By Dan Christensen, FloridaBulldog.org
A secret Broward County Auditor’s report has found a $24.5 million cost overrun in the construction of the new south runway at Fort Lauderdale-Hollywood International Airport.
The June 18 draft report obtained by FloridaBulldog.org attributes most of those additional costs to “county requested changes in the scope and timing of the work” intended to keep the project on schedule.
Still, the report says $1.5 million were “excessive and avoidable costs” due to “inadequate oversight and review” by two companies hired by the county as program and construction project managers, AECOM Technology and Parsons Transportation Group.
The report recommends that County Attorney Joni Armstrong Coffey’s office consider suing AECOM and Parsons to recover the $1.5 million, plus “fees paid for their inadequate oversight and review.” It also suggests that County Administrator Bertha Henry require Aviation Director Kent George to ensure AECOM and Parsons “provide adequate oversight and review” going forward.
No lawsuit has been filed to date, and the audit report remains officially confidential. Both companies have vigorously denied any impropriety in discussions with the county that have been going on quietly for months.
County Auditor Evan Lukic declined to discuss the report’s findings, but said, “It is likely that the findings in the draft report you have will be significantly modified given additional discussions, explanations and information provided by AECOM.”
Los Angeles-based AECOM, a publicly traded company that acquired rival engineering and construction giant URS last year, did not respond to requests for comment over two days. Parsons Transportation, a subsidiary of Parsons Corporation of Pasadena, California referred questions to Broward’s aviation department.
Aviation Director Kent George declined to comment Tuesday, saying he had not read the auditor’s draft report.
Amid the behind-the-scenes controversy, Broward commissioners voted in April to give Parsons more work on its runway management contract and pay an additional $2.5 million. The hike brought the value of Parsons’ contract, set at $10.3 million in 2011, to $33.5 million.
The new $800 million, 8,000-foot south runway opened on schedule in September 2014, giving the airport two parallel commercial runways and the capacity to handle thousands more flights per year.
The audit reviewed the costs of “compacted embankment material” used to elevate the eastern end of the runway 52 feet to allow traffic on Federal Highway and railroad freight cars to pass underneath aircraft taking off or landing.
In April 2012, the county commission awarded a $226 million contract for site preparation and navigational aids infrastructure to a joint venture of Brazilian-owned Odebrecht Construction and Central Florida Equipment Rentals (OCJV). Site preparation included the placement of 8 million cubic yards of dirt and construction of a mechanically stabilized earth wall system.
Thirteen months later, the audit report says, commissioners approved “Change Order Number 7,” which decreased the contract amount by nearly $5 million and transferred a portion of the work to another contractor to keep the project on schedule.
The auditors wanted to know why the bid price for the fill material increased from an original price of $12 to $24.11 per cubic yard, “resulting in an additional cost to Broward County of $24.5 million.”
To understand, auditors interviewed county and company staff and reviewed bid documents, contracts, change order records, invoices and documentation supplied by AECOM and Parsons.
“We found that the unit price increase was primarily driven by the requirement to compensate OCJV for additional costs they incurred in obtaining material as a result of county requested changes,” says the report. The county officials who authorized those costly changes are not identified.
The report, however, goes on to point the finger at AECOM and Parsons for $1.5 million in added costs that it says were unnecessary.
“AECOM and Parsons did not prepare a required independent estimate in order to ascertain and adequately negotiate the material costs. Instead, AECOM and Parsons compiled documentation provided by OCJV.”
“The compilation not only did not constitute an independent estimate, but was overstated by $727,465 in miscalculated costs,” the report says. “Using the compilation as a basis for negotiation, AECOM and Parsons then negotiated a final cost that was approximately $790,600 in excess of their overstated estimate.”
The seven-page report went on to note that county auditors were troubled by “the inability of AECOM’s and Parsons’ staff” to explain the details of the change order when interviewed.