A few years ago, I believe at an AAAE conference, I saw three beleaguered airline representatives facing frustrated airport infrastructure advocates, explaining why they would not support an increase in the Passenger Facility Charge. That panel session was one of the liveliest, freshest and most provocative I’d seen in any conference focused on any transportation mode.
But at the ACI-NA conference earlier this month, I saw another one. This time, it was not “us” versus “you” but a “we’re all on the same side, just arguing about the best trail up the mountain, depending on the hikers involved.”
The session was “Poised for the Build: Capital Program Management Strategies in a Recovering Economy.” Former Hartsfield-Atlanta International Airport Ben DeCosta, Metropolitan Washington Airports Authority (MWAA) deputy vice president for engineering Stephan Smith, and Iftikhar Ahmad, direction of aviation with the New Orleans Aviation Board, discussed their experiences with major capital programs in an unusually spirited, honest exchange.
Before the Atlanta airport launched its $5.4-billion master plan in 1999—including a $1.25-billion 5th runway, $1.4-billion international terminal and $600-million consolidated car rental facility—virtually every project it had ever done was design-bid-build (DBB), said DeCosta.
But with this unprecedentedly complex program, “we hired consultants and introduced design-build [DB] and CM-at-Risk,” [CMAR] he said. There were lots of hiccups along the way—two bidders who formed a joint venture to become the sole bidder in the second go-around, open-book negotiations, a solicited second team, city council opposition and an indicted subcontractor. But alternative project delivery was vital to the ultimate success of the capital plan, DeCosta said. “I felt that to lower risk, we needed collaboration. I doubt we’d have been successful with DBB.”
But the MWAA felt that its staff understood DBB, and could handle the risks, said mith. Pointing out that a municipality is different from an airport authority, Smith said: “A borrowing authority relies on budget—we trade off schedule to make it across the finish line. That drove us to DBB and owner risk…we can’t push a DB team as much.”
When Smith noted that DBB had worked well so far, DeCosta contended that in DBB, “you don’t know the quality of the people. With CMAR, it’s based on quality.” He added: “Stephan, you got lucky.”
Smith countered: “You can control the quality of the firms in DBB…risk, in low bids, is not a major component of the pie. You have to manage‑inspection criteria, etc.” He invoked long-term project management contracts, supplemental inspections and reviews and third-party reviewers.
Ahmad chimed in, citing an advantage of CMAR in fast-tracking projects: “When you get a bid, how long do the bidders have—30 to 45 days? Can you expect a team to get familiar with 2,000 drawings and put an estimate together? CMAR gives a team two years to … get ready.” By the time the proposals are due, “He’s chomping at the bit.”
The New Orleans airport board is in the midst of re-bidding a CMAR contract for a new $546-million terminal due to disputes among the two original bidding teams about scoring, and a controversy over one former subcontractor participant accused of racism.
Ahmad said the teams agreed to take on the risk of large amounts of RFIs and “rainy days.” “We hope to have a design by July next year, and try to finish by May 2018. I think [CMAR] will get us there.”
DeCosta, though a fan of alternative project delivery, joked: “You better say your prayers.”
The debate was lively and friendly. When Smith stated that “the general contractor needs to be at the table, invested,” deCosta joked: “Invested in the owner’s best interests.” Smith replied: “In the end, the owner is still the owner.”
Did quality-based selection constitute an unnecessary cost? came the question.
“Design cost will be minimal, but it can drive the construction cost,” acknowledged DeCosta. “But I strongly feel we cannot compromise on quality. Who here would accept the lowest bidder to do their heart surgery?”
Smith countered: “There is a growing philosophy in regards to intellectual property. Some with view quality-based selection as getting onto the shortlist, then being the low bidder. If you have the low bid, who goes to work on the project? Not the [quality of] people who attend these conferences. So the owner doesn’t get the benefit of the intellectual property.”
Moderator Arnold Rosenberg, senior vice president with Parsons Brinckerhoff, tied the friendly debate together: “Every project is different. Having multiple means of project delivery allows the flexibility to meet individual project needs.”
The panelists were unanimous, however, on the issue of promoting MWBE programs, especially on publicly funded projects. “In the end, regardless of type, we are in an industry with responsibility for its future,” said Smith. “We have to resist the forces that say [these programs] are not necessary anymore.”