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Change orders add millions in airport costs; Is this how Broward should do business?

By William Hladky, FloridaBulldog.org 

Rendering of east end of the expanded south runway with US 1 tunnels

Rendering of east end of the expanded south runway with US 1 tunnels

For the third time in three years, Broward Commissioners voted last week to pay more — $2.5 million this time – to the company that’s managing the ongoing $800 million runway expansion project at Fort Lauderdale-Hollywood International Airport.

The original 2011 contract with Parsons Transportation Group was worth $10.3 million. The commission’s unanimous vote last week to amend Parson’s contract a third time increased its value to $33.5 million.

While voting for the increase, Commissioner Lois Wexler worried aloud that the county’s practice of increasing the scope and cost of existing contracts borders on an “abuse” of the contracting process that she thinks may have become endemic in the Aviation Department’s culture.

“The original contract goes out, and it changes and changes,” Wexler said. “For me, it’s a procedural issue; it’s a concept of how we do business around here…It is a policy issue that this commission has to decide if it is okay to do business that way.”

No other commissioner seemed to agree, and none responded after Wexler – the commission’s longest serving member – said her piece except Mayor Tim Ryan, who brushed aside Wexler’s comments saying, “The first two amendments have been justified…in previous discussions before the commission.”

Broward Commissioner Lois Wexler

Broward Commissioner Lois Wexler

By amending an existing contract, county bureaucrats bypass the time consuming task of seeking bids on the work. And while acknowledging that it is sometimes to the county’s advantage to amend an existing contract, Wexler fretted that the practice appears to have become too frequent “and that bothers me,” she said.

The original contract in 2011 was for $10.3 million. In December 2012, the commission increased it to $29.4 million. It went to $30.9 million last June, and $33.5 last Tuesday.

Each contract amendment gave Parsons more work. The latest amendment provides Parsons with additional funds for basic services, and to continue to deploy inspection and surveying teams as required by the Federal Aviation Administration.

The county’s original contract with Parsons stated that “an amendment…will be negotiated” to cover additional project management.

However, nowhere in Parsons’ contract or in the supporting documents provided to the commission in 2011 is there any indication how much the contract would increase.

Broward Aviation Director Kent George defended the Parsons contract to the board.

“In all fairness to the contractor, when they were first brought on, they were brought on to work with us to put the thing together,” George said.

Parsons Transportation is a subsidiary of Parsons Corporation, an engineering and construction company, headquartered in Pasadena, California.

ITEM ON CONSENT AGENDA

The contract increase for Parsons had been set to sail past the commission – and the public – as an item on the “consent agenda,” a place on the meeting’s full agenda where noncontroversial items not requiring discussion or independent action are placed for a swift vote of approval. Thirty items were listed on last week’s consent agenda.

But Wexler and county Mayor Tim Ryan “pulled” the item from the consent agenda for discussion.

The use of the consent agenda for contracts can be controversial. In 2011, the Statewide Grand Jury criticized the Broward School Board for placing contracts worth $1 million or less automatically on the consent agenda.

Contracts “wind up side by side with innocuous resolutions in support of ‘National Magnet Schools of America Month’ and the like,” the grand jury report stated.

Ryan pulled the contract amendment proposal to make sure its approval would not jeopardize possible legal action against another company that has allegedly missed deadlines. Michael Kerr, an assistant county attorney, reassured Ryan the amendment’s passage would have no effect on that.

Wexler said had another reason. “The abuse of the change order is what bothers me,” she said in an email after the meeting. “It is used very often…I would like to see the board give more direction as to its use.”

“The culture of an organization becomes the practice…usually (it) begins in a subtle way and progresses from there. The use of change orders is an example…If questions are not asked it knows no boundaries,” Wexler said

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