Asbestos 101

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

But Otazo's otherwise meticulously prepared claim neglects to identify on which days those 67 employees were required for cleanup. Also, only one of the nine "heavy downpours" is dated: June 29, 1992. Daily logs kept by a county consultant at the job site show 52 employees working on June 30, 49 on July 1, and 51 on July 2 A but never the 67 claimed by Otazo. Furthermore, the consultant's logs do not indicate whether all these employees were working to clean up storm water.

A complete review of the consultant's logs covering eight months reveals only one other three-day period during which an unusually high number of employees were working, and those figures were 40, 55, and 60 A again not the 67 claimed by Otazo. The records show that MCO's normal daily work force ranged between 20 and 30 employees.

In a memo written to the airport's consultants, Julio Otazo himself raised further questions regarding the manpower devoted to rainstorm cleanup. "We are getting heavily flooded on the fourth, third, and second floors in Building 24 every time it rains," Otazo wrote on June 25, 1992. "It was so much water (rain) yesterday that a ten-man crew has been removing water for the last two days. Thanks, Julio."

Another payment MCO is demanding from the county is described in Otazo's claim as "overinspection." To guarantee that work is done to the county's specifications, as well as to ensure that a contractor abides by state and federal regulations governing asbestos-removal procedures, the aviation department's consultant A in this case a company called PSI A sends an inspector to the site every day. During the project involving buildings 24 and 25, PSI cited MCO Environmental for what the consultant considered to be problems. On one occasion, for example, the inspector found notably high levels of asbestos in an area that already should have been clear. On another occasion, MCO's work was judged to be inadequate, and the firm was required to redo certain portions of the job. MCO has alleged that the citations were not justified but were the result of inspectors who were prejudiced against a company owned by a Hispanic female. The Otazos are now demanding $152,577 for the time it took to satisfy PSI's inspectors.

All of this Athe hurricane, the Army, the rain, the bigoted inspectors, as well as a number of other problems MCO claims to have encountered A conspired to delay the project for nearly five months, according to Julio Otazo's claim. Those delays were extremely costly to the company. How costly? In addition to the $419,567 in lost business opportunities caused by the delay on Building 25's second floor, Otazo is demanding another $2,067,773 because of delays in other parts of the building.

The aviation department's heart was in the right place. In 1992 Greenwich Air was willing to double the size of its maintenance and repair operation, hire a score of new employees, and give a little boost to the local aviation community, which was still reeling from the closings of both Eastern and Pan Am. All Greenwich asked was to move into Building 21 quickly. The aviation department couldn't say no.

But there was a problem. The department was planning to remodel this old Eastern hangar. In fact, airport officials had already accepted a bid from MCO Environmental to remove the asbestos at a cost of $755,745. That contract, however, was bid on the assumption that the building would remain empty, which makes working conditions easier and cheaper.

Despite the change in plans and the presence of Greenwich Air, MCO proceeded with the work, though an extra four and a half months was required to complete it.

In January 1994, more than a year after the job was finished, Julio Otazo submitted a claim to the county that reflected MCO's willingness to work under more difficult conditions. Otazo is demanding an additional $5.7 million.

In many ways Otazo's claim document for Building 21, which is nearly 500 pages long, is even more a mystery to the lay reader than the documents submitted for Building 24 and Building 25. For one thing, almost two-thirds of the total claim (about $3.8 million) is based on information the Otazos say is confidential and not open to public inspection.

Among the demands based on such confidential information is $1.6 million for lost business opportunities and gross profit from jobs the company was unable to undertake because Building 21 proved to be more difficult. New Times asked Julio and Cruz Otazo to identify the specific business opportunities they missed, but they refused to respond.

Combined with the alleged losses from buildings 24 and 25, the total amount of gross profit MCO was forced to forgo in 1992 adds up to $4.1 million. According to industry standards, gross profits represent up to 30 percent of revenue for a highly profitable company. Using that figure, Otazo appears to be claiming that MCO, had it not been hamstrung by its airport projects, would have won approximately $13.7 million worth of contracts in eight months during 1992.

While MCO critics are skeptical of that claim, county officials could easily check it and other assertions made by Julio and Cruz Otazo if they would simply audit MCO's financial records. On claims totaling more than $13 million, such a request would not be out of line, says David Sever, president of DPC General Contractors, an MCO competitor. "In my experience, when we had a much smaller claim with a federal agency, their analysis of our claim was based on an audit of our books and our expenses," Sever explains. "Has the airport even attempted to substantiate any of this through some sort of audit?"

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