For the second time this year, the Los Angeles Airport Commission has decided to award a multimillion-dollar parking management contract to a company that was not the first choice of an advisory panel. And, as was the case the first time the prized contract was up for grabs, the commission's decision is raising accusations that it was based on politics, not sound public policy.
At stake is a three-year agreement to operate parking lots at the city's three major airports, Los Angeles International, Van Nuys and Ontario. Collectively, they represent the largest public parking enterprise in the country, with about $52 million in annual receipts.
Early this year the commission was ready to award the contract to AMPCO Parking, a company whose partners then included a longtime ally of former Mayor Tom Bradley. The contract was never awarded, however, because of questions about the company's assertions that it had active partners who were members of a minority group. Also blocking approval was the fact that AMPCO's bid was $2.4 million higher than that of a company recommended by the advisory panel.
Another round of competition for the contract began. Meanwhile, Richard Riordan was elected mayor and named his own appointees to replace Bradley's on the five-member Airport Commission. To the surprise of many political observers, the commission last week again voted to give the contract to AMPCO--even though the advisory panel, consisting of five outside experts, recommended another company. This time, AMPCO's partners included a company that Deputy Mayor Al Villalobos had taken credit for helping to launch.
Airport Commission President Ted Stein defended the Nov. 16 selection of AMPCO on the grounds that the company offered the lowest overall price for managing the parking lots. He, like other officials involved in the contract's award, denies that it was driven by politics.
"We did what we said we would do from the beginning and that is run the airport in the best entrepreneurial way possible," Stein said. "I felt the process was fair."
Still, the selection of AMPCO has again led other city officials and representatives of competing companies to complain about how the commission awards contracts.
"It . . . irritates me that we spend so much time (reviewing contracts) and the commission tosses recommendations aside," said one airport official, who spoke on condition of anonymity.
Five Star Parking, which currently manages the parking lots, and was recommended by the advisory panel for the contract after the second round of bidding, has threatened to sue over the commission's decision.
"We believe the commission breached its legal responsibility by misleading potential proposers," said Five Star's general manager, Joe Lumer. "You cannot advertise for proposals to provide a quality service and then turn around, change the entire basis for the process, and say that nothing really counts except the cheapest dollar amount."
Many observers assumed that the commission this time would follow the recommendation of its advisory panel, which said Five Star's proposal was the strongest of four submitted for the contract. Four of the five panel members recommended Five Star.
However, Airport Commission members voted 4 to 1 for AMPCO, arguing that the company should be selected because it offered the lowest total price for the contract.
A detailed review of the four proposals showed that AMPCO's total cost for the contract was $11,930,274 a year, or $84,364 less than the amount Five Star proposed to charge the city to manage the parking operations.
But as both the advisory panel and Five Star's attorneys noted, the competition for the contract was not to be based solely on cost. Rather, under the generally accepted guidelines for many government contracts, other factors were to be considered, such as a company's experience, financial stability and commitment to doing business with subcontracting companies owned by minorities and women.
In this case, the advisory panel had a specific list of one dozen factors--including price--that were to be analyzed.
Five Star's proposal was identical in price to one it submitted in January in the first round of bidding, while AMPCO dropped its total contract price by almost $1 million.
"Had Five Star known that the sole basis for selection would be price, it would have made a substantially different proposal," attorney Richard Robins wrote in a letter Monday that warned of a lawsuit.
The criticism was dismissed by AMPCO's executive vice president, Dennis Nasabal, as "sour grapes."
Nasabal said his company's price for managing the contracts was significantly lower this time around because it eliminated some extra services that previously were not deemed important by airport advisers. In addition, Nasabal said, AMPCO this time improved its bidding position by joining forces with a more experienced minority-owned company, Parking Co. of America. The Downey-based firm will be AMPCO's prime subcontractor with responsibility for parking services at Ontario and Van Nuys airports.
Deputy Mayor Villalobos had previously told The Times that years ago, as a business consultant, he helped get Parking Co. of America off the ground. But company President Alex Chaves said Tuesday that Villalobos had no hand in the company's launching 30 years ago in Albuquerque, N.M. Villalobos declined to comment Tuesday, and airport officials and AMPCO's Nasabal insisted that they had never known of any possible connection between Parking Co. of America and the deputy mayor.
But AMPCO's competitors found it difficult Tuesday to believe that the company's selection in both rounds of bidding was simply a matter of good fortune.
"I think it was a sham I didn't get it the last time and I think the idea of going back out to bid was grossly unfair," said Gil Barnett, president of Parking Concepts Inc., which was the company recommended for the parking contract by the commission's advisory panel on the first round of bidding
Five Star's Lumer added: "If the commission is serious about running the airport parking operation for the lowest possible cost, then they should change the process."