Contract Risk Management for Airport Agreements (2016)

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Legal Research Digest 30 AIRPORT COOPERATIVE RESEARCH PROGRAM Sponsored by the Federal Aviation Administration October 2016 CONTRACT RISK MANAGEMENT FOR AIRPORT AGREEMENTS This digest was prepared under ACRP Project 11-01, “Legal Aspects of Airport Programs,” for which the Transportation Research Board (TRB) is the agency coordinating the research. Under Topic 06-02, this digest was prepared by Robert Alfert, Jr., and Douglas E. Starcher, Broad and Cassel, Orlando, Florida. Responsible Senior Program Officer: Marci A. Greenberger Background There are over 4,000 airports in the country and most of these airports are owned by governments. A 2003 survey conducted by Airports Council International–North America concluded that city ownership accounts for 38 percent, followed by regional airports at 25 percent, single county at 17 percent, and multi-jurisdictional at 9 percent. Primary legal services to these airports are, in most cases, provided by municipal, county, and state attorneys. Research reports and summaries produced by the Airport Continuing Legal Studies Project and published as ACRP Legal Research Digests are developed to assist these attorneys seeking to deal with the myriad of legal problems encountered during airport development and operations. Such substantive areas as eminent domain, environmental concerns, leasing, contracting, security, insurance, civil rights, and tort liability present cutting-edge legal issues where research is useful and indeed needed. Airport legal research, when conducted through the TRB’s legal studies process, either collects primary data that usually are not available elsewhere or performs analysis of existing literature. Foreword Airports enter into a variety of agreements with numerous vendors and tenants, such as leases and other agreements that provide access to the airfield, concession agreements, ground transportation agreements, construction contracts, and professional services, among others. All of them gen- erate varying degrees of risk that can be addressed through risk sharing and shifting or insuring. The management of risk can also be addressed by drafting airport agreements that include explicit statements of legal obligations so as to mitigate and manage the risk. This legal digest provides a general overview of the types of agreements that are typically used by airports of all sizes. It identifies primary risks associated with each type of agreement, and the appendices provide sample language from four organizations illustrating how they manage and mitigate those risks. The appendices can be found at www.trb.org/acrp. This digest can be very useful in guiding airport management as they seek legal counsel for applicable state and federal laws. LRD 30_Cover_final.indd 1 10/6/16 1:48 PM