LAX Airport Audit Shows Contract Lapses

By not following all of the rules, the technology department could not ensure that its money is being spent in the best interest of the public.


A review of more than $63 million in technology contracts for Los Angeles World Airports has found widespread lapses in oversight and management failings at all levels of the process.

In some cases, contract administrators signed off on payments without making sure the airport department had actually received what it had ordered. In others, technology staff members placed orders without getting formal approval.

The internal audit obtained Monday by the Daily Breeze found no deliberate wrongdoing or missing funds. Instead, it described a contracting process that ``does not appear to be as efficient or effective as possible.''

It noted that, by not following all of the rules, the technology department could not ensure that its money is being spent in the best interest of the public.

The department -- and the airport agency as a whole -- has been working to tighten its contracting procedures, officials said. Its chief information officer, Louis Hook, said many of the contracts singled out in the audit were signed during a time of high turnover and budget problems in his department.

``We've been moving on these before the audit, during the audit and after the audit,'' he said. ``You will continue to see improvement. The structure is there to continue down that path.''

The audit was first issued in late January. Hook announced his resignation less than two weeks later to become a private consultant. Hook, who has not yet stepped down, said Monday that his resignation was not related to the audit's findings.

Meanwhile, airport commissioners on Monday voted to offer former LAWA Executive Director Lydia Kennard a one-year consulting contract worth up to $200,000. Their vote came over the objections of a small crowd of Westchester residents, who blame Kennard for what they see as airport expansion policies.

Kennard will continue to focus on airport planning and on an effort to spread more air traffic to smaller airports in the suburbs. Her consulting contract provides for two possible one-year extensions.

She'll be billing $250 an hour.

Kennard back

Kennard retired earlier this year as executive director of LAWA, the city agency that runs Los Angeles International Airport and three smaller airports.

It was her second stint as the head of the agency; she also served as director from 1999 to 2003.

This time, she managed to negotiate a settlement with LAX's neighbors, ending years of lawsuits and shelving some bitterly controversial airport plans. She also oversaw the start of a project to reconfigure the southern runways, and a floor-to-ceiling renovation of the aging international terminal.

But she also was in charge when airport planners put forward an idea for moving the northernmost runway closer to Westchester.

Airport commissioners unanimously applauded Kennard, describing her as a ``superstar'' with unmatched experience and expertise. And they emphasized that staff members and consultants don't set the policy of the airport agency.

``At the end of the day, it's the board that decides what the policy is,'' board President Alan Rothenberg said. ``Don't kill the messenger.''

The audit examined 10 major technology contracts issued since 2002 by LAWA. Those contracts included more than $63 million for security systems, software, telephone service and other electronic goods and services.

Often, the audit found, technology staffers began putting together those contracts before they had a clear understanding of what they were requesting. That yielded incomplete or inaccurate proposals -- and meant the airport agency might not have gotten the best-qualified or least-expensive bidder for the job.

The technology department also misused something called ``piggyback contracting,'' the audit found. Piggyback contracting means joining an existing contract already issued by another government agency -- ``piggybacking'' on a citywide contract for computers, for example, instead of signing a separate computer contract.

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