Another O’Hare deal sees costs soar thanks to City Hall’s no-bid add-ons
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In late 2011, Mayor Rahm Emanuel’s administration gave a no-bid, five-year deal for $115 million to a politically connected partnership to operate and maintain O’Hare Airport’s in-house transit system — the People Mover.
Nearly seven years later, that partnership, called AOR Transit Joint Venture, is still on the job. That’s after being handed more duties, without competitive bidding, that have helped bring it an extra $58 million, records show.
Emanuel has pledged to open up government contracting opportunities. But his administration repeatedly has extended existing contracts, without seeking competing offers, on big public works jobs at O’Hare and at Midway Airport. The People Mover job is another example of that.
The Chicago Sun-Times previously has reported that:
• Northlake’s Rossi Contractors, Inc. was awarded two contracts for pavement, maintenance and other work at O’Hare and Midway in deals that were supposed to total $37.5 million. That’s risen by $30 million because of no-bid extensions and modifications.
• Westmont’s K-Five Construction Corp. got a three-year, $16.7 million contract for asphalt work at O’Hare and Midway in a deal whose price tag has gone up another $20 million because of no-bid add-ons.
AOR initially got its contract through a “request for qualifications.” That involves companies making a pitch, submitting information in which they argue why they’re best qualified to perform work. Officials select a company and then negotiate price.
This process isn’t “uncommon for procurements where the professional skill of the contractor is an extremely important factor,” city aviation spokeswoman Lauren Huffman says.
AOR’s was one of two responses to the city’s solicitation. Its five-year deal started Jan. 1, 2012, with what was to be a cap of $115 million.
AOR since has been given three no-bid work add-ons that so far have helped boost its payments to $173.2 million, city records show. And it will continue to operate the People Mover for the foreseeable future.
The People Mover is undergoing reconstruction — part of a broader project Emanuel announced in 2013 that aims “to create a central access point for all rental cars, public parking shuttles and public transit” at O’Hare.
With 30,000 riders a day, the People Mover is being extended by 2,000 feet and getting “larger and more modern cars,” as well as “a new control system and transit technology,” Huffman says.
Parsons Construction Group Inc., whose operations are centered in Colorado, was the only company to submit a proposal covering both “design and build” work on the People Mover and the “operations and maintenance” being handled by AOR.
Parsons’ proposal included AOR and an affiliate of Canada train maker Bombardier Inc. as subcontractors.
City officials reached agreement with Parsons for “design and build” for what was supposed to be no more than $310 million, but payments for that already have topped that by about $5 million, records show.
City officials say they couldn’t reach an agreement on the operations and maintenance portion with Parsons, so they kept AOR under its existing deal.
AOR was formed in the 1990s and, under prior deals, has overseen the People Mover since 1994, soon after the system was built. In the decade before the Emanuel administration gave AOR a new contract, the venture was paid more than $164 million.
The AOR joint venture includes:
• Plainfield-based Harbour Contractors, Inc., whose president is Patrick Harbour and which also has been part of the O’Hare runway expansion project.
• R.M. Chin & Associates, Inc., a Chicago firm whose president is Raymond Chin.
• Chicago’s Riteway Huggins Construction Services, Inc., run by Larry Huggins.
The leaders of all three had political ties to Emanuel’s predecessor, former Mayor Richard M. Daley, whose administration gave AOR its initial deal and who had taken campaign contributions from them or their businesses before issuing a 2005 executive order that barred city contractors from contributing to mayoral campaigns.
Emanuel also pledged not to accept campaign money from businesses that work for the city, though his campaign got $1,500 from Harbour two months before Emanuel was first elected mayor in 2011. Harbour also gave $1,000 to Emanuel’s main rival in that race, Gery Chico.
Harbour still gives to other politicians, including Emanuel’s City Council floor leader, Ald. Patrick O’Connor, who has gotten five contributions from him totaling $6,500 since 2014.
Huggins formerly was on Metra’s board as a Daley appointee.
The People Mover has been facing “interim closures” during construction, and city officials say they “expect to make significant progress on the modernization this summer and to reach substantial completion by September 2019.”
But officials say City Hall doesn’t expect to solicit new proposals until 2019, aiming for any new deal to begin after AOR’s arrangement expires in December 2020.