News Article - August 16 2006

City soon to offer airport contract
  After almost a year of delay, the administration in three weeks is expected to name the recipient of one of the city's biggest municipal contracts - a $50 million job to fix escalators and baggage conveyor belts, and perform other large-scale maintenance work at Philadelphia International Airport. Three firms are competing for the work, which would likely last throughout 2009. This will be the third rematch for two of the firms, Philadelphia Airport Services, which has held the contract since 2001, and Elliott-Lewis Corp., which performed the work for the 11 years prior.

   A third company, U.S. Facilities, used to partner with Philadelphia Airport Services but is now going after the job solo. This airport deal is being closely watched because of political entanglements that surround it. Philadelphia Airport Services, for instance, used to have ties to Mayor Street's older brother, who worked as a $30,000-a-month consultant. U.S. Facilities has been a steady financial supporter of Street, donating $70,000 since his mayoral election in 1999, while Elliott-Lewis says it fell out of favor with the mayor and hasn't contributed a dime to him in six years.

   The contract has also drawn scrutiny because of the city's past problems with making sure companies owned by minorities and women received a portion of the millions in contracting dollars they were promised. The Inquirer in June reported that minority participation in the current airport contract fell far short of the city's goal of 35 percent. Yesterday, representatives of the three firms, along with several subcontractors, attended a meeting to gather contract details, including some pertaining to minority-participation matters.

   Instead of meeting specific numeric goals, as the city typically requests, the three firms in this case must show "good-faith efforts" to hire businesses owned by women and minorities in 10 specific areas of the contract. "Things here will be a little bit different than they were in the past... . This could be a model for the future," said Carolyn Nichols, who leads the city agency charged with overseeing minority-participation matters. The name of the lowest bidder will be announced Sept. 6. However, that firm will not actually be awarded the $50 million contract until the city subsequently reviews its minority-contracting plan. If the plan is not approved, the next lowest bidder would be chosen.

   The city has long struggled with how to steer dollars to minority businesses. The administration last year threw out a bid by Elliott-Lewis - which was $2.3 million lower than that of rival Philadelphia Airport Services - because it rejected what it viewed as the firm's piecemeal approach to meeting a 25 percent minority goal. Specifically, Elliott-Lewis proposed hiring 22 minority subcontractors, with most of them receiving less than 2 percent of the total work. As a result, the current bid process was delayed a year as the city tried to settle on a new approach for minority participation.

   In the interim, activity at Philadelphia's airport has continued to surge. It is now the ninth busiest in the world in terms of overall operations, and more than 31 million people pass through it each year - making the holder of the contract ever more crucial to the airport's reputation and ability to function. "At the end of the day, we felt we can legitimately compete, and that's why we chose to do it on our own," said Jim Dobrowolski, president of U.S. Facilities, which sold its 30 percent equity interest in Philadelphia Airport Services in 2002. A minority-owned firm, U.S. Facilities had also partnered with Philadelphia Airport Services, of Houston, last year in responding to the bid that was later tossed.

   U.S. Facilities is a subsidiary of PRWT Services Inc., which is owned by businessman and Street ally Willie Johnson. Both U.S. Facilities and Elliott-Lewis are based in Philadelphia. The pending award of the airport contract also comes amid turnover in the city's Procurement Department, with the former commissioner, William Gamble, resigning unexpectedly two weeks ago. Last week, Street appointed Janet Hagan, a 25-year city employee, as acting commissioner.

Source - Philadelphia Inquirer