Latest Bids for Miami's Terminal Project Far Exceed Estimates

Many contractors who have worked for the airport in the past didn't bid for this job. They are fighting the county over unpaid claims and are gun shy about working there again.


May 17--Already almost $1 billion over budget, Miami International Airport's new North Terminal is about to get even pricier: Bids for a critical construction project opened last week totaled more than $500 million -- more than three times the amount planned.

"I don't know what happened," said a stunned aviation director, Jose Abreu.

One thing that happened: Many contractors who have worked for the airport in the past didn't bid for this job. They are fighting Miami-Dade County over unpaid claims and are gun shy about working there again. On four of the project's five parts, only one company submitted a bid.

"The owner inspires no confidence," said Scott Masson, executive vice president of Miami Lakes-based Lotspeich Co., which has claims against the county for previous work on the North Terminal and didn't bid on the new project. "If you had a different cast of players then maybe people would be interested."

Bids opened Friday are for construction work between concourses B and D (concourse C will be eliminated as part of the airport project). It is the first major project put out to bid since the county took over managing the terminal's construction from American Airlines last summer.

Money for the project comes not from taxpayers, but from airline fees.

Abreu predicted bids would be higher than MIA's $153.8 million budget as firms inflated their costs to protect against delays, but not that high. He said he will try to negotiate a better price. Another option: Reject two of the bids and start over.

"We have to sit down [with our contractors] and figure this out," Abreu said.

Any cost overrun would put MIA deeper into debt.

Even an additional $200 million would add roughly $1.30 to the per-passenger fees airlines pay to the airport to fly there. Over the next decade, MIA is projected to be on par with New York City's John F. Kennedy as the country's most expensive airport. A big part of that debt is the cost of building the North Terminal for American Airlines. Its earliest open date of 2010 would be five years behind schedule. Before Friday's bids, its price had nearly doubled, to about $2 billion.

The airport already has said it may cut back improvements to the ticketing and baggage areas because of a lack of cash. Those are budgeted at $74 million; the other remaining big project left to be put out to bid is a building between concourses A and B budgeted at $115 million.

For the current project, the estimates for structural work and interiors are what sent costs spiraling. MCM Construction of Miami was the only bidder for the structural work and the interiors. Its bid for the interior was $345.9 million -- nearly five times the $72 million budget.

That bid, more than any other, floored MIA officials.

Eugenio Jaramillo, of MCM, said he believes MIA underestimated the rising costs for raw materials such as steel and concrete. Another reason for the increase, he said, is that North Terminal has become a "five-headed monster." MCM has done work at North Terminal before and sued representatives of the previous construction manager over delinquent payments.

"You have a project that will last four or five years," Jaramillo, who was not part of the team that prepared MCM's bid. "The phasing is very difficult."

John Cosper, deputy director of MIA's capital improvement program, said the airport might reject the interior bid and break it into smaller pieces. That would allow smaller firms to participate, though it could invite chaos that plagued early North Terminal construction projects, when airport officials believe there were too many contractors and little direction.

"We want to establish a good track record with our contractors -- like paying them on time," Cosper said. "We think there is a stigma out there about working at the airport."

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