Subject Matter Experts Statistical & Econometric Techniques Quantify Impacy TransAtlantic Airline Alliances on Competition & Benefits to Consumers

FEDBIZOPPS SPECIAL NOTICE REQUEST SUBMISSION OF STATEMENTS OF QUALIFICATIONS TO USE STATISTICAL AND ECONOMETRIC TECHNIQUES TO QUANTIFY THE IMPACT OF JOINT VENTURE AGREEMENTS AND TRANSATLANTIC AIRLINE ALLIANCES ON COMPETITION AND ITS BENEFITS TO CONSUMERS HIGH LEVEL SUMMARY: On a SOLE-SOURCE basis, the U.S. Department of Transportation ("DOT"), Office of the Under Secretary for Transportation Policy, Office of the Assistant Secretary for Aviation and International Affairs, Office of Aviation Analysis, plans to award three separate but closely related sole-source Purchase Orders (or Delivery Orders, or other contract-types) to Jan Brueckner, Robert Willig, and Volodymyr Bilotkach, for services which will be provided by each of those persons to DOT in connection with a quantification of the benefits of cooperative agreements in transatlantic airline markets. And, under those contemplated SOLE-SOURCE contracts, these three individuals will also provide an analysis methodology for ongoing monitoring of transatlantic airline alliances. The unique qualifications possessed by each of those three persons are described below in this Special Notice. BACKGROUND: In 2008, the European Commission's Directorate General for Competition ("DG COMP"), in close cooperation with USDOT, commissioned a confidential quantitative analysis, conducted by an outside scholar, on the topic of transatlantic airline alliances (Empirical Study.) In granting antitrust immunity, DOT requires the foreign carrier partners to submit the same Origin and Destination Data of Passenger Traffic that U.S. carriers submit, under a seal of confidentiality. That study utilized confidential USDOT data to analyze the price and traffic effects of code-sharing and alliances between the U.S. and Europe and was the first comprehensive study to use these data. Airlines whose data were included in the analysis provided waivers to DG COMP for the use of these data for this project only. In 2011, the Department and DG COMP engaged several econometric and industry experts to review the Empirical Study to evaluate the key drivers of alliance competition and public benefits identified in the study and to recommend alternative approaches to measure the impact of alliances on competition in transatlantic air service as they evolve over time. Since the completion of this study, there have been a number of structural and operational changes in the global airline industry which have implications for transatlantic passenger air travel. These changes are now reflected in the data collected from the alliance carriers by the Department to monitor the effect of the agreements. It is critical for policy impact analysis in general and for alliance monitoring in particular to develop methodologies that make the most effective use of USDOT confidential data to evaluate and assess transatlantic airline competition. The Department is seeking econometricians who have worked on airline industry competition issues to apply a variety of econometric techniques to measure the economic impact of immunized alliances, especially their core joint venture revenue arrangements. JAN BRUECKNER's QUALIFICATIONS: Jan Brueckner is uniquely qualified to participate in the proposed project, on a SOLE-SOURCE basis, given his extensive research record related to airline alliances. Since 1985, Dr. Brueckner has published more than 25 articles related to airline alliances and competition and presented his work at multiple conferences. He has been quoted by the press in articles related to airline alliances and competition, served as a reviewer for multiple journals, and served as the special-issue editor for Transportation Research Part B's "Economic Analysis of Airport Congestion" issue in 2010. His previous consulting experiences with airlines, including Delta Air Lines and American Airlines, as well as with the Star Alliance, have given him particular insights into alliances and their operations. Moreover, Dr. Brueckner's recent research has expressly examined the use of carve-outs, which is a particularly important issue given the differing views of carve-outs held by DOT and the Department of Justice. Specifically, Mr. Brueckner explored the competitive impact of using carve-outs within grants of antitrust immunity and tentatively concluded that the incentives for collusion in the inter-hub market are no different between the pre-alliance situation and an alliance subject to a carve-out. Mr. Brueckner provided an academic assessment of the Empirical Study, and participated in the conference of the Empirical Study evaluators. DOT believes that its intended sole-source awardee, Jan Brueckner, is the only entity capable of developing research methodologies based on lessons learned from the methodologies employed in the Empirical Study to examine the use of carve-outs as a remedy for competitive concerns without substantial duplication of costs and without incurring unacceptable delay in fulfilling the USDOT requirements, thereby assisting USDOT in fulfilling its responsibilities under 49 USC - 41309. ROBERT WILLIG's QUALIFICATIONS: Robert Willig is uniquely qualified to participate in the proposed project, on a SOLE-SOURCE basis, given his extensive research record related to antitrust policies and their application to airline alliances. Dr. Willig is a former supervisor of economics research at Bell Laboratories and a former deputy assistant attorney general for economics at the Antitrust Division of the U.S. Department of Justice. A fellow of the Econometric Society, Dr. Willig has served as a reviewer for multiple economics journals. Moreover, Dr. Willig's recent research has examined model specification when assessing the competitive effects of immunized airline alliances. In particular, Dr. Willig explored the effects of different models and operationalization of variables and tentatively concluded that the use of standard controls is crucial when comparing the price effects of alliances and code-share agreements. Mr Willig provided an assessment of the pricing aspects of the Empirical Study, and participated in the conference of the Empirical Study evaluators. DOT believes that its intended sole-source awardee, Robert Willig, is the only entity capable of providing research methodologies to study price effects without substantial duplication of costs and without incurring unacceptable delay in fulfilling the USDOT requirements, thereby assisting USDOT in fulfilling its responsibilities under 49 USC - 41309. VOLODYMYR BILOTKACH's QUALIFICATIONS: Volodymyr Bilotkach is uniquely qualified to participate in the proposed project, on a SOLE-SOURCE basis, given his extensive research record related to airline alliances. Since 2005, Dr. Bilotkach has published more than 13 articles related to airline alliances and competition and presented his work at multiple conferences. Dr. Bilotkach has been quoted by the press in articles related to airline alliances and competition, served as a reviewer for multiple journals, and been a member of the Transportation Research Board's Committee on Intergovernmental Relations in Aviation. Moreover, Dr. Bilotkach's recent research has expressly identified key competitive effects of airline alliances and antitrust immunity and considered the need for economic lines of reasoning in recent policy actions. Dr. Bilotkach has also tentatively concluded that an examination of alliances needs to consider multiple effects in addition to price effects to develop recommendations for a full-fledged assessment of antitrust immunity for airline alliances. Mr Bilotkach provided an academic assessment of the competitive price monitoring aspects of the Empirical Study, and participated in the conference of the Empirical Study evaluators. DOT believes that its intended sole-source awardee, Volodymyr Bilotkach, is the only entity capable of providing methodologies for continuous monitoring of multiple price effects of alliances in transatlantic markets without substantial duplication of costs and without incurring unacceptable delay in fulfilling the USDOT requirements, thereby assisting USDOT in fulfilling its responsibilities under 49 USC - 41309. Notwithstanding DOT's sole-source intentions as specified and justified above in this Special Notice, any person or organization which believes that it can provide services to assess the consumer benefits of airline alliances----by performing all of the functions described above, and at the very HIGH level of QUALITY which is indispensable to USDOT----may, not later than 11:59 PM Eastern Time July 22, 2014 to tyrone.moorer@dot.gov, a Statement of Qualifications attempting to prove the submitter's capabilities.