Asbestos 101

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

The answer is no. In fact, Narinder Jolly, the acting assistant director responsible for settling MCO's claims, says he's not even sure if the aviation department or its consultants have requested the confidential financial information MCO says it is willing to release to airport officials.

In filing nearly 1000 pages of documents in support of MCO's claims, Julio Otazo has buried the aviation department under a mountain of paper. He has included everything from National Weather Service rain measurements to numerous photographs depicting working conditions. Memos, letters, notes A all are included. The material weighs almost ten pounds.

Should MCO succeed in all its demands, the result will be a far bigger payday than the actual job of removing asbestos ever could be. In fact, simply preparing the claims could prove to be a highly lucrative venture. Julio and Cruz Otazo want the county to pay MCO nearly $200,000 for the time and effort spent assembling claims materials for buildings 21, 24, and 25.

That material is now being reviewed by Dade Aviation Consultants, whose job is to advise county officials about a range of matters. The consultants will then issue a recommendation. But from there the process traditionally becomes a matter of negotiation, not investigation. The aviation department has a history of being more concerned about the cost of a negotiated settlement than with determining the validity of a contractor's change-order claims. Under such a system, it makes sense for contractors to inflate their claims and to approach their business not as profits from contracts, but profits from change orders. Furthermore, the aviation department does not legally require that contractors' change orders be accurate. Assistant County Attorney Deborah Mastin, who is based at the airport, explains that every contract agreement is entered into with "implied good faith." Violation of that good faith doesn't necessarily qualify as a criminal act. Disputes can be settled through civil lawsuits, though at the Dade County Aviation Department, negotiation is more common. Cargo Building 2142 is a case in point.

In 1991 MCO was the low bidder on an asbestos-removal project at Building 2142, but soon ran into problems such as power outages that suspended work. By the time the project was completed in mid-February 1992, the company had made it clear the delays were going to cost the county. MCO originally bid the project for $274,110. A year later the firm submitted a claim for an additional $289,000.

On September 21, 1993, Julio and Cruz Otazo met with three county officials: George Canelas, aviation department project manager; Alejandra Parapar, acting chief of miscellaneous construction contracts at the airport; and Chany Almazan, acting deputy chief of miscellaneous construction contracts. After some negotiation, an agreement was reached. The county would pay MCO $142,000.

The aviation department's file for Cargo Building 2142 contains no information about the nature of that settlement or details regarding which of MCO's claims were being honored and which were being rejected. But the settlement obviously pleased the Otazos; a week later Julio Otazo wrote Canelas to thank him and the generous members of his department: "We praise you and the representatives from [the Dade County Aviation Department], Ms. Parapar and Mr. Almazan, for your very professional behavior, fairness, and willingness to close this claim in a satisfactory manner both to the Owner and the Contractor."

Otazo had reason to be pleased. The $142,000 settlement with the aviation department was far more than either of the county's two paid consultants believed MCO deserved. After Otazo submitted his original claim for $289,000, department officials asked consultant PSI to analyze the numbers. The consultant argued that Otazo had failed to prove most of MCO's claims and thus the company was due only an additional $45,124. The department then sought a second opinion from Dade Aviation Consultants. Again the consultants found Otazo's claim to be largely unproven, but their assessment of reasonable costs was higher than PSI's. "Some entitlement is due this contractor," John Parrott wrote on behalf of Dade Aviation Consultants. "We believe that the amount of this entitlement should fall somewhere between $45,000 and $90,000." (None of the consultants working for the aviation department would speak to New Times about MCO's previous or pending change orders.)

In December George Canelas wrote a memo to his supervisor, Narinder Jolly. Canelas, however, did not mention the fact that the settlement with MCO was far greater than the consultants' recommendations. Instead Canelas simply noted that MCO had been asking for $289,000 and the aviation department had settled the claim for a mere $142,000.

Jolly, the airport's acting assistant director for facilities, today says that his staff has reviewed MCO's various projects and change orders, and has found nothing irregular. "Each request was evaluated on its own merits," Jolly adds. "Only what was justified was approved."

Not every public client of MCO Environmental has been so accommodating as to prompt letters of praise from Julio and Cruz Otazo. The Dade County Public Schools, for example, has been much more rigorous in questioning MCO's actions and claims. Ironically, this more disciplined relationship has taken place amid a seeming conflict of interest.

The school district's department of asbestos management is headed by Ralph Cruz-Mu*oz, who oversees the annual bidding process that determines which asbestos-removal firms do business with the school district. In addition he supervises the inspectors responsible for ensuring that contractors perform their jobs properly. He is also married to Julio Otazo's cousin. "It has never gotten them one iota of work," Cruz-Mu*oz states emphatically. "Actually, I've had some of my biggest problems with them."

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