A group of officials is poised to choose a contractor for the new passenger terminal at Louis Armstrong International Airport, a $546 million project that city leaders hope will produce thousands of new jobs and spur the local economy by bringing more international flights to New Orleans.
Two teams of construction companies are vying for the job. And as usual with big city contracts, the competition between them is shaping up as a debate over which team has more local ties, which can promise that more money will flow to subcontractors owned by women and minorities — so-called disadvantaged businesses — and which can do a better job of keeping down costs.
Big stakes are involved. The new airport terminal is part of a second-term push by Mayor Mitch Landrieu to revamp the city’s aging infrastructure, all with an eye toward showing off New Orleans for a potential 2018 Super Bowl during the city’s tricentennial.
One model for this type of strategy is Atlanta, which lured big companies like UPS and Delta Airlines with a new airport in the late 1970s, while making sure that a substantial proportion of spending on the project went to black-owned firms.
But for now, the selection committee that will decide on a contractor for the local airport is deadlocked. During a meeting this week, committee members gave both consortia competing for the job exactly the same score — 999 out of a possible 1,100. The next committee meeting hasn’t been scheduled, but each side is making its case in the meantime.
“It’s extremely significant that the joint venture that will be holding the contract has significant local ownership,” said Melissa Gibbs, part of the team that includes Hunt Construction Group, Gibbs Construction LLC, Boh Bros. Construction and Metro Service Group.
Though Hunt, based in Indianapolis, would own the biggest share, Gibbs said the local companies involved would have a 45 percent stake in the venture, adding, “This is our city. This is our town. This is our airport. We’re going to be using this airport.”
The Hunt-led team also boasts a smaller price tag, at least when viewed from a certain angle. The airport contract isn’t simply going to the lowest bidder, as would usually be the case with government jobs. The total budget is $546.5 million, regardless of who gets the deal. But the Hunt team is promising to keep overhead costs to about $25.8 million, leaving more money for the building itself. And it’s expecting a profit of only $6.5 million.
The rival team, led by Pasadena, California-based Parsons Construction and Odebrecht USA, a company based in Brazil, is expecting overhead costs of about $37.7 million and an $8.6 million profit.
Yet, not surprisingly, the Parsons-Odebrecht team disputes the idea that its rival is the more local outfit or the more thrifty one.
“You want a team that really knows how to bring value to the project and bring the project in on budget,” said Paul Flower, of Woodward Design and Build, a local firm that has signed on to the Parsons-Odebrecht team as a consultant. “If you look at the organizational chart of the preconstruction team, 75 percent of the people are going to be New Orleans people.”
Flower said Odebrecht has had an office in New Orleans for 13 years, and he brushed aside the issue of overhead costs, known in construction lingo as “general requirements and conditions.” He argued that different firms often put different types of costs into that category, making for an apples-to-oranges comparison.
On the issue of disadvantaged businesses, it may be too soon to say exactly which side comes out ahead. The Hunt team hit a snag this week when it realized that Metro — formerly known as Metro Disposal Inc., one of the city’s main garbage contractors — isn’t on the approved list of DBEs for the project.
The consortium promised to hit the airport’s goal of directing 36.49 percent of preconstruction spending toward DBEs anyway, just as Parsons-Odebrecht has.
But the preconstruction phase represents just a tiny fraction of the overall budget for the new terminal — less than 1 percent. Neither team has identified specific DBE contractors for the actual construction phase, though both have promised to hit the 33 percent DBE goal.
It is also difficult to say in which direction the mayor’s appointees on the selection committee are leaning. Five members of Landrieu’s administration serve on the committee, including Chief Administrative Officer Andy Kopplin and Director of Finance Norman Foster. But the City Attorney’s Office declined to turn over the group’s individual scoring sheets, arguing they aren’t subject to public inspection because the committee hasn’t made a final decision yet.
Both teams include contractors or subcontractors that have been politically active and done business with City Hall for years. Gibbs, Boh and Metro have all donated to Landrieu campaigns, as well as those of many other politicians. So have Woodward Design and Royal Engineers & Consultants, one of Parsons-Odebrecht’s proposed subcontractors.