Dive Brief:

• The New Orleans Aviation Board has approved the final construction costs for a new $807 million terminal at Louis Armstrong International Airport, and construction will begin January 4, The Times-Picayune reported. The city has hired construction manager Hunt-Gibbs-Boh-Metro under a $598 million contract. The project is financed by a mix of general airport revenue bonds, federal and state grants and capital funds.
• Hunt-Gibbs-Boh-Metro is a joint venture of Hunt Construction Group, Gibbs Construction, Boh Bros. Construction Co. and Metro Service Group. The JV's contract is for construction of the 760,500-sf terminal, less items like design and engineering, a new airport access road and a storm water pump station, reported The Times-Picayune. The scheduled completion date is October 1, 2018.
• City and airport officials say the ultimate goal is to replace the existing, aging terminal, which was built in 1959, with a modern, updated one to better meet passenger expectations, reported The Times-Picayune. Two concourses, with a total of 30 gates will be located behind a single checkpoint, and most retail and restaurants will be located behind security.

Dive Insight:

Mayor Mitch Landrieu, The Times-Picayune reported, has been pushing for a new terminal to be up and running in time for New Orleans’ tricentennial festivities.

"This airport has been in the mind's eye of the public for about 40 years," Landrieu told the Aviation Board. "There have been innumerable mayors' administrations, governors, that have tried to find the time, the space or the money to build a world-class airport that the people of New Orleans deserve. This team of people that are sitting here today and many people throughout the city found a way very early on in our administration to make this dream a reality."

The Hunt JV was selected in August 2014 as the "construction manager at-risk," a contract type that identifies a guaranteed maximum price beyond which the contractor must cover all additional costs. Officials told The Times-Picayune that all parties spent months hammering out the details in determining the final maximum price; however, the contract still provides an $18 million contingency for unanticipated costs. Any change orders would have to be approved.

This is similar to the contract process that got the Boston Green line extension project into such hot water with taxpayers and resulted in all the lead consultants and contractors getting the boot.  

Hunt says it has committed to 33% disadvantaged business enterprise participation on the terminal project and says it has already reached 28.4% in awarded DBE contracts.

"Our commitment to DBE is second to none," Hunt representative Ken Johnson told the board. "We will commit to inclusion both in the workforce and at the contractor level. We still have a lot more bidding to do."

However, some local DBE firms say that many smaller businesses have been excluded from participating in the project because the JV has split up the work into too-large pieces, too much for many local businesses to handle.

General contractor Ernest Stalberte told the board, "We became discouraged. We became disenfranchised."

Aviation Board member Doug Thornton said the original estimate for the project was $546.5 million, but the JV came back with a much higher price.  Thornton told The Times-Picayune that the team negotiated and implemented design changes to bring the total to $598 million.

Aviation Director Iftikhar Ahmad said the airport can build the new terminal, keep costs to airlines low, and continue passenger growth. "I think today we did something that is really going to benefit our coming generations.