Los Angeles City Comptroller Criticizes Bidding Process in $ 593 Million Airport Contracts

Although city policy calls for three bidders per competitive contract, the Los Angeles Airport Department has awarded companies hundreds of millions of dollars of work on the basis of one or two bids, new audit finds published Monday.

City Comptroller’s Office report calls into question the effectiveness of tendering practices at Los Angeles World Airports, operator of Los Angeles International Airport, calls for overhaul of procurement procedures of the agency.

“LAWA needs to review and reform its tendering processes,” Comptroller Ron Galperin said. “Otherwise, we have no way of knowing if we are getting the best value for money, which the tendering process was created to ensure. “

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The auditors did not conclude that the lack of bids was evidence of a rigged procurement process, but said the findings merited much closer examination.

The review, conducted by KH Consulting Group for the controller, found that in fiscal year 2014-2015, the airport department awarded $ 593 million in contracts for goods and services.

About 28% of tenders received only two bids and 30% had only one. The audit found that the contracts were worth approximately $ 356 million.

Construction contracts awarded in the multi-billion dollar modernization of LAX, the nation’s third busiest airport, have not been reviewed.

The report noted that in some cases the airport department was limited in its ability to obtain at least three bids per contract because the Federal Aviation Administration only approves a single supplier for airport services or aeronautical products. specific.

Nonetheless, auditors said there was room for improvement. They recommended that Los Angeles World Airports ensure that contract specifications can be tendered, that there are enough qualified companies to bid on the contracts, and that bids received are accountable and in accordance with the contract requirements.

Galperin said on Monday his office would review procurement and tendering procedures in other departments in the city.

“When we saw these numbers, we thought it was something we should look at across the board,” Galperin said. “The city’s procurement processes could be unnecessarily complicated. Some people whose businesses have done business with the city say they don’t want to start over.

Airport officials declined to comment in detail on the audit.

In a prepared statement, Deborah Flint, executive director of Los Angeles World Airports, said the review findings provide “a blueprint” to help move the agency forward. Some of the recommendations, she added, have already been implemented.

At an event last month, airport officials met with nearly 900 representatives of local, national and international businesses and discussed future projects to improve ground transportation at LAX.

Potential business opportunities and procurement procedures were discussed. Airport officials said they hope the event will help attract a significant number of bidders.

In addition to the bidding issues, the controller concluded that the airport service was not prepared to deal with the increase in congestion during the ongoing modernization of LAX.

The researchers noted that LAX handled a record 74.9 million passengers in 2015 and that an average of 75,690 vehicles per day entered the central terminal area, causing traffic jams in and around the airport during peak hours.

To cope with the growth, the airport is planning $ 5 billion in plans to improve ground transportation, including an automated shuttle service to the terminal and a consolidated car rental center.

Pavement upgrades and an intermodal transportation hub that will connect to Metro’s passenger shuttle and Crenshaw light rail line, currently under construction, are also proposed.

The audit warned, however, that these large projects will significantly increase traffic and reduce parking in the terminal area during construction. The researchers concluded that the airport department had not properly assessed the effects or how to mitigate them.

During the modernization, airport motorists are likely to experience delays as parking structures are closed, taxiways are closed, and cars compete with construction vehicles for space.

Auditors said the department was not ready to deal with these issues and that no unit or official was responsible for coordinating the systems needed to keep traffic flowing.

The controller also concluded that LAX does not have enough staff to deal with the increase in congestion, lacks resources dedicated to traffic engineering and could experience outages in key services, such as assistance to traffic. People with Disabilities.

“The traffic is going to get worse before it gets better,” said Galperin. “And any goodwill we have generated with passengers will quickly disappear if Los Angeles World Airports does not adequately address the traffic and parking issues.”

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