A company facing the loss of its limousine concession at McCarran International Airport in Las Vegas is suing the airport and the Clark County Commission.
With taxi trips up but limousine and shuttle bus traffic flat, McCarran is reducing the number of limousine operators from six to four effective May 1.
Limo concessionaires provide services to travelers on an unscheduled basis like taxis. Passengers walking out of the airport terminal to the arrival curb can on the spot choose taxi, limousine or other transportation options.
The concessions at issue and the lawsuit do not involve scheduled limousine service in which hotels transport guests to and from the airport using their own limousines or in which passengers line up a preferred limousine company in advance.
CLS Nevada LLC dba CLS Transportation, one of McCarran’s current curbside limousine service providers, filed suit Dec. 5 in Clark County District Court against the county commissioners, the county Department of Aviation, which owns the airport, and competing companies on track to win new limousine concessions at the airport.
The suit was filed after CLS didn’t make the cut on Nov. 15 when the County Commission unanimously adopted a recommendation from airport managers that the airport negotiate new concessions with four other companies that scored higher in the request for proposal process.
They are:
• Airline Limousine Corp./Las Vegas Limousines, owned by taxi and limousine giant Frias Holding Co.
• Whittlesea-Bell dba Bell Trans and Presidential Limousine.
• Nevada Coaches LLC dba Showtime Tours in a joint venture with On Demand Sedan Services.
• Jacob Transportation Services LLC dba Executive Las Vegas.
CLS has been operating at McCarran under a contract dating to 2007 in which it committed to pay the airport a minimum annual guaranteed payment of $846,000.
CLS charged in its lawsuit that in the request for proposal for new limousine and minibus concession agreements starting May 1, it offered a minimum annual guarantee of $2.4 million.
By choosing competitors offering smaller guarantees, the county is forgoing accepting an additional $5 million over the five-year life of the contract, the lawsuit complains.
The lawsuit charges the selection process was unfair as the county Aviation Department, owner of the airport, used criteria that — unlike previous contracts — incorporated an oral presentation by the applicants to airport staff.
After this presentation, CLS learned the presentation was given excessive weight in the selection process, a maximum 75 out of 200 points, the lawsuit complained.
Other more “objective” components of the application process received less weight.
For instance, the financial guarantee was weighted at a maximum 50 points and the financial capability of each applicant was weighted at a maximum of 20 points, the suit complained.
“Without logic or reason, the Department of Aviation placed less weight on every one of the objective criteria,” the suit charges. “The oral presentation component provided the Department of Aviation with carte blanche authority to rank each applicant based on a subjective analysis performed by a biased panel that included Department of Aviation employees.”
“The Department of Aviation introduced the oral presentation component to the review process for one reason: to enable it to arbitrarily eliminate companies that it did not want to do business with,” the suit alleged.
CLS, owned and managed by Charles Horky III, complained in the suit that on Sept. 29 Horky was advised to be prepared during his presentation for the new concession application to discuss customer service, marketing and operational plans.
Instead of being asked about these topics, a three-member panel at the presentation “vilified Mr. Horky about his association with another transportation company in Nevada and wrongfully accused him of fraudulently altering his financial statements to support his minimum annual guarantee amount,” the suit complains.
CLS, with a fleet of more than 200 vehicles and more than 420 employees, charged in the lawsuit that the County Commission on Nov. 15 then “rubberstamped a secret and underhanded evaluation conducted by the Department of Aviation” for the limousine concessions.
After the Nov. 15 meeting, CLS learned it had scored just 10 of a possible 75 points for its oral presentation, “a pittance compared to the higher numbers received by competitors,” the suit complained.
“Judicial intervention is needed at this time to halt the blatant violation of due process of law committed by the Board of Commissioners and arbitrary and capricious acts committed by the Department of Aviation,” the lawsuit charges.
The suit, filed by the Las Vegas law firm Bailey Kennedy, seeks a court judgment that the aviation agency used a discriminatory process to choose the concession winners, that it had “no rational basis” to reject the CLS proposal and that the commission denied CLS’s rights to due process by failing to provide the firm the “secret” evaluation ranking the companies prior to its decision on Nov. 15.
The suit also seeks an order requiring the commission to withdraw its approval of the airport staff’s request to negotiate concessions with the four finalists and an order that the Aviation Department reevaluate each proposal using only objective criteria.
The county hasn’t yet responded to the lawsuit and its policy is to not comment on lawsuits.
But during the Nov. 15 hearing, several commissioners praised the selection process as being fair and county aviation Director Randall Walker commented, “As we know, companies’ proposed dollar amounts are in some cases unreasonable and they can’t perform.”
Not mentioned in the lawsuit is something that Horky brought up in his comments to the commission on Nov. 15: that in March, the Aviation Department had proposed terminating CLS’s contract at the airport because of repeated defaults on its payment obligations to the airport.
These defaults dated to August 2008 and ranged from about $281,000 in March 2010 to about $65,000 in January of this year.
Despite the recommendation of the Aviation Department that CLS lose its limousine concession in March, commissioners at that time gave the company another chance after it became current on its obligations. Horky in March suggested a reduction in travel to McCarran had affected his company’s financial results.
Horky on Nov. 15 thanked the commission for allowing the company to stay at the airport with its March vote, then went on to say the new concession-selection proposal was unfair and that he’d have to lay off 250 people if he loses the concession.
That prompted commissioners to advise CLS employees in the audience to apply for work with one of the winning bidders that will be hiring thanks to its new concession.