News Article - September 22 2006

Bid could cost firm its big contract at airport
  A large Houston airport-maintenance company is on track to lose more than $50 million worth of work at Philadelphia International Airport - work that it won five years ago with the help of the mayor's brother, T. Milton Street. The firm, Philadelphia Airport Services, yesterday submitted a bid $145,000 higher than the one from a Philadelphia rival, the Elliott-Lewis Corp. The bids, for maintenance work that includes cutting grass and fixing elevators, are for one of the city's largest contracts.

   Elliott-Lewis estimated it could do the work for $14 million a year, compared with PAS's $14.1 million. The contract's actual value is much higher because it may be renewed for as long as four years, through 2010. It could be weeks before the city announces whether Elliott-Lewis will prevail. Under procurement rules for this contract, the low bidder has seven days to submit a minority-business participation plan that the city will review. This is the third time the two firms have competed for the work.

   After holding the contract 11 years, Elliott-Lewis in 2001 lost it to PAS, which bid $2 million less. The deal lasted four years. Elliott-Lewis competed again when the contract came up for renewal last year. Its bid was $2.3 million less, but the Street administration took the unusual step of rejecting it, objecting to what it viewed as a piecemeal approach to meeting a 25 percent minority-participation goal. Specifically, Elliott-Lewis proposed hiring 22 minority subcontractors, most receiving less than 2 percent of the total work.

   The city has since enacted a wholesale change in its approach to minority contracting for airport work. Instead of meeting specific numeric goals, Elliott-Lewis must show "good-faith efforts" to hire businesses owned by women and minorities in 10 contract areas. "We are confident we have made a good-faith effort to meet all requirements contained within the bid," Elliott-Lewis executive Jim Gentile said yesterday. A third firm that used to partner with PAS, U.S. Facilities, had also been vying for the work but did not bid yesterday.

   Dropping out was a "business decision," president Jim Dobrowolski said. "We are swamped in addressing other opportunities." The airport contract has long stirred controversy, including the disclosure that a member of the original joint venture known as PAS had put the mayor's brother on its payroll as a $30,000-a-month consultant. PAS no longer has ties with Milton Street.

   Also, the renewal has gone forth in fits and starts, resulting in the extension of PAS's deal for a year, at a cost to the city of more than $1 million a month. To date, PAS has earned $74.1 million from the city. As recently as a few weeks ago, the new contract was set to begin Oct. 1. It has been pushed back to Jan. 1.

Source - Philadelphia Inquirer