"Scrambling to land big O'Hare contract"

Monday, July 21, 2003

Scrambling to land big O'Hare contract
by Greg Hinz
Crain's Chicago (IL) Business


Five teams of top construction managers — all with strong political ties to
the Daley administration — are battling it out for a lucrative pact to
oversee the pending $6.6-billion expansion of O'Hare International Airport.

Competitors in a contest of expertise and clout range from prominent local
firms such as Globetrotters Engineering Corp. to international giants like
San Francisco's Bechtel Infrastructure Corp. and New York-based Bovis Lend
Lease Inc.

The winner will face the task of ensuring that a project widely viewed as
crucial to the city's economic future remains on track. The victor will be
well-paid for its efforts, collecting an anticipated $60 million in fees
over the next 15 years or so, industry sources report.

City officials say they are carefully weighing the professional
qualifications of the competitors and will select one team based on its
abilities, not its connections.

"It's very common for firms to align themselves with what they perceive to
be powerful and influential representation," said city Department of
Procurement Services spokeswoman. "But in the end, the (review) committee
will select the vendor whose proposal is most advantageous to the city and
the citizens of Chicago."

Nonetheless, some of the city's top political talent is involved, at least
indirectly. And a final decision is certain to be run by Mayor Richard
Daley.

In the running

At issue is who will provide program management services for the expansion,
which received a huge boost this spring when airlines agreed to a plan to
fund the first $2.9 billion in new runways and other work (Crain's, July 7).

The winning team will be involved in project construction, design,
out-sourcing and cost-control management over an initial five-year period,
with options to renew, according to city bid documents. The five teams that
responded are:

• Airport Development Managers of Chicago, a consortium headed by
California-based Parsons Transportation Group and Chicago's Globetrotters.
Media consultant Marilyn Katz is the group's registered lobbyist. Another
City Hall figure, former mayoral chief of staff Gery Chico, says he is not
lobbying for Parsons on this contract but does not dispute that Chicago law
firm Altheimer & Gray, where he is a partner, has represented the company on
non-lobbying matters.

Subcontractors in the consortium include minority-owned firms in which
Cherryl Thomas and Benjamin Reyes, who formerly headed the Chicago
Department of Buildings and Chicago Public Building Commission, are
principals.

   • Bovis Lend Lease Inc. and partners. Bovis is represented by Sean
Heffernan, who, until he joined the law firm Holland & Knight, was the
city's chief Springfield lobbyist.

   • San Francisco-based URS Corp., in a joint venture co-headed by
Dallas-based Turner Construction Co. URS is represented by Stephen
Schlickman, who ran the mayor's Central Area Circulator project in the early
1990s. Lobbyist William Filan works for another division of URS, but says he
has not been involved in the O'Hare bid.

Turner's registered lobbyist is Alfred Ronan, a longtime ally of Alderman
Richard Mell (33rd) and Gov. Rod Blagojevich, Mr. Mell's son-in-law.

   • Chicago Aviation Partners, a consortium headed by Florida-based DMJM
Aviation Inc. and Chicago's McClier Corp. McClier's registered lobbyist is
Chicago-based law firm Mayer Brown Rowe & Maw, where former mayoral chief of
staff Roger Kiley is a partner.

   • Bechtel and partners, whose bid has drawn the most attention because
Bechtel's lobbyist has been Victor Reyes, an attorney at Greenberg Traurig
(and no relation to Benjamin Reyes), who for several years served as Mr.
Daley's intergovernmental relations chief and still heads a major Hispanic
political group that helps the mayor.

Two years ago, with Victor Reyes' aid, a Bechtel-headed group won what is
believed to be the biggest contract in the city's history, a $1-billion-plus
design-build pact for a new terminal at O'Hare. Those plans later fell apart
amid aviation industry turbulence.

This time, Mr. Reyes says he is "not involved" in the Bechtel bid. "I do
work for them, (but) on other matters," he says.

A former aide to Mr. Reyes, Rosie Andolino, recently was named by the mayor
to head the O'Hare expansion project. She said Mr. Reyes is not involved and
the review committee will make the decision, but she would not disclose
whether she serves on the panel.

Controversial contender

Bechtel competitors are attacking the company on other grounds, pointing to
hundreds of millions of dollars in cost overruns on a Bechtel-led expressway
and tunnel project in Boston known as the "Big Dig," and charges of
excessive fees in expansion of Miami International Airport, a project in
which DMJM also participated.

A Bechtel spokesman replies that all the Boston expenditures were mandated
by local officials and that the Florida spending was found by independent
auditors to be "comparable to other airports."

The city is not saying when it will select a winner for the O'Hare project,
but does indicate that the list will be narrowed to two or three finalists.

Nor will the city offer a cost estimate. However, industry sources say fees
could run to $4 million a year, with work extending for more than a decade.

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