"Minorities Want Bigger Role at Dallas-Area International Airport"

Tuesday, October 1, 2002

Minorities Want Bigger Role at Dallas-Area International Airport
The Fort Worth Star-Telegram, Texas


With nearly all of the $2.6 billion airport expansion program assigned
to contracting companies, about 3 percent of the work has gone to
minority-owned general contractors. 

That has disappointed watchdog groups and minority companies. Some say a
handshake agreement with Dallas/Fort Worth Airport staff members led
minority contractors to believe that at least 10 percent of the work --
$250 million to $350 million -- would go to minority general contractors
who met the airport's requirements. 

"Certainly, we could have done better," D/FW Airport Board member Pedro
Aguirre said. 

But airport officials said that despite the low percentage of work
awarded to minority general contractors, minority subcontractors have
regularly been given work. They received 34 percent of the construction
work, far exceeding the airport's goal of 26 percent, officials said.
General contractors often divide project work among subcontractors. 

And Jeff Fegan, chief executive officer at D/FW, said he does not recall
a dollar amount being set for work by minority-owned general
contractors. Clay Paslay, executive vice president of airport
development, also said no such figure was promised. 

"Contracts are all set up to respond as projects become available. 

There's no guarantee they'll ever get a project," he said. 

"I think we're doing extraordinarily well in [that] arena," Fegan said.
"But it's always about finding better ways of getting people involved."

The minority contracting practices came under scrutiny because the
expansion is one of the state's largest construction jobs. In September
1998, the airport chose two large general contracting companies for the
expansion. Neither was minority-owned, so Dallas leaders and minority
advocates pushed for the inclusion of minority contractors. The airport,
using race-neutral criteria, selected three small general contractors,
all Hispanic. The five companies are part of the Airport Development
Team. 

The African-American general contractors who had applied for work were
deemed too large or were disqualified for other reasons. 

D/FW has handed out $2.4 billion in contracts, or 92 percent of the
expansion money. The two crown jewels of the expansion -- Terminal D and
the Skylink people-mover system -- went to Austin Commercial and Hensel
Phelps Construction, respectively. 

Of the three minority companies, Meridian got $27 million in contracts,
Phillips/May got $24.2 million and Azteca Enterprises got $27.4 million,
for a combined $78.6 million. 

After the Sept. 11 terrorist attacks, some smaller projects originally
intended for minority companies were cut or postponed. 

D/FW staff members point out that contracts worth about $200 million --
including $100 million in postponed projects -- remain in the capital
development program. Meridian, Phillips/May and Azteca are expected to
compete for an additional $61.4 million. 

On Thursday, the airport staff will recommend that the three companies'
contracts, which expire in October 2003, be extended by a year to
compensate for postponed work. 

"We want to rectify as best we can a situation that has been the result
of events of our time, and we're trying to do everything we can to meet
everyone's expectations," Fegan said. 

The effectiveness of D/FW's minority contracting has been an issue since
1993, when legislators stepped in as the airport sought to expand its
airfield. The airport's contracting and hiring practices were criticized
by state Sen. Royce West, D-Dallas, during committee hearings on whether
to allow the airport to build runways in Euless, Grapevine and Irving. 

In January 1994, a consultant concluded that the airport had
historically underused minority- and woman-owned businesses. That May,
an audit by the U.S. Department of Transportation inspector general
showed that contracts designated for such businesses were going to
companies improperly certified as minority- or woman-owned. 

A month later, D/FW, Fort Worth and the Fort Worth Transportation
Authority held public hearings to discuss steps for awarding more
contracts to companies owned by minorities or women. 

The issue resurfaced last year when a study by Florida-based MGT of
America reported that Minority/Woman-owned Business Enterprise, or
M/WBE, companies received less than their share of contracts at the
airport. 

African-American companies were underused in all seven contractor and
subcontractor categories studied. Hispanic and woman-owned companies
were underused in all but one category. 

But the study, which examined contracting at the airport from 1993 to
1999, indicated that the airport's M/WBE program helped to counter
perceived discrimination. 

In December 2001, members of the Hispanic Contractors Association of
Dallas told the airport board that M/WBE companies had received only a
small portion of the $250 million to $350 million in work promised to
them. Art Robles, the association's top official, called for a "fair
playing field."

Last month, the airport board was briefed on the number of contracts
awarded to minorities. The briefing came at Aguirre's request after he
questioned which company would renovate the old people-mover stations. 

"We're getting toward the end of our commitment, and we're going to wind
up overlooking some folks we shouldn't have," Aguirre told the airport
operations committee. "We keep chipping away until there's nothing
left."

Billy R. Allen, the president of a minority search company and one of
the more vocal critics of D/FW's contracting, said he is disappointed
but not surprised by the lack of a black general contractor and by the
amount of work given to the three minority companies. 

"This whole effort requires board commitment," he said. "In the absence
of that, it's not going to succeed. It requires watchfulness on the part
of the minority community. You would think after all these years it
would be management's role, but management probably seeks the path of
least resistance. There are a lot of hurdles."

African-American companies will probably participate in the next phase
of airport construction. The airport staff is recommending that the
board contract with DFWIA Integrated Partners, a joint venture by Centex
Construction; H.J. Russell; Williams-Russell and Johnson; Aster LP; and
Pegasus. Centex is not minority-owned, but Aster is Hispanic-owned and
the three others are owned by African-Americans. 

The move is intended to make sure that Centex doesn't overshadow the
smaller companies. 

"Yes, we were mindful of the ideal of having smaller M/WBE firms team up
with a large firm to help grow the companies together," said Paslay, the
executive vice president of airport development. "We want them all to be
able to grow larger together."

D/FW officials plan to make the switch as part of the scheduled
replacement of Austin Commercial and Hensel Phelps as the primary
contractors on the Airport Development Team. 

Work that started under Austin Commercial and Hensel Phelps, such as
Terminal D and the people-mover system, will stay under them. 

Airport staff members looked at seven or eight teams before recommending
DFWIA Integrated Partners, Fegan said. 

Board members, who are to vote Thursday on the selection, said that they
see only the final selection and that no information about the other
teams was forwarded to them. 

The amount of work available to the new team is not yet known, officials
say, but it is likely to be less than the airport expansion. On the
other hand, if the aviation industry rebounds, work could include major
road construction or a sixth terminal. 

Some projects, such as an eighth runway on the Grapevine side of the
airport, will begin only when air traffic increases. 

Airport officials want to have 950,000 takeoffs and landings annually
before moving forward with the eighth runway. After reaching 837,779 in
2000, the number dipped to 783,546 in 2001 and may decline again this
year.


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