008.

III. UTILIZATION OF RACE-NEUTRAL AND RACE-CONSCIOUS METHODS

A. Race-Neutral Methods

Our projection of race-neutral participation is based upon various factors and data. For example, based on our analysis of current concession contracts for fiscal year 2004, we recorded approximately 25.84% participation by disadvantaged business enterprises for that period. However, in prime contracts awarded to ACDBEs, 7.00% was awarded to women owned disadvantaged businesses as prime contractors and 6.00% to minority owned disadvantaged businesses as prime contractors. PHL has determined that given the current market conditions and future concession opportunities, it can expect to maintain 13.00% participation through race-neutral measures.

In addition, PHL will use the following measures to increase race-neutral participation:

1. Locating and identifying ACDBEs and other small businesses that may be interested in participating as concessionaires under this part;
2. Notifying ACDBEs of concession opportunities and encouraging them to compete, when appropriate;
3. When practical, structuring concession activities so as to encourage and facilitate the participation of ACDBEs;
4. Providing assistance to ACDBEs in overcoming limitations, such as inability to obtain bonding or financing with the creation of the Revolving Loan Fund;
5. Providing information concerning the availability of ACDBE firms to competitors to assist them in obtaining ACDBE participation; and
6. Establishing technical assistance programs or taking other steps to foster ACDBE participation on concession contracts.

B. Race-Conscious Measures

PHL is committed to obtaining as much as possible of the ACDBE participation needed to meet overall goals through race-neutral measures and has projected race-neutral participation to be 13.00%. However; race-neutral measures, standing alone, are not projected to be sufficient to meet the overall goal of 13.50%. PHL proposes to use race-conscious measures for the remaining 0.50% goal for non-car rental concession opportunities.

IV. INTERIM REPORTING

If a new concession opportunity with estimated annual gross receipts of $200,000 or greater arises at a time that falls between normal submission dates for overall goals, PHL will submit an appropriate adjustment to its overall goal to the FAA for approval at least six months before executing the concession agreement for the new opportunity.

Additional, PHL will review the goals annually to ensure that the goals continue to fit its circumstances appropriately. PHL will report to the FAA any significant adjustments that it makes to its goal in the time before its next scheduled submission