The first phase of $1.5-billion expansion at Mineta Airport began with new concourse work. (Photo courtesy of San Jose Mineta International Airport)

Back in May it appeared that Bechtel Infrastructure, the country’s largest design-build contractor, won the $712-million contract to upgrade Norman Y. Mineta San Jose International Airport. In mid-August everything changed when negotiations between the city of San Jose and Bechtel broke down. Bechtel did not agree with San Jose’s insurance requirements regarding the amount of general liability coverage and the duration of liquidation damages. The city quickly reacted and announced negotiations with Greeley, Colo.-based Hensel Phelps Construction Co.

According to Valerie Kazanjian, a Bechtel spokesperson: “We did not ‘lose’ the contract with the City of San Jose. We were in the contract negotiation stage with the [city] and could not reach an agreement over several issues. The relevant contract issues on which the agreement could not be reached were very specific to the city of San Jose’s contracting policies and requirements and our anticipated role on this design-build contract.”

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    Hensel Phelps, which has a district office in San Jose, was the second-highest ranked firm in the competition for the airport contract and moved up the list after Bechtel pulled out. Valued at $320 million in base projects plus optional projects worth an estimated $392 million, the contract’s cost and scope of improvement program includes modification of existing Terminal A, two phases of demolition of Terminal C, construction of a new Terminal B and other work.

    Rich Dressler, spokesman for the airport, feels optimistic that Hensel Phelps would be a good choice given its background in both airport projects and design-build. The company was one of the first contractors to work on a city of San Jose design-build contract by constructing the $24-million San Jose Central Service Yard, a vehicle maintenance facility, among several others.

    Jon Ball, Hensel Phelps’ vice president and district manager, says his company expects to enter negotiations after Aug 30. He notes the job may pose some challenges since contractors work on a site where they must manage user-driven changes by the airlines and ever-changing security issues. “Our management will weigh the risk-reward considerations on this project once we are able to review the contract,” he says.