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The National Academies

ACRP 11-01/Topic 10-03 [Pending]

Legal Issues Relating to Airport Commercial Contracts
[ ACRP 11-01 (Legal Aspects of Airport Programs) ]

  Project Data
Funds: $50,000
Contract Time: 12 months
Staff Responsibility: Marci A. Greenberger

Background
Airport attorneys spend considerable time drafting and negotiating airport contracts that involve specialized legal and business issues. Some are general commercial issues that aren’t necessarily exclusive to airports, while others are unique to airports. Airports as governmental entities are subject to a variety of governmental law principles that can affect their contracts for commercial services.
Several years ago ACRP Report 54: Resource Manual for Airport In-Terminal Concessions was published. This report reviewed many of the business concerns that airport proprietors address when planning and implementing a concessions program. ACRP Report 33: Guidebook for Developing and Managing Airports Contracts looks broadly at issues that may arise in a wide range of airport agreements and includes examples of various agreements. These past publications focused primarily on the business aspects of contracting for airport concessions and other services, but they did not focus on significant legal issues that can affect all government commercial contracts.
ACRP LRD 30: Contract Risk Management for Airports provides a general overview of the types of agreements airports use, but a variety of other government law principles also can affect government contracts for commercial services, such as restrictions on government's ability to "lend credit;" concerns for "void" and "voidable" contracts due to the scope of an airport's authority under state law; separation of powers concerns for contracts that effectively delegate government's responsibilities to private entities; requirements for obtaining value for the use of public assets; antitrust and "market participant" concerns that may apply to government; and the effect of subsequent legislation on an existing contract. State and federal law can regulate commercial contracts in areas such as letters of credit, limitations on indemnification, federally required FAA language, etc. Finally, airport commercial contracts may benefit from a variety of current commercial contracting practices, but those practices may not be fully understood and practices may require adjustment in a government setting.
OBJECTIVE
The objective of this research is to develop guidelines to assist with writing commercial contracts for airport proprietors and legal counsel. The guidance should consider common government law principles, current commercial contracting law and practices, and how they impact drafting and negotiating commercial contracts at airports. The digest should assist airport counsel and proprietors to identify and address legal issues likely to be advanced by specialized outside counsel for commercial entities and to advocate for those provisions essential to airports that may be unfamiliar to counsel in general practice. 
RESEARCH IMPLEMENTATION
This research will be conducted in two phases and four tasks in a firm fixed-price agreement. At the conclusion of Phase 1, ACRP will make a determination whether to proceed with Phase 2. The tasks will be as follows:
Phase 1
Task 1. Conduct background research and collect relevant material. Based on the initial but complete review of the source materials, submit a detailed report outline. The outline should contain sufficient detail to describe what a report of appropriate length will contain. This outline should also contain the estimated pagination for each proposed section and/or subsection. This material will be submitted for ACRP consideration and approval. Participate in a conference call with the ACRP project review panel 3 weeks after submission of the outline.
Phase 2
Task 2. After ACRP approval of the detailed outline, conduct additional research and case and statutory/regulatory analysis. Collect additional primary data to the extent necessary.
Task 3. Submit an initial draft report in accordance with the approved outline (including any modification required by ACRP). Participate in a conference call with the ACRP project review panel 3 weeks after submission of the initial draft report.
Task 4. Revise the initial report as necessary and provide a red-line and clean version of the draft final report (DFR). ACRP will provide written comments, to which each comments will need a point-by-point response and the report will be revised as appropriate and submitted as the final report.
FUNDING: $50,000
STATUS:  Panel is reviewing proposals.

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