Costs, changes stalled terminal at MIA

Sep. 6--Subcontractors had to halt work because doors were locked and no one had the key.

A prime contractor had no clue how much nearly a dozen jobs cost -- and "no clear direction" on how to proceed on masonry wall, elevator shaft and electrical work.

The construction manager bypassed a qualified low bidder for a paving contract in favor of a business partner whose budget later ballooned by millions.

As Miami International Airport unveiled its gleaming new 1.7 million-square-foot South Terminal last week, passengers could savor the roomier concourses and fresh sheen of the floors.

What wasn't so visible: the discord, delays and errors that helped add hundreds of millions in cost and 2 1/2 years to the project's timetable. Planned for a budget of $799 million six years ago, the terminal's tab is now $1.1 billion.

A Miami Herald review of 100,000 pages of correspondence sheds light on how a project conceived on a "fast track" became mired in change orders, angry subcontractors and escalating costs.

In just the 15 months since May 2006, Miami-Dade County issued nearly 1,500 bulletins, field directives and work orders directing the construction manager to do work that wasn't part of the original contract. Even the choice of color for a toilet partition hit snags.

Airport officials and the key contractors responded to Miami Herald inquiries with written statements saying construction was hampered by delays that often come with complex construction projects, but that the result will benefit travelers.


The South Terminal's buildup dates back a decade, to 1997, when the first batch of architectural and engineering contracts for the project were awarded. County oversight was largely provided by Dade Aviation Consultants, which has had a lucrative tenure as the Aviation Department's consultant since 1992.

The initial contract for the firm hired in 2001 to manage construction -- Parsons Odebrecht Joint Venture, or POJV -- was worth $659 million, with a "substantial completion" date of January 2005. The first flight came 31 months later. POJV's contract is now worth $841 million.

POJV told The Miami Herald that part of the reason for so many changes to the original contract stemmed from the county's decision to "fast-track" the South Terminal -- that is, to build portions of it even as other portions were still being designed.

The firm said the terrorist attacks of Sept. 11, 2001 -- which mandated "dramatic changes" in the security system and design -- "led to the county's decision" to take the fast-track approach.

But an MIA spokesman told The Miami Herald that the decision for fast-tracking was actually made months before 9/11 by the county and a committee of airport, county and industry officials during negotiations with POJV, whose contract was formalized in August 2001, the month before the attacks.

Asked about the discrepancy, POJV issued a revised statement deleting the "fast track" reference. Nonetheless, POJV said the new 9/11 demands and the county's quest to speed along construction created a "most difficult environment."


Even before construction officially began in November 2002, questions surfaced about conflicts of interest and costs involving a $49 million contract for utility and paving work for the terminal's two concourses.

Four firms bid, yet a selection committee of three POJV officials bypassed the low bidder in favor of a firm that bid $4 million higher -- Gilbert Southern Corp.

At the time, one of POJV's partners -- Parsons Corp. -- was a joint-venture partner with Gilbert Southern's parent firm, Peter Kiewit & Sons, in a highway project in Colorado, records show.

The low bidder said the arrangement posed conflict-of-interest questions. In memos, MIA and DAC disapproved of bypassing the low bidder.

POJV convinced them otherwise. It said two committee members working for Parsons were not aware of the business tie and that the third worked for Odebrecht, negating any conflict. It argued the low bid wasn't necessarily the best value, and that Gilbert Southern's experience and know-how "could sufficiently offset a higher bid price."

But the company quickly encountered delays, errors and cost increases that boosted the contract to $55 million.

In memos to POJV, Gilbert Southern blamed "unforeseen conditions" and the actions of others, yet POJV accused it of making "chameleon-like changing excuses [new excuses were uttered after the previous excuses were refuted]."

In April 2006, POJV issued a "Notice of Default" to the firm, which was then called Kiewit Southern, detailing how its "procrastination" delayed work. Kiewit declined to comment. MIA said the company later finished the job and that the parties settled the dispute.


By July 2003, the flurry of change orders threatened to "overwhelm the trade contractors and the craftsmen, as well as inspectors and Building Department staff, and lead to errors in what actually gets built and accepted," Loren W. Smith, a POJV project director, wrote to DAC.

Discord between construction manager POJV and DAC, the county's consultant, dogged the contract, with pointed memos back and forth about who was at fault for delays.

'We understand that POJV's request for 'drawings' is solely geared to the POJV's strategy in delaying the project," DAC project manager Marty Turner wrote in 2004.

Neither DAC nor POJV addressed Miami Herald questions about that memo. Turner no longer works in Miami and could not be reached for comment, despite an interview request made through DAC.

Meanwhile, POJV's frustration with DAC was also apparent: The South Terminal job was so far behind that even small details carried a tone of urgency.

"It is critical that the color for the toilet partitions are selected by the Owner/A/E and returned to our office without further delay," POJV wrote to DAC in July 2004, two months after a contractor had pressed for a color.

The friction continued, with POJV accusing DAC of "attempts to shift the responsibility" over change orders, and taking "exception to the general tone of your letter" in another 2004 dispute over costs.

DAC downplayed the apparent rancor in these exchanges, which added to already voluminous paper trails and red tape.

"Discussions like this are a normal part of a project of this size, scope and complexity," DAC program manager Paul Francis wrote, saying the issue was subsequently resolved.

While saying wrangling on huge projects is "common," Aviation Department Deputy Director Max Fajardo said the impact on the "ultimate cost and time of the project won't be determined until the project is closed out."


The delays were felt in the field.

Subcontractor Homestead Concrete & Drainage Inc. was hired in September 2003 and told its work would begin that December. It promptly spent $50,000 on a new concrete machine for the job.

"It is now January of 2005, and we still have not been able to start any work," wrote Homestead Concrete's Alfredo Cordero, saying material costs had jumped 25 percent in that time. Cordero declined to comment further.

By September 2006, contractor Hensel Phelps Construction Co. wrote to POJV that it could not guess how long it would take or how much it would cost to complete a series of tasks ranging from electrical work to masonry wall restraint installation. The reason: "There is no clear direction for Hensel Phelps to proceed."

That same month, POJV wrote of another cause for delay: locked doors on some rooms.

Specifically, a POJV manager wrote, subcontractors "are often unable to gain access to the rooms when they need to perform work, due to the doors being locked. As a result, work is lost and delays result when the search for access, or a key, begins."

Saying the issue had been discussed "many times," he again asked for keys.

Fajardo, of the Aviation Department, said the rooms contained sensitive security equipment, that procedures were in place for subcontractors to gain access, and that the situation was resolved in two weeks.

Miami Herald business writer Ina Paiva Cordle contributed to this report.