Settlement Helps Put South Terminal On Target
Written by Charlotte Libov on July 27, 2006
By Charlotte Libov
Construction of Miami International Airport’s new South Terminal is on track and should hit its Feb. 9 completion target, thanks in part to a recent $56.4 million settlement between Parsons-Odebrecht J.V., the contractor, and the airport, says John Cosper, deputy director of the airport’s capital improvement project.
"There were a lot of open issues regarding changes in the work, delays and items that were added to the project, some which went back several years," he said. The cost of the settlement falls within the project’s $890 million budget, he said
"We’re still within the budget on this job. We had to use some contingency money set aside but still within it," he said. About half of the $56.4 million went for a lump-sum settlement and the remainder went for past-due direct payments, he said.
At a county commission Regional Transportation Committee meeting this month, commissioners complained about the way in which work had been paid for in the past, leading to the filing of claims against the county and the need for the settlement. But Mr. Cosper said the system had been changed and that would no longer occur.
"We had a number of issues stemming from the South Terminal that we were able to resolve with this one payment. It was crucial for us to be able to do this," he said in an interview.
From now on, all work on the project will be billed immediately so that payment can be made more promptly, he said. Before, payments were made under a "force of count directive," he said. That meant that if a change was needed the contractor was told to go ahead and do it, for a price to be agreed upon later.
"It was a great way to keep the project moving but a hardship on the contractor, so we’ve modified the procedures so payment can be made as work is done," he said.
Following the Regional Transportation Committee meeting, the full commission approved a $4.8 million final settlement with MCM Construction of Miami to settle work claims arising from the airport’s North Terminal reconstruction, which has a much rockier history than the South Terminal building.
"The more payments we can make on claims, the more interest we’ll have from contractors in doing our work," Mr. Cosper said. "We need to reestablish credibility on the North Terminal project."
Aviation officials were stunned in May when they opened bids for that work and discovered they had come in at $500 million, more than triple expectations. The officials are now working on redesigning the terminal and removing some of the more expensive design elements before putting the two contracts out to bid again.
The North Terminal is the costliest segment of the $5.2 billion airport upgrade. Officials have attributed that to the complexity of rebuilding an airport terminal while keeping it operational.