Airport Concessions Management Follow-up

Denver International Airport fully implemented three recommendations we made in the original audit report and only partially implemented three others.

The airport did a cost-benefit analysis, so it now knows that a combination of prime concessionaire contracts and individual concessions contracts best positions the airport to achieve its strategic goals. Airport managers also updated the concessions master plan to reflect their desire for a hybrid approach to concessions contracting, including the reason for this chosen approach. Managers also reviewed contracts in holdover status.

Remaining Risks

The three recommendations the airport did not fully implement present several lingering risks.

• While the airport discontinued its Premium Value Concessions program, elements of the program will linger due to legal commitments the airport has already made to some concessionaires. Because of this, 18% of the airport’s concessionaires will still have the ability to negotiate new contracts outside the competitive selection process.
• The airport established a new incentive for its concessionaires: the Excellence in Service program. This new program will provide vendors an opportunity to receive one three-year extension on their existing contracts, among other benefits. We found some risks with this replacement program.
• Airport concessions managers did not sufficiently revise the airport’s records retention policy related to documenting selection panel decisions in the procurement process. The airport’s revised policy does not clearly explain that individual score sheets and notes from selection panel members should be kept in addition to the master score sheet, which summarizes the results.

Auditor's Letter

November 2, 2023

In keeping with generally accepted government auditing standards and Auditor’s Office policy, as authorized by city ordinance, we have a responsibility to monitor and follow up on audit recommendations to ensure city agencies address audit findings through appropriate corrective action and to aid us in planning future audits.

After following up on the “Concessions Management” audit report issued in February 2022, we determined Denver International Airport fully implemented three recommendations and partially implemented three others.

During the original audit, we found the airport had a concessionaire incentive program that allowed some vendors to bypass the competitive selection process. The program was overly complicated, expensive to manage, and lacked a proven benefit. Meanwhile, the airport had not done a cost-benefit analysis to assess what would be its optimal approach for concessions contracting.

We also found the airport’s concessions contracting practices were unfair. Staff were not keeping individual selection panelists’ original score sheets from the contract procurement process, and at least three dozen concessionaires’ contracts were being held over for years after they expired without being competitively bid out.

Based on our follow-up work, we determined airport officials and staff did not fully address the risks associated with our initial findings. Consequently, we may revisit these risk areas in future audits to ensure the airport takes appropriate corrective action.

We appreciate the leaders and team members at the airport who shared their time and knowledge with us throughout the audit and the follow-up process. Please contact me at 720-913-5000 with any questions.

Denver Auditor's Office


Timothy O'Brien, CPA

AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor

Denver Auditor´s Office

201 W. Colfax Ave. #705 Denver, CO 80202
Email: auditor@denvergov.org
Call: 720-913-5000
Follow us on Facebook     Connect with us on Twitter
Read our social media policy