Miami International Airport wants to waive bidding rules to allow its main contractor to take on a $65 million renovation of a concourse that American Airlines wants upgraded quickly.
The high dollar amount — $65 million is more money than Miami-Dade spends each year on its entire library system — is enough to turn heads in the county’s ultra-competitive procurement arena. But add in contractor Odebrecht USA’s past flare-ups involving its parent company’s commercial ties to Cuba, and the spending decision brings extra potential for controversy when Miami-Dade commissioners are scheduled to consider it on Tuesday.
“There is no emergency in my opinion that merits a bid waiver or a change order of this magnitude,” said Commissioner Esteban “Steve” Bovo, the son of a Bay of Pigs veteran and a top critic of Odebrecht on the commission. “Obviously, I’m not supportive of a no-bid” contract.
The proposed $65 million contract would let Odebrecht and its partner, Parsons, shift to Central Terminal’s Concourse E as they wind down their work on American’s primary home in the North Terminal’s Concourse D. American wants a quick renovation of the dated E concourse to make room for more flights after its merger with US Airways. Airport officials see a risk of those planes heading elsewhere if MIA doesn’t act promptly.
Sign Up and Save
Get six months of free digital access to the Miami Herald
“The airport is a business. Businesses need to react,” said Emilio González, the county’s aviation director. “I’m using the tools at my disposal to maintain the growth and viability of this airport.”
Procurement dollars tend to spark the fiercest fights in Miami-Dade government, with a well-paid lobbyist corps pushing to either get the contracts for their clients or undo the awarding to a rival. It took more than a year to pick a firm to oversee the county’s $1.6 billion sewage-system redo, and even something as trivial as a kite-boarding stand on a county beach can generate boxes of bid-protest documents.
After several flare-ups at the commission this year, Miami-Dade Mayor Carlos Gimenez in May announced plans create a task force on procurement reforms. A spokesman said Friday the administration is close to finalizing the panel’s roster.
To waive bidding rules, MIA must secure nine votes on the 13-member commission. Fast-tracking the three-year Concourse E project could give Odebrecht a consolation prize after seeing its Airport City project fizzle.
González, appointed by Gimenez in April 2013, has been unwinding MIA’s long-standing plans to have Odebrecht develop the Airport City commercial complex on airport land. With MIA growing, González said the area will be needed for core airport functions and recently said the county itself might build a hotel there rather than tapping Odebrecht for the project.
In July, Odebrecht threatened legal action to recover the millions it spent pursuing the project, citing the county’s “oddly timed” reasons for not moving forward in a letter by Odebrecht USA chief Gilberto Neves. Last week, Neves was sounding far more accommodating on the lost business than it did in the July 7 letter. “We said we reserved the right [to sue], but we’re not litigating,” Neves said. “We’re not a litigious company.”
Odebrecht’s Cuba ties came into play during the Airport City squabble. Odebrecht’s parent, Brazil’s Odebrecht Group, has a subsidiary, Odebrecht Infrastructure Latin America, which does port and airport work for Cuba. Federal law bans governments from penalizing a would-be contractor for a parent’s Cuban commerce, but the connection brought public condemnation from the most anti-Castro county commissioners. Bovo said the consternation continues, even if he’s not legally able to consider it.
“The county attorney has been very clear that these things cannot enter into our deliberations,” said Bovo, whose district includes Hialeah. “But I know it’s an irritating issue for many many, many members of my community.”
Coral Gables-based Odebrecht USA also built the county’s Adrienne Arsht Center for the Performing Arts and is one of the largest public-sector contractors in South Florida. When it took over the North Terminal contract in 2006, it was already the contractor on MIA’s massive South Terminal effort.
At the time, American was overseeing the North Terminal project itself, but Miami-Dade yanked it away amid years of delays.
American accounts for 70 percent of the airport’s nearly 19 million passengers, and US Airways for another 6 percent. Thanks to its Latin American connections, Miami remains a key hub for American amid cut backs elsewhere by the combined airline.
“Their growth is our growth,” González said of American.
Airline fees and concourse sales pay all of MIA’s roughly $1 billion yearly budget, though property taxes serve as a backstop for a small part of the airport’s $5.8 billion debt. The airport recently received a favorable credit report by Moody’s, which affirmed MIA’s low-risk rating (A2) and said MIA was “well positioned to maintain its position as the main point of international service for the new American Airlines.”
Mike Hernández, Gimenez’s spokesman, said MIA did not need to borrow money for the Concourse E project, which would be funded out a reserve maintenance account. Moody’s noted the $273 in debt for every MIA passenger is the among the highest in the country. And with Brazil’s economy slowing, Moody’s warned MIA may see softening in the airport’s top Latin American market.
González said American wasn’t ready to commit to Concourse E activity during the contentious US Airways merger. That meant there was no time to launch a standard bid process, which he said could take two years. In an Aug. 29 letter to González, American called Concourse E “woefully inadequate” and asked for expedited approval of the Concourse E improvements, which include fixing code violations, redoing the sprinkler and lighting systems, and adding gates.
“Failure to timely complete the E Satellite project will likely delay AA’s growth plans at MIA and result in fewer flights at the airport than would otherwise occur,” wrote Michael Minerva, American’s vice president for government affairs.
Miami Herald staff writer Patricia Mazzei contributed to this report.