Asbestos 101

In which the professor and his wife share the secrets of low bids, high profits, and your money

According to Sellers, it took Julio Otazo about an hour to prepare the document. First Otazo assumed that completion of the work would require four weekends of three days each. And because the work would be done at night and on weekends (as the airport requested), he would charge the county overtime rates for his workers, supervisors, and even himself.

From there the rest was easy. Otazo estimated that either he or his wife would be on the site at least an hour a day during each of the twelve days at a rate of $112 per hour. Cost: $1344. Tom Sellers, as project manager, would be present eight hours a day at $52 per hour for each of the twelve days. Cost: $4992. Two supervisors would be required eight hours every day, each at $37 per hour. Cost: $7104. And four regular employees would work eight-hour days at $30 per hour. Cost: $11,520. Projected cost for labor alone: $24,960.

Materials and equipment would include use of the company truck for nine days at $55 a day, sixteen cases of asbestos suits (a total of 384 suits) for a total cost of $672, sixteen cases of disposable cloth towels for $512, and $8500 worth of air filters. Estimated total: $25,000.

Insurance and bonding would run $11,000. Julio Otazo then tacked on an additional $11,000 for what he described only as the company's overhead. Rounding out the estimate was an entry for $7231, which Otazo listed as the company's profit.

The total cost, according to Otazo, was $79,539. He then argued that since MCO had agreed to do the job for a mere $71,400, the aviation department was actually saving more than $8000 on the true cost of the work. After county officials and their consultants studied the proposal and agreed to accept it, MCO began the second phase of the Burger King project on Friday, May 28, 1993, at about 10:00 p.m.

How much time was actually needed to complete the job? According to aviation department records, as well as interviews with MCO employees, the work was finished in less than ten hours, over a single night A one shift, as opposed to the twelve days Otazo had charged the county. "All of this is jacked way up there," admits Tom Sellers, the former MCO project manager who left last year to start his own asbestos-removal company. "We knew all along there was no way in hell it was going to take four weekends, three days per weekend, to get the work done. We knew we could finish it in the first weekend."

Adjusting Otazo's estimates for the amount of time the job actually took, the true cost of the project was probably closer to $9000. What happened to the rest of the money? Several MCO employees say that at about the time the project was completed, Julio Otazo began driving a Range Rover. Two employees claim that Otazo boasted he was able to afford it thanks to the Burger King job.

Julio and Cruz Otazo refused to answer questions about the Burger King project. And although a host of aviation department officials and their consultants reviewed Otazo's projections, the department remains at a loss to explain why it agreed to pay so much money for so little work. Aviation department spokesman Chris Mangos notes that because the contract was awarded as a "lump sum" agreement, MCO was entitled to the full amount whether the work required one day or twelve. But Mangos concedes that the department remains at a disadvantage in evaluating all asbestos projects. The reason? Not a single aviation department employee has been trained and certified to enter asbestos work areas, which makes it impossible for the department to inspect ongoing jobs. "This has become something of a problem for us," Mangos admits. "It's a difficult situation. It leaves us out of a circle -- the construction field -- where normally we are very familiar with the work going on."

Though the Burger King project constitutes only a fraction of the taxpayer money MCO Environmental has received as a result of change orders over the past four years, the company's methods employed in justifying its charges to the county are similar to those used in its pending claims for $13 million A but obviously on a much grander scale.

Miami International Airport's Building 25 is enormous. On a recent visit, two cargo jets and the Florida Marlins team plane were being serviced inside the hangar, and none of the aircraft came close to touching each other. By comparison Building 24 is a much less impressive structure. About one-tenth the size, it abuts Building 25, and the common walls allow free passage between the two.

When Eastern Airlines shut down in January 1991, these two hangars along NW 36th Street were among the buildings the former giant vacated. In order to attract a new tenant, the airport needed to do major remodeling, which meant both buildings needed to be cleaned of asbestos. Initially the aviation department wanted to put out the job for bid as one large contract. But Julio and Cruz Otazo objected, arguing that the project was too big and that because MCO Environmental was still a relatively small firm, it wouldn't be able to meet the requirements and therefore would be excluded from bidding. To accommodate MCO, airport officials divided the work in the two buildings into five separate contracts, listed as projects A, B, C, D, and E.

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