Cost of O’Hare, Midway asphalt deal soars as City Hall keeps extending contract
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In 2012, the Emanuel administration awarded a contract to K-Five Construction Corp., the low bidder to do asphalt work at O’Hare and Midway airports that was supposed to cover three years and cost no more than $16.7 million.
Nearly six years later, K-Five is still on the job. Mayor Rahm Emanuel’s administration has extended the contract five times and tacked on additional duties eight times — each time without requiring new competitive bidding to see whether someone else might do the same work at a lower cost.
So far, the additional cost to the city agency is roughly $20 million.
The Chicago Sun-Times reported last month that the city awarded contracts to Northlake’s Rossi Contractors, Inc. in 2012 and 2013 for concrete work at the airports that soared $30 million above the original price tag because of no-bid extensions and “modifications” by city officials.
Rossi’s operator, Ronald Rossi, was a friend and former business partner of Chris Kelly, imprisoned former Gov. Rod Blagojevich’s top adviser and chief political fundraiser, whose roofing company was a major O’Hare contractor under Emanuel’s predecessor, Mayor Richard M. Daley. Kelly killed himself before he was due to report to prison for a corruption conviction.
As it did regarding Rossi, the city’s Department of Aviation says giving the additional work to K-Five was necessary to maintain “continuity” and safety at the airports while new bid solicitations were prepared.
K-Five, based in Westmont, is operated by the Krug family, longtime political contributors and fundraisers who formerly had an ownership stake in a Joliet casino. K-Five also has been a client of Ald. Ed Burke’s law firm, which specializes in property-tax appeals.
K-Five executives won’t comment. Emanuel’s aviation commissioner Ginger Evans won’t, either.
In a written statement, Evans’ spokeswoman Lauren Huffman says: “Contract modifications are sometimes necessary when you are dealing with high-demand, highly specialized services — and especially when timing of the work is imperative to maintaining continuity and safety of our daily operations, as well as compliance” with federal regulations.
“In this case . . . the modifications were required to maintain a large volume, more than 12 square miles, of heavily traveled pavement at both airports.”
Emanuel has gotten campaign contributions from the Illinois Road and Transportation Builders Association, a construction trade group whose political action committee gave his campaign $50,000 in 2013 and $50,000 in 2015, records show.
One Krug family member has chaired the PAC, which K-Five and its competitors help fund. Another relative is on the board of the association, whose lobbyists until recently included Jim McPike, a former Democratic legislator with close ties to Illinois House Speaker Mike Madigan.
The company has been paid more than $260 million in recent years for work on Illinois Department of Transportation and Illinois State Toll Highway Authority projects, records show.
Emanuel followed Daley’s lead in promising not to accept campaign cash from city contractors as mayor. But that pledge didn’t include contributions that come via an industry PAC.
“There is not a single donation from the company or its staff to the mayor’s campaign,” Emanuel spokesman Adam Collins says of K-Five. “Not one. Are they part of the Road Builders Association? Yes, but I don’t see the point. The bottom line is that when the mayor took office in 2011, the first thing he did was put in place a sweeping set of new ethics rules that go above and beyond what was required under the law. He not only set the higher standards, he has followed them to a T and will continue to do so.”
Payments to K-Five under the contract so far total $36.4 million, records show. The deal covers “asphalt repairs, including mill and overlay work, for runways, taxiways, aprons, ramps, roadways and other locations” at O’Hare and Midway.
K-Five was the lowest of three companies who put in bids for the work in 2012. Its proposal was $5.2 million lower than the next bid and $12.1 million less than the other.
City officials said they hope to solicit new bids for that work this spring or summer, this time breaking it into three contracts to create more “opportunities for companies of all sizes and specialties.”
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