How Many Bidders in the Mix?

Back in March of this year we wrote a Blog entry that discussed the initial pool of bidders interested in competing for the right to win a 50 year lease for the City’s parking system. Initially, 11 groups responded to the Parking Authority’s RFQ. A few weeks later 7 of those groups were deemed to have "the financial and operational wherewithal to compete for a long-term lease".

As of last Wednesday an unspecified number of those 7 groups submitted bids. What we know is that two of the bidders on the high side were within 10 percent of each other and that’s why the City and the Authority moved to the "final and best offer" phase where there is supposed to be a clear winner emerge today.

If and when we find out how many firms actually submitted bids (whether it was just the two that came close to each other or more) it seems as though the pattern here has almost followed the same as it did in Chicago: there the eventual winner came originally from a group of 10 that responded to an RFQ, a group of 6 that were invited to bid, and one other firm that moved to the "final and best offer" phase.

7 for 11

The title might be the calling card for the City’s parking lease plan: reportedly seven bidders for the eleven garages and possibly meters and attended lots, altogether comprising more than 17k spaces in Downtown and other parts of the City.

On March 19th-the day responses to the City’s Request for Qualifications were due-we wrote that when the City heard from eleven bidders that it was likely the number of bidders would fall by the time the City moved toward picking a winner. That was based on the experience of Chicago where the pool of interested parties was eventually reduced so that only two firms actually moved to the final bid stage. According to today’s published reports the seven moving to the next stage (due diligence is to take place from April to June according to the RFQ) "had the financial and operational wherewithal to compete for a long-term lease".

Two New York firms, two Chicago firms, one from Nashville, one from Hartford, and one international firm will move to the next stage and final proposals will be due in July.

Pool of Parking Bidders Could Shrink

By this past Friday parties interested in the proposal to lease parking garages, lots, and meters had to submit a response to an RFQ. Today’s news accounts show that eleven bids were received. The Mayor is very pleased, according to his spokeswoman with "not only by the number of responses, but, as you will see soon, the amount of expertise we’ve seen in the bidders."

Since the city on the cutting edge of leases and public-private partnerships of late has been Chicago, it is instructive to look at their level of response to a bid for a concession on parking meters. In a 2009 Reason Foundation piece, the CFO for the City of Chicago described the meter bid as such:

  • In March of 2008 the City received qualifications statements from ten bidders
  • Of those ten, six were deemed qualified and offered an opportunity to bid on the concession package
  • Two placed bids
  • One bidder, who submitted the highest responsible bid, was selected

The City of Chicago eventually netted $1.157 billion for the meters.

So while nearly a dozen bidders are showing their interest in Pittsburgh’s garages, if Chicago’s experience is any guide Pittsburgh won’t be choosing between eleven bids this coming November.