County Hastens Pay Tells Contractor To Pick Up Airport Pace
Written by Dan Dolan on February 15, 2007
By Dan Dolan
County aviation officials cranked open the money spigot at Miami International Airport’s $1 billion South Terminal last week, using faster payments to pressure contractors into kick-starting construction on the long-delayed project.
Now that money’s moving, assistant aviation director Max Fajardo said the county intends to hold project general contractor Parsons-Odebrecht Joint Venture’s feet to the fire and demand more manpower on the job site. The goal, he said, is to complete the project this summer.
If the deadline isn’t met, Parsons-Odebrecht will face $8 million in liquidated damages, said Mr. Fajardo, assigned to ramrod the South Terminal project, considered the key to finishing the $2.6 billion North Terminal that is years behind schedule.
"There haven’t been enough people on the site," said Mr. Fajardo, who said he spent two weeks sorting out contractors’ complaints and streamlining the invoice system. "Contractors told me they’d put more people on site if payments were made faster. We’re doing that."
Construction companies’ complaints about payment paperwork weren’t entirely unjustified, Mr. Fajardo said. It could take 90 days or more for invoices to grind through the county’s bureaucracy because more than 10 officials would have to sign off on the same item, he said. Invoices totaling millions of dollars would be stalled due to a dispute over a relatively small amount of money, he said.
Now, undisputed items will be processed and paid within 19 days of receipt of a bill, Mr. Fajardo said. Under a new review system, disputes will be resolved in another seven days, he said. Payment will be made 11 days after settlement, he said.
"We’re delighted the county is cutting through the bureaucracy and getting us the money to pay our subs," said Gilberto Neves, CEO of Odebrecht Construction, the Miami-based arm of the Brazilian building giant. "This will bring new energy to the project."
South Terminal subcontractors have complained that the county’s slow-pay policy created cash-flow problems that got in the way of project completion. Odebrecht executive David Peebles said his company has paid subcontractors out of its own coffers to keep the job running. He said his firm dished out $6 million last month even though the county hadn’t paid for the work. But the new process should eliminate this fiscal headache, he said.
But the manpower issue will continue to be a bone of contention, county and construction executives say. The county contends 1,500 tradesmen must be working on the South Terminal every day for it to open on time. But they say contractors have had an average of only 600 workers on the job.
"I don’t know if we need 1,500 men out there," Mr. Neves said. "That’s a judgment call. Clearly, the subs have been saying they have enough men on the job. This project is going to open this summer as planned."
But Mr. Fajardo said he will not leave that to chance. To make sure there’s enough manpower, every worker will be required to get a ticket — similar to the chit system at a deli counter — when they report to work. If contractors balk at the new system, Mr. Fajardo said, he’ll use his power of the purse to get his way.
"I need a positive daily head count," he said. "Payment requisitions must have certified time records. I’m tired of hearing about this dispute. We have to make sure this gets done on time and on budget."
Mr. Fajardo is backing up his tough talk with tough actions. He said he recently fined Parsons-Odebrecht $150,000 for missing September project deadlines.
Deputy aviation director John Cosper said missed construction deadlines have compounded payment problems. He said the county will not pay for work that’s not done.
"The contractors are behind schedule and haven’t taken advantage of our authorization of overtime to speed things along," Mr. Cosper said. "But there’s new management on the project, new ideas and a new focus. I’m confident we’ll see a big improvement."
So is Mr. Neves, who called Mr. Fajardo’s appointment as South Terminal czar a major step in improving the county’s relations with the construction companies.
"We’ve already seen positive results," Mr. Neves said. "Everyone is bringing more energy to the project."