And the Winner Is...
County Manager Steve Shiver insists it's simply not true that he has already made up his mind which company will receive his recommendation for a Miami International Airport construction contract worth a whopping $610 million. The project is the largest single piece left in a six-billion-dollar MIA expansion, and represents the new manager's first crack at a big-bucks contract. (The county commission ultimately will decide who gets the contract.)
In the March 26 issue of the Engineering News-Record, a national weekly trade magazine covering the construction industry, contributor David Kohn reported that Shiver favors a team headed by Morse Diesel International, one of three consortiums vying for the lucrative job. "Shiver ... indicates that he thinks the award should go to Morse Diesel-J.A. Jones venture," Kohn paraphrases the manager as saying.
"I never said that," Shiver declares flatly. In fact the manager denies even talking with Kohn.
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The reporter, who has worked as a correspondent for the respected journal for more than fifteen years, stands by his story. "We did speak, and he said what I wrote," Kohn asserts.
If Kohn is correct, the implications are serious. It would mean that Shiver is prepared to short-circuit the contract-award process before its completion and disregard a highly critical report by the county's Office of the Inspector General.
The disputed article is just the latest in a series of controversies and blunders that have hampered the county's efforts to begin work on a vast new MIA south terminal, whose main tenants will be United and Delta airlines. The two companies had planned to shift their operations to the new facility in 2004, but now they're worried about costly delays. "We would just like to see [the contract process] go ahead and the county make a selection," says Peter Dial, a regional manager for United.
Initially airline executives were pleased with a bidding procedure that appeared fair, open, and expeditious. Last July the county commission approved a request for qualifications to find a construction-management company that would supervise the massive project: review plans, hire subcontractors, and take responsibility for keeping the job on time and on budget. Only three firms submitted proposals, but all were well-known and reputable. In addition to the Morse Diesel group, the list included a partnership between Odebrecht Construction and Parsons Transportation, as well as a pairing between Clark Construction Group and O'Brien-Kreitzberg.
Merrett Stierheim, county manager at the time, appointed a ten-person selection committee drawn from county staff and representatives of the construction and aviation industries, including United's Dial. A grading system with a maximum of 110 points would decide who won the committee's recommendation. Stierheim wanted experience and ability to be the most important considerations. The management fee a firm expected to carve out of the $610 million was less important, in the manager's view, and so counted for only five points in the grading. But an extra ten points would go to the company that best fulfilled a local-preference requirement designed to ensure that Miami-Dade residents benefit from county contracts.
Dial approved of Stierheim's emphasis on qualifications over fees. A company that lowballs its fee, he believes, is often the most aggressive in making up the difference by cutting corners. "There is a saying," Dial explains. "The low bidder is the guy who makes the biggest mistakes.'" In this case, however, the mistakes began early. This past October 18, as the selection committee received proposals, a staffer for an airport consultant mistakenly opened the envelopes containing each firm's proposed fee for the project and informed committee members. The envelopes were supposed to have remained sealed until after the bidders made presentations and underwent interviews. Subsequently those committee members who learned of the fees were required to sign affidavits stating they would not be influenced by the information.
By the end of January, the committee had graded the proposals and heard the presentations. Before factoring in proposed fees or local-preference points, the rankings were very close: Odebrecht-Parsons ranked number one, followed by the Clark Construction team and in third place Morse Diesel. Though the proposed management fees varied dramatically -- Clark wanted $16 million, Odebrecht-Parsons $24.4 million, and Morse Diesel $50 million -- those differences mattered little in the overall score.
But when it came time to account for local preference, everything went topsy-turvy. As specified in the county's request for qualifications, local-preference points would be determined by the percentage of each company's employees who lived in Miami-Dade. The total number of employees was irrelevant in this equation.
Morse Diesel's local office had only two employees, a secretary and an administrative assistant. But both of them lived in Miami-Dade. The firm thus received the maximum points for local preference. Odebrecht-Parsons, with 40 Miami-Dade residents among its 60 local employees, fared much worse, even though many more county residents would benefit from the airport contract. When the new points were added, the rankings completely changed. Morse Diesel went from last to first, followed by Clark and Odebrecht-Parsons.
Committee members were disturbed enough by the dramatic reversal to postpone voting on a recommendation; instead they asked for an investigation by the county's inspector general (IG). On February 22 committee members met again, but the IG's report was not finished. County staff, however, assured them that the local-preference points had been calculated correctly.
Rather than wait for the IG's report, committee members decided to submit a recommendation to newly appointed County Manager Shiver without delay. But they didn't recommend a company; they recommended a revised process. The manager, they suggested, should instruct each of the three firms to submit a new management fee, and the lowest fee should win.
Aviation department deputy director Carlos Bonzon, who served as committee chairman, says there was no need to wait for the IG report because the manager alone would decide which firm to recommend to the county commission. All three bidders were qualified, he points out, adding that the contract needed to be awarded quickly and that taxpayers would get more for their money if the lowest fee were the determining factor. On March 2 Bonzon forwarded the committee's recommendation to Shiver with a preliminary report by the IG attached.
Three days later Inspector General Christopher Mazzella released the full results of his investigation. Mazzella found airport staff apparently had not performed a proper investigation of the local-preference claims for at least two of the companies. Clark, for example, did not operate out of the office the company had listed on its application. Morse Diesel, which had garnered 100 percent of the local-preference points, had leased its office only nine days prior to submitting its bid, and staffed it with two low-level employees. "It is difficult to support that two administrative employees constitute the firm's headquarters," wrote Mazzella in reference to Morse Diesel.
For three weeks after the release of Mazzella's report, the contract-award process languished. Then the Engineering News-Record published its story reporting that although Shiver had decided to eliminate local preference, he still thought the award should go to Morse Diesel.
But nine days later, on the afternoon of April 4, Shiver sent a memo to the County Attorney's Office asking for an opinion about local-preference points. If construction writer David Kohn is to be believed, the manager's request represented a turnaround. "It is my intention to direct the selection committee to reconvene in order to address this matter properly," Shiver wrote.
New aviation department director Angela Gittens has received a briefing on the matter and is optimistic a resolution is in sight. After the contract is awarded, she believes it might be prudent to revisit whether it's in the county's best interests to have a local-preference requirement for big airport contracts.
But United's Dial says he would not be surprised if the entire matter ends up in court, delaying matters even further. "Going by the history in Miami," he says, "it seems like any contract issued ends up being protested." Judging from the complications surrounding the terminal contract, it's not hard to see why.
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